This is a Guest Post by AK of Fallible
AK has been an analyst at long/short equity investment firms, global macro funds, and corporate economics departments. He co-founded Macro Ops and is the host of Fallible.
The video above includes a segment of an interview I did with Tyler of Macro Ops. In it we discuss the reality of being a professional trader…
A lot of retail traders think going pro is the end all, be all goal. Because then you’ll get to quit your day job and get to fully focus on what you love — trading. And the money that comes with it is pretty good too…
But the reality is that a lot of non-trading activities go hand in hand with the professional industry. Two big ones are client management and fundraising.
Client management is no walk in the park. When you’re managing other people’s money, you’re not the boss anymore. They’re the boss. And 99% of the time, they’re not traders. They don’t understand how markets work. So whenever there is a little turbulence, you’re on the hook to keep them feeling good. They will be calling you and hounding you about why their portfolios are down. They don’t understand drawdowns, how a strategy works, how to control their emotions… and that lack of education gets pushed on you because you’re left to hold their hands. Now there’s nothing wrong with this! That’s your job when you’re managing other people’s money. But you need to decide whether it’s something you actually want to do. It’s not exactly trading.
On top of this, a lot of your time will go to fundraising. And that’s not just fun, wining and dining. In the beginning it’s more like struggling left and right to get a few cents. That’s what it feels like anyway. And in an industry where regulation costs are rising and fees are falling, you need a larger and larger sum of money to actually hit scale and make your business viable.
We discuss all this and more in the video above. Make sure to watch! And as always, stay Fallible out there investors!
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