The market has become incredibly dynamic over the years. Nowadays, it may no longer be sufficient to go with an individual strategy to succeed in the financial market. This is where team trading comes into the picture, as it will help efficiently build several strategies that can yield results in a dynamic market.
Trading Team Competence
A trading team is usually comprised of a senior trader who oversees the actions of several junior traders. There will also be traders working as junior traders for several years and are now looking to step up the ladder. This dynamic team would end up splitting the roles so that no one person has to handle all the ins and outs of the financial markets.
For example, one junior trader might be responsible for filters, and the other junior trader might be responsible for models. At the end of the day, the junior trader’s different aids and strategies are used by the senior trader to succeed in the financial markets.
The role of the senior trader is to act as a mentor to the junior trader. This way, everyone gets to benefit.
The Need for a Team Trading
It is widespread for institutional desks and hedge funds to go with the philosophy of team trading, but it is yet to infiltrate into the prop firms. The process of assembling a great team can go a long way towards achieving success. Yet, this is easier said than done since it involves a lot of intricate processes.
The trading group will have to possess qualities like innovative strategies, excellent talent, outstanding effort, and plenty of confidence. To assemble such a team, the firm has to make sure that they create a list of questions that can segregate the best from the worst in the interview process.
Even starting to identify a great trader, one can visit a platform such as SignalHire for a list of interview questions. Contacts of traders may be available there. A free trial can be used to access social networks where a ton of profiles are available, such a feature is handy. One can even use the browser extension. It will facilitate access to a plethora of profiles, and one can then select talent and progress to the interview process.
Recruiting an Excellent Team
Once the trading desk has been set up at an office, it is imperative to bring in new talent in the form of traders who can make the business viable with their fresh set of strategies and ideas. The interview will provide answers to the mind of a potential employee in areas like motivation levels, skill set, and interest in the trading business.
All these parameters are critical, but none more so than the ability to work as a group. This quality will help make better trading decisions, as such individuals should be able to collaborate in a much better way with the rest of the group. Since the business can be extremely stressful and requires many complex calculations, one should also be extremely quick in making the decisions and calculations.
Once the group has been recruited, a decent amount of time must be spent in training the new recruits. It can be a twofold process, as one should begin with instilling the group ethos while also training them on the trading process. The second part can take a while longer than expected, but one can be sure that they will catch up as long as the interview process was used to hire the exceptional candidates.
There are some key elements to building a group with a lot of success potential. The top tips would be:
One should learn to accept that junior professionals will be making mistakes in the early part of their trading careers. A senior professional should have the mentality to accept those mistakes, although they may not have to explain the same. One should also not expect the juniors to convey all the trading decisions in real-time. Even if it involves a lot of money, there should be enough acceptance and room for mistakes. This will result in the team growing in a healthy and phased manner.
This is where everything that is being taught comes to play. Since many emotions come into play in this career, it is important to make sure that the juniors are shown some amount of care to align them into the team’s ethos and ethics. Some actions like being able to discuss their behavior or actions behind closed doors can have a sizable impact in fostering positive emotions. There is little need for anyone to listen to others who do not seem to care.
Another way of showing a caring attitude towards the new guy would be to be available for a chat or conversation through various means throughout office hours. They should be able to check in with any queries or issues through email, chat, or any other means. The care shown to a youngster, especially when going through a drawdown, can reap immense rewards in their longevity within the team.
Irrespective of anyone’s talents, they should learn to admire the actions of a colleague if they happen to be really good. This is often overlooked by the seniors, who may tend to make a mistake in this regard. If that is the case, building a team ethos and ethics can turn out to be quite tough. Each person has their own set of strategies that they tend to excel in, and there are also areas where a person suffers a blip compared to the opposition.
It takes a lot of time to build a good trading team. However, a simple set of measures can be very effective in finding the right candidates, who will result in a profitable business. If you embark on the journey of building a strong trading team, make sure you use the right tools to find talented people. The secret lies in having patience.