Academic Achievers = Better Traders?

[Mysticforex 13]

I know a lot of books written about trading say that there are no correlation. But if you notice, big multinational companies usually requires high CGPA for graduate positions and in some positions that need experience they still look for high academic grades to fill the roles.

 

So can we conclude that they think that high grades = better employees. My question to you all is, do you think there are any correlation between academic grades and trading success??

[steve46 12]

In both my first and second classes, I found that academic achievement was a strong indicator for success in trading...This is old news, as most wall street firms require a strong academic record from candidates.....and thats just to get an interview..

[SIUYA 11]

you need something to start the selection process, so why not use the 'fact' that a candidate might have some brains to start with. As a lot of finance and particularly trading is conceptual I think it does help to have the ability to show you can mentally grasp certain concepts, and have shown an ability to be able to apply them.

Larger companies also do a lot more personality type grading as well - more to ensure people fit into teams or roles - does that mean that many traders are potentially funneled into sales or risk?

 

A study I remember reading ( though the study was not in trading but I still think it applicable ) - then shows that motivation and perseverance plays a further and perhaps more important role to success.....

 

Personally I dont think being too academic necessarily helps - there is a certain amount of art involved, but you need someone who has a fair amount of self intelligence rather that pure academic abilities maybe. (Steve and other teachers may offer more insight here)

 

(If I was applying for a job now I would certainly not get in the door - only one degree, not enough mathematics)

[wrbtrader 10]

  Mysticforex said:

I know a lot of books written about trading say that there are no correlation. But if you notice, big multinational companies usually requires high CGPA for graduate positions and in some positions that need experience they still look for high academic grades to fill the roles.

 

So can we conclude that they think that high grades = better employees. My question to you all is, do you think there are any correlation between academic grades and trading success??

 

Multinational companies, institutional trading and so on...usually use academic success as a weeding tool to determine whom gets to get interviewed even though a few get into the interview process based upon their last name or whom their family knows.

 

In contrast, academic success is not a tool to determine ones success level after getting beyond the interview process. Simply, after getting the job...it comes down to whom you know and being in the right place at the right time because your actual trading results will be controlled, oversea until you moved up the ladder and then given more money to play with sort'uv speak.

 

I base my opinion via my own personal relationships. My old man was a floor trader (Univ. of Chicago alumni) and 4 of my best friends are currently institutional traders or work directly with traders (Northwestern Univ. alumni, Univ. of Michigan alumni, Boston Univ. alumni and London Business School alumni).

[SILVER 10]

I would not think this to be true in general,what an academic achievement shows,however,is that someone spent a few years concentrating on a certain field and this is a trait necessary to become a successful trader.

[BlueHorseshoe 10]

I doubt it. Otherwise I'd be loaded

 

Academic achievement, in fact, probably doesn't correspond to very much at all outside of academia. What's more, trading performance probably doesn't correspond to much outside of net return; look at the turtles, where many of those who were the least successful as traders now manage the largest funds - they had another skill - understanding how to adapt their models to make them marketable to more risk-averse investors.

 

BlueHorseshoe

[jpennybags 11]

I can understand why an HR department would seek out the best and the brightest academically, though from my experience it's a mixed bag. I've known those with several masters degrees who could not manage to assimilate in the workplace or through much of life.

 

I think emotional intelligence is probably a greater factor in the ultimate success of any employee and/or business person. Those that can combine delayed gratification, hard work, and a balanced life always seem to do better in the long run. Also, those who live lives of self confidence tempered with humility seem to be able to attract others to them... important and helpful in achieving any goal. These are skill sets that are built from living a disciplined life, and having good role models as a child. Success seems to find these folks... with good reason... and justly so.

 

Not sure that academics are that important, but you rarely find these skills in academic underachievers.

[SpideySense 10]

I suspect that the answer is part of the old trading answer: you need to combine a lot of things to make it work.

 

So it may be that AA = conceptual skills, AA = enough maths maybe, AA = did at least do the work required to get the degree. And you probably aren't completely stupid.

 

But obviously that isn't enough. A twat who gets an MBA is still a twat. And trading is about a lot more than the skills tested while acquiring a degree.

[TheNegotiator 13]

  Mysticforex said:

I know a lot of books written about trading say that there are no correlation. But if you notice, big multinational companies usually requires high CGPA for graduate positions and in some positions that need experience they still look for high academic grades to fill the roles.

 

So can we conclude that they think that high grades = better employees. My question to you all is, do you think there are any correlation between academic grades and trading success??

 

The trouble is that academic success usually only measures (and doesn't always do a good job) a small part of human intelligence and is in many cases severly narrowed with the often scientific/mathematical requirements asked for by companies advertising for jobs (obviously this isn't the only route into trading but it kinda helps to perpetuate the myth nevertheless).

 

Logical/mathmatical intelligence is only part of the equation for the probability of a trader's success, but I don't believe it is entirely necessary either. How much mathematics is really required? Look at the pit "type" traders. I think a better skill to have is situational awareness and spatial pattern recognition. These are associated far more with social ability. Although also, humans are very adaptable and just because someone seems to be socially adept, it really doesn't mean they have these specific skills either. They could have adapted themselves in spite of a huge deficit to their emotional intelligence/personality.

