flourpower471
Prior to ww1 there were limited periods where you would live on edge - if you have to march armies into position and have pitched battles (e.g. Waterloo) the soldiers have some warning and mental preparation time.
WW1 saw the start of widespread normality of living in trenches and never knowing when the artillery shell might kill you.
You mean like the good salary you get working for a trading firm?
I'm not sure what this comment you made is meant to be, but it reads like a blend of somebody who's high and a tik tok wellness influencer.
Trading is not a zero sum game in the sense you intend to suggest it is. It is 0 sum only if all participants have the same trading horizon.
The pool grows in the same way because it is linked to the economy. The markets are a variety of players with different requirements.
Most transactions occur between parties who have different horizons. Yes the hft makes money over 5s and the pension fund loses it. But the pension fund is looking at the return over the next year, so the small loss to the hft is just a cost of acquisition.
Orders of magnitude more leave their jobs of their choosing than are fired.
The op is making some implication across numerous posts that it's all basically a big con and it's all very simple.
It is like claiming you don't need to be rocket scientist to go to the moon because they just use metal and screws.
The individual parts might be simple in isolation. But it is the complexity of conducting large scale, large scope research in an environment that gives you limited feedback and will adapt to your own behaviour changes that is where the smarts are needed.
OP seems to not understand the inherent difficult of doing any research.
Almost anybody could be taught to make a simple circuit and battery from some basic raw materials. The fact it is simple and easy now we know the answer does not mean it was simple or easy to discover. Some of the greatest minds dedicated their entire lives to discovering things that now most 10 years olds understand. That doesn't imply you only need to have the intellect of a 10 year old to make fundamental breakthroughs in science.
Working in quant trading is almost pure research - and so it requires a certain level of intellect - probably at least the intellect required to pursue a quantitative PhD successfully (not that they need the PhD but they need the capacity to be able to do one).
Aside from the "theoretical" developments the other comment mentioned, your implication that there is some fixed truth is not reflected in my career.
Anybody who has even a passing familiarity with doing quant research would understand that black scholes and it's descendants are very basic results about basic assumptions. It says if the price is certain types of random walk and also crucially a martingale and Markov - then there is a closed form answer.
First and foremost black scholes is inconsistent with the market it tries to describe (vol smiles anyone??), so anybody claiming it's how you should price options has never been anywhere near trading options in a way that doesn't shit money away.
In reality the assumptions don't hold - log returns aren't gaussian, the process is almost certainly neither Markov or martingale.
The guys doing the very best option pricing are building empirical (so not theoretical) models that adjust for all sorts stuff like temporary correlations that appear between assets, dynamics of how different instruments move together, autocorrelation in market behaviour spikes and patterns of irregular events and hundreds of other things .
I don't know of any firm anywhere that is trading profitably at scale and is using 20 year old or even purely theoretical models.
The entire industry moved away from the theory driven approach about 20 years ago for the simple reason that is inferior in every way to the data driven approach that now dominates
It is neither deception or ignorance.
It's the same reason some of the best physics students get PhD studentships where they are basically doing linear regression on some data.
Being very good at most disciplines is about having the fundamentals absolutely nailed.
In chess for example, you will probably need to get to a reasonably high level before you will be sure to see players not making obvious blunders.
Why do tech firms want developers who can write bubble sort backward in assembly when they'll never do anything that fundamental in their career? Because to get to that level you have to (usually) build solid mastery of the stuff you will use.
Trading is truly a complex endeavour - anybody who says it isn't has never tried to do it from scratch.
Id say the industry average for somebody moving to a new firm and trying to replicate what they did at their old firm is about 5%.
Im not sure what you'd call a problem where somebody has seen an existing solution, worked for years on it and in the general domain, and still would only have a 5% chance of reproducing that solution.
It's like math v engineering - you can come up with some beautiful pde theory to describe this column in a building will bend under dynamic load and use it to figure out exactly the proportions.
But engineering is about figuring out "just make its ratio of width to height greater than x"
Because the goal is different - it's not about coming up with the most pleasing description or finding the most accurate model of something. It's about making stuff in the real world in a practical, reliable way.
The three body problem is also harder than running experiments in the LHC or analysing Hubble data or treating sick kids or building roads or running a business.
Anybody who says that finance is where brains go to die might do well to look in the mirror at their own brain. There are difficult challenges for smart people in basically every industry - anybody suggesting that people not working in academia are in some way stupider should probably reconsider the quality of their own brain.
There are many many reasons to dislike finance. That it is somehow pedestrian or for the less clever people is not true. Nobody who espouses the points you've made has ever put their money where there mouth is. Why not start a firm, making a billion dollars a year because you're so smart and fund fusion research with it? Because it's obviously way more difficult than they make out.
Saying it's all high school math is a bit of a loaded phrase. "High school math" incorporates basically all practical computer science and machine learning and statistics.
If I suspect you could probably build a particle accelerator without using more math than a bit of calculus - that doesn't make it easy or simple to build one.
Very few people I've worked with have ever said they are doing cutting edge math - it's more like scientific research . The space of ideas is huge, and the ways to ruin yourself innumerable. It's more about people who have a scientific mindset who can make progress in a very high noise and adaptive environment.
It's probably more about avoiding blunders than it is having some genius paradigm shifting idea.
People didn't stop working on this in 1989 - they realised they can make lots of money doing it and do it privately.