As Alan Martin Lucero, head of FX at Norges Bank Investment Management and Gregory Armon-Jones, managing partner, Armon-Jones Partners debated the role of the future trader, the audience were forced to question if the future truly is digital when it comes to traders’ roles.
Alan Martin Lucero, Gregory Armon-Jones
Specifically, the speakers claimed two sides of a coin – either that the traders of the future will speak the language of software engineering first and foremost (Lucero) or that coding skills will be irrelevant as AI solutions will fill that need and traders will go back to the phones (Armon-Jones).
The audience vote prior to the discussion swayed 69% in favour of Lucero’s hypothesis, with all to play (argue) for.
“We have a pretty good idea of how the trading desk of the future will look,” asserted Lucero, highlighting that it is only natural for the role of the trader to evolve in the same way Excel has moved on to Python and other tech.
“Let’s be honest about it, at least for the buy-side asset managers, we’ve become merely algo DJs at this point. We read the room – the mood of the market, we pick a track – the currency pair, and we play the album […] market developments will give rise to a new kind of role, some sort of Jack of all trades and master of none, or master of few – being a market expert alone will probably not be enough.”
Following this, argued Lucero, these ‘DJs’ will evolve further into conductors of an orchestra of AI.
“The future is exciting, and I think we are going from being just traders to architects of extremely complex workflows. Our value will be largely enhanced going forward.”
Armon-Jones countered that whilst tech is good for repetitive tasks and scalability, when it comes to market hiccups, a human touch and gut feeling remains valuable, asserting that – unfortunately – there is not enough historical data available for every eventuality and that the trader of tomorrow needs to have the experience of yesterday.
He added: “Traders need to be able to have a view. They need to be able to have a kill switch or have a gut feeling and portfolio managers want to speak to traders, they want to have someone who’s got an edge.”
However, delving deeper into how volatility could play into each’s respective prediction on the make-up of a future trader, Lucero suggested that going forward, the significant impacts of volatility will be much less of an issue as innovation ramps up.
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Elsewhere, Armon-Jones, speaking from the headhunter perspective, asserted that many fund managers request macro traders who’ve experienced turbulent markets, if that comes with the smell of “cigarettes and booze”, the more reassuringly human, the better.
Assessing this from a different angle, the panel considered whether the pervasive presence of voice traders is a so-called self-fulfilling prophecy, wherein the traditional trader continually looks to hire people who resemble themselves.
“A lot of people have made it and part of what we do is we look is look at data […] there are a lot of successful voice traders out there. These guys are valuable because of the market they’ve been covering, they know the ins and outs and know how to play the book,” said Armon-Jones.
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Ultimately, both things can be true – but in an ever more technological market, as always, the unavoidable truth was staring the audience in the face.
Following a lively debate, Lucero’s argument lost 8% of the vote, however the sentiment of the room indicated the expected, that though the future is full of potential in a world wherein technological innovation can and will never slow down, traders’ roles will indeed be irrevocably changed. However, the human touch factor is unlikely to go extinct.