 

Human intelligence not only includes memory, conceptual understanding and logical application, but also emotional understanding and self control, perception, judgement, spatial/pattern recognition and probably other things that aren't immediately coming to mind! Clearly some of these things may be factors in certain areas of academia but others won't be tested much if at all.

 

Intelligence in its fullest form however, is only part of the equation for success in trading. Other important factors include motivation, determination, concentration, discipline, self-belief, strucured application and again probably other things which right now do not spring to mind!!

 

So getting back to the original question of whether academic success is correlated with trading success, I suspect probably not. However, like in any performance endeavour, to be the best of the best requires a fusion of most if not all abilities. So I also suspect that the most successful traders are those who naturally had academic success.

[MightyMouse 12]

Most successful people are not academic achievers and I do not think it is a prerequisite to successful trading either. If you don't make it as a trader then the academic education will come in handy, but there is nothing that you will learn from academia that will assist you in trading. Trading is not a science.

[wrbtrader 10]

The thread starter question was essentially about corporate traders...not retail traders (those trading from their homes).

 

Simply, for corporate traders...the individual will need academic degree and academic success to get to their interview and a little more than that to land a job with the corporate. What happens after that...successful or not will greatly depend upon how fast of a learner, following the corporate rules and being in the right place at the right time.

 

In contrast, retail traders obviously don't need a academic degree nor academic success to open up a trading account. Yet, I would bet my life that the successful retail traders out there have at least a high school diploma or equivalent. Yet, depending upon the high school (academies and top tier private schools)...some are tough like a university.

 

Therefore, don't fool yourself into thinking you would have been just as successful in trading had you not gone to high school or college. The fact that schools or educators teach us how to read from an early age should be enough all by itself to give merits to education as a requirement to become a successful trader let alone just a trader.

 

Seriously, without the ability to read, do you think you can be a successful trader. :rofl:

[Ingot54 13]

Academic "success" can also depend on how well you can cheat ... eg being foxy enough to get the test answers prior to final exams ... or getting the right person to sit the exam for you ... or knowing which underground site can issue your exam "pass" certificate.

 

I was once offered a medical degree (or any other degree I chose) from an obscure university via a URL ... there might be more than a few of those floating in the system!

 

Further, a story did the rounds that a first year med student complained about a high result in the Physics subject being one of the prerequisites to enter the faculty of medicine.

 

"Why is this" he complained, "when Physics is not really used in the study of human physiology and illness/wellness. Physics is a difficult subject."

 

The professor responded:

 

"Because we don't want idiots qualifying as doctors."

 

I guess it is the same in trading. Judging by my trading results in the past, I should have worked a lot harder on my year 12 Physics!

 

In my field I have worked with some professional idiots, yet they far out-rank me! One would think there would be a more appropriate entry requirement than academic achievement to qualify for a corporate trading spot.

 

Words such as adaptability, teachability, coolness under pressure, patience, tolerance come to mind. And I agree with The Negotiator and MightyMouse ... the real qualification for trading is not usually measurable academically - ie there is no screening test that guarantees the winner will also make a good trader.

 

Academic success can assist ... it is not essential.

 

I think the cliche: "killer instinct" might be handy ... because such people, to my mind, would exhibit such things as focus, discipline, consistency.

 

Of course, as we have heard elsewhere, being a sociopath almost guarantees you a job too! But to be honest, without experiencing the processfirst-hand, I simply have only an opinion, and that opinion will also be formed from concepts and preconceptions based on fact, fiction and hearsay!

[ForexTraderX 10]

  Mysticforex said:

I know a lot of books written about trading say that there are no correlation. But if you notice, big multinational companies usually requires high CGPA for graduate positions and in some positions that need experience they still look for high academic grades to fill the roles.

 

So can we conclude that they think that high grades = better employees. My question to you all is, do you think there are any correlation between academic grades and trading success??

 

Only very slightly. very, very slightly.

 

I believe those that have a higher aptitude for objective, emperically influenced, critical thinking skills, as well as a higher than average curiosity and a deep seated need to understand more, particularly that which is abstract, tend to be the types that have a higher than average aptitude for scholastic acheivement.

 

These same traits are also a big advantage when it comes to trading.

 

However, the are so easily undermined by SO MANY OTHER challenges in trading, and for the most important of all (psychology) they are just a bit better than useless....

 

It's something like being "a big guy" equating to being good at football (american football).

 

Yes, being 6 foot, 3 inches and weighing 255 lbs does indeed endow one to be naturally more likely to BECOME a professional football player....

 

but man, there are so many, many other things that matter more, or must be mastered regardless of physique, that it's basically statistically no advantage of being big, or only average, if you want to be a pro football player (how many guys out there are above average height and build, yet DIDN'T make it to the NFL??? probably about as many average sized guys that didn't.)

 

Yet, I will say without a doubt the best traders I know personally, and know of, were highly capable of academic excellence. Of course, many did not actually acheive great academic success for a variety of reasons... but, if they had applied themsleves, they would have. More so these days, with the pits and floors drying up. The raw, more primal instincts that one would find a potentially massive advantage in pit trading does not translate at all to the screen. So more so these days, I would say academic potential is more correlated to trading potential. but it's just that. potential. maybe. if everything is lines up too.

 

TraderX