December 03, 2021

In the world of Finance, we deal with mathematics and complex formulas to find out various ratios that help us understand current portfolio status and future direction. On the other hand the world of physics is also filled with the language of mathematics. It is not a miracle that somewhere down the line, few professionals from these two different disciplines would have converged.  

After the cold war, a lot of government projects got scrapped in the former Soviet Union that focused and employed physics professionals. All over eastern Europe and Central Asia, physicists lost jobs. The next best thing they could do was to use their expertise in a new world of Finance. 

What is a forex trader?

A currency trader, also known as a foreign exchange trader or forex trader, is a person who trades currencies on the foreign exchange. ... Learn more about how these markets work and what it takes to do well as a forex currency trader.

science trading

If you have seen the movie “Margin Call” then you might have understood why one of the protagonists of the movie, Zachary Quinto was playing the role of a Rocket Scientist as Peter Sullivan. Peter explained to Jared Cohen, the Head of Capital Markets that he choose to join the wall street instead of pursuing a career in science because the “money was good.” It stood true for real life characters such as Katrin Suder who were working on neurophysiological mechanism  at Ruhr University in Bochum, Germany not so long ago. Now she is working at one of the top management consulting firm, McKinsey, as a finance consultant. Since her area of expertise focused on modeling mathematical equitation, she is currently applying same quantitative analysis techniques, computational and mathematical skills for modeling factors in consumer finance.

Internationally reputed firms like McKinsey had been recruiting laid off scientists with prestigious PhDs and giving them short courses on Economics and Finance so that they can work on complex quantitative nature of modern day Finance. Long gone are the days when Wall Street and financial houses used human traders to make money. In this new brave world of quantitative finance, every single market tick is the direct output of algorithms, programmed by scientists who came from very different background.

Is forex trading illegal?

Forex trading is legal, but not all forex brokers follow the letter of the law. While forex trading is legal, the industry is rife with scams and bad actors. Investors need to do their due diligence before venturing into what can be a Wild West version of global financial markets.

Can you get rich by trading forex?

Can forex trading make you rich? Forex trading may make you rich if you are a hedge fund with deep pockets or an unusually skilled currency trader. But for the average retail trader, rather than being an easy road to riches, forex trading can be a rocky highway to enormous losses and potential penury.

Can you  trade forex with $100?

Most Forex brokers will allow you to open an account with as little as $100. While it is possible to grow a $100 account, you will want to learn all you can from other Forex traders first as well as practice in a demo account before depositing real money.

You will not only find physicists but biologist who worked on human neutral networks, chemists who worked on evolutionary biology to be working on financial formulas to find the “edge.”

University of Illinois now offers Physics PhD candidates to join their Masters in Finance programme. Guess, the demand for scientists in Wall Street is so high that now the financial firms are actually expecting academic education in Economics and Finance from them to be hired as “Quant.”

Quantitative finance is now responsible for almost as much trade volume as human traders in major exchanges, including the Forex market. When quants are helping finance to make it more efficient and reducing the “human” lag. However, there is some significant consequence as well. Lot of experts blame the highly mechanical trading methods run by high frequency finance providers for the few market crash since the sub-prime crisis. Because these computer models and automated strategies don’t understand the concept of intrinsic value, they often over sell and over buy. Means, trends become stronger and often they can become more irrational compared to a situation where human traders would have gone before. Making short term trading more risky for everyone, including these quantitative strategies.

Next time if you find your next door physicists to be driving a Ferrari, you might not wonder what he actually does after knowing the new opportunities scientists are pursing in the world of finance.

Can Forex be a full time job?

The Forex market is tailor made for part time traders because no matter what timezone you choose to work, you're able to create Forex strategies for each session. People who work full time during business hours in their timezone, are able to trade during any of the other Forex sessions within a 24 hours day.

How hard is it to learn forex?

So, to answer the question “is forex trading easy or difficult to learn” we'd say that forex trading isn't hard… … its difficulty is mostly measured by how well-prepared the trader is. Learning a language is probably much more difficult than learning to trade in the forex world, but almost all people manage to do that.

Regardless how much we blame the systematic mathematical trading methodologies for the global financial crisis derived from the system risks they created, the fact remains that the future of international finance will include more scientists and quantitative trading because they are more efficient compared to human traders.