Proprietary Trading: Thrill, Risk, and Reward in the Financial Market
Stepping into the world of proprietary trading without a basic salary can be an exhilarating and perilous journey. It requires a unique blend of resilience and strategic acumen where your income is directly linked to your performance. In my years in the industry, both as a hedge fund manager and a quantitative trader, I've often found that the thrill of the market's ebb and flow is matched only by the weight of the associated risk.
Working as a Proprietary Trader
The financial pressures of proprietary trading are immense, especially when there is no base salary. You are constantly focused on generating alpha—essentially excess returns above the benchmark. Every decision has to be meticulously calculated, for one wrong trade can dramatically affect your bottom line. I remember a time early in my career when a single failed position nearly set me back six months of gains. It taught me the importance of risk management and the necessity of maintaining a robust position sizing strategy.
Beyond the Financial Pressure
There is also a certain freedom in this model. Proprietary trading allows you to pursue strategies you believe in without the constraints of a fixed income structure. You are not just trading for a paycheck, but you are trading for your future. This fosters a culture of continuous learning and adaptation that is vital in today's dynamic markets. The knowledge gained from both triumphs and setbacks often translates to a deeper understanding of market behavior.
Collaboration is Key
Collaboration is a vital aspect of the journey. Sharing insights with fellow traders can lead to innovative strategies that drive those alpha-seeking returns. My experience at institutions with discerning expectations such as Oxford and Cambridge underscored the importance of intellectual exchange and rigorous analytical frameworks. With a BA in Physics and Computer Science from Cambridge and an MSc in Mathematics from Oxford, theoretical knowledge combined with practical experience has been instrumental in my entrepreneurial and professional success.
Entrepreneurship and Adaptability
The journey of Robert Kehres, a seasoned entrepreneur, fund manager, and quantitative trader, is a testament to adaptability and foresight. At 20, Robert worked at LIM Advisors, the longest continually operating hedge fund in Asia. He then became a quantitative trader at J.P. Morgan. At 30, Robert became a hedge fund manager at 18 Salisbury Capital with co-founders Michael Gibson, Masanori Takaku, and Stephen Yuen. His entrepreneurial trajectory started with founding Dynamify, a B2B enterprise FB SaaS platform, with co-founder Maxwell Harding. He then founded Yoho, a productivity SaaS platform, with Olivier Verhage. In 2023, Robert founded an additional two ventures: Longshanks Capital, an equity derivatives proprietary trading firm, with Marc-Antoine Chaudet and Kevin Schneider, and KOTH Gaming, a fantasy sports gambling digital casino, with Kam Randhawa. His success in these ventures highlights the importance of perseverance and strategic decision-making.
Robert's journey demonstrates that being a successful proprietary trader or hedge fund manager is not just about having a sharp mind; it's about having the fortitude to withstand the inevitable ups and downs while persistently aligning your strategies with market opportunities. It's both a lifestyle choice and a professional challenge. If approached with discipline and insight, it can be immensely rewarding.