As a plethora of trader training
academies, courses and prop houses tout their wares, Alice
Attwood takes a look at some of the prop trader training
For those who dream of a trading career, a
quick scour online shows that there are numerous trading houses
and education programmes available, but it is hard to know
which firm to go with.
While rumours of "dodgy" and "churn and
burn" approaches to practical training for trading are still
rife, with experienced traders able to regale unsavoury
practices in trader trading, a number of firms are trying to
dispel such rumours with their own trading offerings.
Yet traders tell FOW that while the market
for training may seem plentiful, the number of credible and
training programmes available for up-and-coming futures traders
The recent arrest of British futures
trader, Navinder Sarao, thrust proprietary trading firms, as
well as the futures market itself, into the spotlight. Indeed
the prop firm that trained Sarao, Futex, found itself, and the
subject of trader training into the spotlight.
Futex was established in 1995 and has been
offering trader training since 1998. The first off-exchange
electronic trading floor for futures and options traders, the
firm now operates out its headquarters in Woking and the city
of London, and also has sites in Wroclaw in Poland and
Sotogrande in Spain, with a new Frankfurt office planned to
open in the final quarter of the year – a joint
venture with a Futex alumni.
Futex describes itself as training academy
for individuals who want to carve out a proprietary trading
career. The company itself has two strands; training for
potential futures traders and Futex Live – an online
knowledge centre for market analysis and resources.
The programme includes technical
understanding, trading psychology, personal management and
market analysis elements.
The firm found itself the centre of
scrutiny in April when Sarao was arrested because the British
futures trader started his career with the firm, on its trainee
trader programme. Described by the firm as a
'diligent’ trader, Sarao worked at Futex from
early 2003 to the end of 2008.
Head of business development at the firm
and ex-Liffe trader, Dan Goldberg, estimates the training is
worth approximately £50,000.
The firm runs 12 week courses three times
a year, typically with an intake of 25 students – half
on a scholarship basis, and half self-funded students.
The firm’s full-time training
programme is also university-certified. The 12 week course is a
precursor to the one-year Proprietary Trading MSc at
Hertfordshire University. Cited as a "fast-track to becoming a
high-earning, professional trader," the course is a combination
of theoretical and practical trading and is the first
internationally recognised postgraduate degree in futures
The £12,000 course fee is split
between Futex and the University, £7,200 and
After graduating some students will
continue to trade on the simulated trading system; Goldberg
said 95% will trade live markets before getting to the end of
"At this point, you have a good idea of
who 'gets it,’ being a trader isn’t
for everyone. If we believe in someone, we will back them.
Sometimes this incurs a loss, but that is a part of the
business," he said.
Futex’s Goldberg describes it
as an "ethical business," delivering high value, which
ultimately is leading to higher profits. It is ethical due to
the fact that the firm tells traders what it takes, from the
lifestyle and discipline required to succeed in the market. The
course aims to give a complete introduction and instruction to
life as a futures trader, even down to the psychology of being
Once students graduate from the course
there is no guarantee they’ll
'go-live’ and trade. "It may be another three or
six months, it comes down to personal performance," said
The reasoning behind this is simple: the
firm is taking the financial risk. Futex pays trainees a
£500 'expense’ per month after the
three-month training, for a five-month period. Classified as
self-employed, students will continue to be mentored while
trading in a demo environment until deemed ready to trade real
markets. Desk and clearing fees are charged once the trader
Prop firm OSTC was founded in 1999 in
London and specialises in point-and-click proprietary trading
strategies on global futures markets. The firm offers a
practical training programme, supported by partnerships with a
number of universities, focused on financial markets, with
particular emphasis on derivatives.
The OSTC approach to trader training sees
the firm take on prospective traders as salaried employees,
demonstrating the investment the company is making, CEO Jonny
Aucamp told FOW.
The firm hires potential traders from
various sources, and has a number of collaboration deals with
universities. Ex-students have come from backgrounds including
engineering and financial services, for example.
OSTC said it invests time and effort while
students are still at university, meaning they can see the
characteristics of potential hires throughout their courses and
– importantly – ahead of hiring them, through
frequent meetings and seminar situations.
"We are behind our traders and want to
teach them not how to make money but how not to lose it; we are
interested in the long-term development. Execution of this is
not complicated, but our training looks further than this. We
cover the infrastructure of the market, analysis, the
psychology of trading, economics, and the long-term
relationships and investments behind what we are doing," said
The time devoted to the pre-selection and
searching for potential traders is key: "We are after a
specific breed of potential traders - highly driven, highly
disciplined, and that’s an ethos instilled across
Once training is completed, there are
opportunities for graduates to step into mentoring and office
management roles, through which they will assist new students
in learning OSTC’s values and theoretical
The firm recently signed an agreement with
Chinese broker Yongan Futures to set up its first office in
China. The new site - set to open in Hangzhou in the fourth
quarter of the year - will be the 17th OSTC office and mark its
entrance to its 10th country.
"The borders between the East and West
opening up is the next big opportunity in our sector and with
the right strategic local partner, we have the experience and
expertise to maximise on this opportunity," said Aucamp of the
Looking ahead, Aucamp warns that impending
regulations will likely continue to cause frustrations, partly
due to the lack of understanding around them, but regulatory
changes will benefit firms such as OSTC, as they will ensure
that "undesirables don’t get through".
Divento Financials, headed up by James
Sullivan, is a trading firm offering specialised training,
guidance and risk management for futures traders.
Divento Financial’s model is
again, slightly different.
