Will there still be trading jobs in the future?

Ive heard that, in the future, trading will mainly be carried out by machines using algorithms and that there will be hardly any trading jobs available in the future. Is this really going to happen? If so, what other jobs that are like trading could I do in the future that will not be affected by the growth of algorithm trading? I am currently in sixth form and I enjoy the financial markets and investments.

This was one of many articles I found that made me concerned:
http://www.worldfinance.com/home/robots-are-killing-off-wall-streets-traders

bump

maybe, maybe not ppl are always needed to man these machines anyway

software engineering, quant coming up with the algos to trade. dont think trading will die anytime soon, sure market making is shrinking in terms of labour needed, but decisions still have to be made on buy side.

Reply 3

Maker

Market trading will still be around especially fresh fish and fruit. But shouty men in colourful jackets will soon be replaced by machines that can do trades in microseconds 24 hours a day 365 days a year.

(edited 8 years ago)

Reply 4

Coollad1999

Yeah I know some people in the same position as OP who want to become traders but are afraid that they will lose their jobs...

Reply 5

hoping4Astars

Original post by Coollad1999

Yeah I know some people in the same position as OP who want to become traders but are afraid that they will lose their jobs...

Lol I guess I'll just have to consider other finance jobs.

Reply 6

Bill_Gates

1. Yes
2. Will there be as many? Nope
3. Will they require even more education and experience? Yes
4. Will they be well paid? Very
5. What type of firms will be hiring? Long term largely fundamental investors.

Reply 7

FiiL

My opinion is that some of the trading positions are going to be replaced by algorithms but not all. The next thing that I will probably do when I have more free time is to learn a programming language.

Reply 8

hoping4Astars

Original post by FiiL

That seems like a good idea. Are you looking to go into trading?

Reply 9

Dowie

Original post by Maker

those shouty men were replace over a decade ago, or at least they were in London Liffe and the IPE closed their floors, the LME has a few still but they all sit in a ring of benches in rather boring looking suits and only shout a little bit in the last minute of each session - I worked for a firm set up by one of the ex liffe locals.... trading progressed into rooms full of people pointing and clicking with their mouse on price ladders... in turn those people pointing and clicking with their mouse are now mostly replaced by servers co-located at the exchanges these days and have been for a few years - though there are the odd few still trading manually

things most of those people were doing were relatively simple and easy to automate - so yes the days of young graduates earning six figure sums manually trade futures spreads etc.. are mostly gone though in answer to the OP there is still a need for traders

firstly though high frequency trading is able to better take advantage of the sorts of inefficiencies locals and market makers would have previously made a living from in futures and options markets there still often needs to be someone babysitting the software - they'll need to understand what it is doing and how... and when to pull the plug, they'll also provide feedback and work on improvements along with researchers and developers

secondly not all markets rely on electronic exchanges - some products are still traded over the phone, there are still structured products etc..

also commodities firms still employ traders and they do more than just trade - they need good operational knowledge, knowledge of the supply chain etc..

so yes there will still be traders for the foreseeable future in areas where trading isn't all electronic or the products aren't standardised or where there is more to the trade than simply executing it

Reply 10

FiiL

Original post by hoping4Astars

That seems like a good idea. Are you looking to go into trading?

Yes, I am. Currently applying for SWs

Reply 11

username738914

There will still be traders. Where there are complex over-the-counter products that need to be priced effectively, there will be humans. Computers, at least for now, are only being implemented to automate vanilla products with tonnes of liquidity (i.e. Equities, FX etc) these machines are there to 'supposedly' even out spreads between bid-ask but they haven't proved that effective yet. The other problem with these algos, is that if they aren't maintained effectively, they pose a huge threat to the greater market with their flash crashes. Insert the algo traders and quants, more and more of these guys are going to get snatched up by banks, prop houses, hedge funds to develop the trading algorithms and strategies of the future.

Yeah, some traders will become obsolete, but as it stands, there are still plenty of profitable areas of trading to enter into - that don't have an immediate threat of automation. If you want to pursue trading at a bank, these areas would be exotic derivatives based on primary products (i.e equities, commodities, fixed income etc) and the more complex credit based products (CDS, Mortgage Backed Securities, etc). Those areas will likely remain mainly staffed by humans for the foreseeable future.

The takeaway is: trading is still going to be around, but just in differing forms.