Created as a joint venture, the
company’s trading course is the 'Level 5 Financial
Trading Diploma,’ which was in development for
just over a year. The diploma has just been approved by the
UK’s Office for Standards in Education,
Children’s Services and Skills (Ofsted).
Operating out of Tower 42 in the City of
London, the prop firm’s trader trading academy
offers access to experienced traders with dedicated instruction
on fundamental analysis, technical analysis, algorithmic
trading and market-making.
Much like the other London-based
counterparts, there is no "typical student," with the course
taken by a mixture of students; some graduates, some
experienced traders, some traders who are looking to retrain in
a new market or asset class, as well as ex-athletes looking for
roles after their sports careers.
The course is still in its infancy, though
trader training at the company is nothing new. The course will
see its first official course intake join the ranks in early
June. At a cost of £5,000, the course will see the
traders continually assessed while trading on real news and
market action on demo accounts, and each will have to take an
examination in order to graduate.
Like most of its counterparts, the Divento
diploma will also see a split between students backing
themselves, and those funded by Divento.
Upon completion of the Ofsted-stamped
course – which is set to run five times per calendar
year - Divento will retain those it deems the best students, or
those with the most potential, as a way of growing the business
with Divento-trained traders. Once graduated, students will
still continue to trade on a demo account for the next six
weeks or so.
The attraction of students with sports
backgrounds is important to the firm. "We have seen a lot of
interest from ex-athletes, and that’s exciting for
us. The discipline required to be a successful trader can be
likened to characteristics needed by sports personalities; the
drive to be the master of a craft – this drive is an
exciting prospect for us," said Divento owner Sullivan.
Looking ahead there are plans to build a
full suite of training courses, such as a two-day introduction
to trading and 'finance essentials’ course for
younger students, we well as the scope for the flagship Level 5
Diploma to be translated and run in other countries.
Headquartered in London’s
Tower Hill, The London Academy of Trading offers a 12-week
Level 5 Diploma in 'Applied Financial Trading,’
accredited by the Association of Business Executives, as its
Student fees fund the company. The cost of
the flagship course can be up to £8,000, depending on how
each student wishes to undertake the training, with all-online
(£2,000) to all on-campus (£8,000) options, as well
as a mixture in between, whether students are effectively
charged a desk fee for on-site earning and support.
LAT runs a range of other courses,
including a two-day introduction to trading, to a new nine
month Level 3 'Access to Higher Education Diploma in Trading
and Finance,’ with most deliverable online,
on-campus, or a blended combination of both.
Across the trading courses offered by the
academy, CEO John Devonshire expects LAT to train 155-200
students this year, and 3000-4000 in 2016.
The education structure is headed by
academic dean, Paddy Osborn, an ex-bonds trader and technical
analyst. He told FOW that around 50% of students undertake the
'blended’ option, a mixture on on-campus and
LAT students come from various
backgrounds, as with students from Divento and Futex,
there’s a split between graduates and mature
students, from London and abroad, looking for a career in
The training programme – which
centres on commodities, equity indices and the foreign exchange
markets – is focused on technical and fundamental
analysis risk management and trading psychology.
LAT rents trading desks at the academy to
students once they have completed the training, Osborn said.
Once set up, they can trade their own funds while still
receiving help and advice from professional traders and
mentors. For exceptional traders, "those who prove themselves,"
said CEO Devonshire, there is the potential offer of a job,
trading company funds on a revenue-share basis.
"Other students have been employed in
other roles within LAT, for example trade mentors, social
media, new projects and sales, while also trading live
accounts," said Osborn.
For those that move on, past students have
been successful in forging trading careers, due in part to a
key focus by LAT to produce 'desk-ready’ traders,
new hires that won’t need time and money spent on
additional trading. The academy also spends time helping course
graduates with job searches, CV writing and careers advice.
"Just because a student leaves it
doesn’t mean our relationship ends with them as we
continually want to monitor and assist them with their
progression," said Osborn.
Unlike recruitment to some other market
offerings, if a potential LAT student can pay the fees, and
passes the pre-qualifying exam, they’re admitted
onto the course.
The firm is keen to distance itself from
the promises of overnight riches and success made by some
"We specialise in financial market trading
and offer an accredited qualification. There are many companies
offering courses in trading. Some are very good at marketing -
"you’ll be a millionaire by Christmas" - but most
have a very poor reputation in the market," said Osborn.
"Our challenge is to reassure students of
our honest and robust approach to training. Our accredited
status ensures the quality of our service and consistency of
our assessment procedures. One major benefit for students that
we pride ourselves on is the level of commitment to students,"
A new dawn?
The inclusion by prop training firms of
trading psychology in their education programmes is
interesting. All firms stated that it is a key part of the
Sources at various companies state that
learning to trade and learning to be a trader are very
different things, thus the psychology of trading is an ever
important aspect for a prospective trader, as well as the
discipline and technical know-how.
The approach to learning may differ
between them but each firm purports to devote time to the
psychology of trading and adopting formal and structured
practices – a shift away from 'old
school’ prop trading shops which would start the
week with a room of potential traders and make daily, or hourly
culls until they were left with a few potentials.
This acceptance of the importance of a
more holistic approach to being a trader, rather than just how
to trade, could be the differentiator between new and old
school trader training. Perhaps this marks a new era for
requirements and options in the trader trading space, and the
end of the "churn and burn" approach.
However, a few things remain clear:
securing your seat at one of these training houses comes at a
price, is no fast-track to success and the life of a trader is
still not for the fainthearted.