Jobs & Professions Similar to Trading

What other jobs and professions are similar to trading?

Those into trading tend to also be potentially interested in careers or professions that involve high levels of unpredictability, decision-making under uncertainty, and risk management, such as analysts and strategists across various industries.

Markets are system are characterized by their sensitivity to initial conditions and the difficulty in making long-term predictions.

These systems exhibit nonlinear dynamics, where small changes can lead to vastly different outcomes over time.

Let’s look into what fits this characterization.

Key Takeaways – Jobs & Professions Similar to Trading

• “Chaotic” systems expertise
  • Like trading, many professions deal with complex, unpredictable systems where small changes can have outsized impacts.
  • This includes fields like epidemiology, climate science, geopolitical analysis, and more.
• Decision-making under uncertainty
  • Successful professionals in fields like venture capital and cybersecurity excel at making important decisions with incomplete information, much like traders do in volatile markets.
• Interdisciplinary thinking
  • Top performers in fields like economic policy and sustainable resource management blend insights from multiple disciplines, similar to how skilled traders may have to understand finance, economics, math, programming, history, psychology, government, and other fields.

How Trading Is Different From Many Jobs and Professions

Trading is different from many professions and forms of analysis because market predictions directly influence market behavior.

In turn, this creates a self-fulfilling dynamic where trader expectations and actions with the system (i.e., market) can shape reality.

This complexity contrasts with other a lot of other analytical professions where predictions don’t alter the system itself, leading to more predictable cause-and-effect relationships.

Most people tend to believe that markets should more or less mirror the economy (or their subjective opinion about it), but experienced traders and financial people know that’s not how it works.

Rather, pricing (and other derivative factors that can be traded – e.g., volatility, delta, gamma) changes based on the discounting process of how things transpire and how future discounted conditions change relative to what’s baked in the price.

Also, the adversarial nature of some aspects of trading (e.g., alpha generation), where one participant’s gain is another’s loss, requires a unique skill set and understanding of market dynamics beyond traditional analytical approaches.

Example: Epidemiology’s Parallels to Trading

Even if epidemiologists have a great fundamental understanding of the drivers that create the outcomes they’re interested in studying, forecasts can be very different from what plays out in reality.

This is because the act of forecasting can change the entire social system surrounding it.

If a pandemic is forecasted to be bad based on the underlying epidemiological influences, it could actually be the opposite because that changes the actions that people will take in the context of it.

They’ll stay inside more, they might get a vaccine, governments will take certain actions, and so on, to limit the spread.

Or it could be even worse than forecasted depending on the mix of everything.

It could also vary on the stage of the pandemic. It could be bad in the beginning if people don’t take it seriously and could be better than expected as people learn more and alter their decisions and expectations accordingly. Or some other outcome.

Financial markets are similar.

• People tend to extrapolate the good conditions forward to the point where the opposite is more likely to occur, with the “good” conditions becoming discounted into the pricing…
• only for what transpires to underperform what’s expected…
• leading to market falls…
• and eventually new discounted conditions that are too bearish relative to what’s likely to occur…
• leading to things to be “bad” but better than what’s been discounted in markets, so markets rise and creating confusion about why.

Both epidemiology and markets are “chaotic” system in that involve complex interactions among numerous variables, making them difficult to predict and control.

They also involve social dynamics where cause-and-effect isn’t as clear-cut and there are unique feedback loops at play.

Let’s take a look at more jobs and professions similar to trading:

Financial Market Professions

Quantitative Analysts

Quantitative analysts – aka “quants” – work at the intersection of mathematics, finance, and computer science.

They develop models to predict market behavior and identify trading opportunities.

Their work involves:

• Creating algorithms that account for market volatility (e.g., stochastic processes)
• Developing models for risk, hedging, strategic asset allocation, tactical asset allocation, liquidity management, order execution, and other needs
• Analyzing large datasets to uncover hidden patterns
• Continuously refining models to adapt to changing markets

Quants face challenges similar to traders – and sometimes are traders – as their models must account for the inherent unknowns of financial markets.

A seemingly solid system can fail spectacularly when confronted with unforeseen market events or shifts in markets (e.g., evolving buyers/sellers, motivations, forms of analysis).

Risk Managers

Risk managers in financial institutions work on:

• Assessing potential losses from market movements
• Developing strategies to reduce financial risks
• Adapting risk models to account for new regulatory requirements

Like traders, risk managers have to constantly reassess their assumptions and models.

A risk mitigation strategy that works well in one market environment may become a liability in another.

For example, diversifying stocks with a larger bond allocation can work when there is a lot of volatility in changes in discounted growth conditions, but they aren’t inherently diversifying in an inflationary environment (e.g., 2022).

Economic and Social Forecasting

Economic Policy Advisors

Economic policy advisors face challenges akin to traders when attempting to forecast the impact of policy decisions.

Their work involves:

• Analyzing economic data to identify trends
• Predicting the potential outcomes of various policy options
• Adapting recommendations based on changing economic conditions
• Trying to understand the influence on social dynamics

Policy interventions can have unintended consequences.

A stimulus package designed to boost economic growth might lead to inflationary pressures or asset bubbles requiring new policy responses, much like how a trader’s large position can unexpectedly move the market and create correlations they don’t expect.

Urban Planners

Cities are complex, adaptive systems where small changes can have far-reaching effects.

Their challenges include:

• Predicting population growth and migration patterns
• Anticipating changes in transportation needs and infrastructure requirements
• Balancing environmental concerns with economic development
• Accommodating affordable housing while managing land use efficiently in rapidly growing cities.
• Tackling public safety concerns, optimizing city layouts for emergency services and disaster preparedness.

A new transportation hub might revitalize one neighborhood while inadvertently causing congestion and decline in another, which mirrors the interconnected nature of financial markets.

Supply Chain Managers

Supply chain managers handle volatile systems when overseeing global logistics.

Their challenges include:

• Predicting demand fluctuations across regions
• Balancing costs with timely deliveries
• Managing supplier disruptions and delays and the knock-on effects across businesses

A disruption in one link of the chain can cause widespread delays, just as market volatility can spread across asset classes.

Consumer Analysts

Consumer analysts handle consumer behavior, which can shift in ways that are hard to predict.

Their challenges include:

• Forecasting sales trends based on shifting consumer preferences
• Managing inventory levels across stores
• Predicting seasonal and regional demand variations
• Understanding that because consumer preferences adapt based on market conditions and trends, and these changes influence the very data used to predict them

A sudden change in consumer sentiment can lead to stock shortages or excess inventory, similar to how a market swing can create unexpected trading losses.

Weather and Climate Professions

Meteorologists

Meteorologists face some challenges similar to traders when forecasting weather patterns.

Their work involves:

• Analyzing vast amounts of atmospheric data
• Developing and refining predictive models
• Communicating probabilistic forecasts to the public
• Predicting long-term climate trends while balancing short-term weather forecasts

Weather systems exhibit chaotic behavior, making long-term predictions inherently uncertain.

A small error in initial conditions can lead to vastly different forecast outcomes, much like how minor market news can trigger unexpected price movements.

Meterologists’ jobs nonetheless differ in the sense that forecasting weather and making decisions about it doesn’t change what the weather will actually do, unlike in markets where expectations and decisions change its outcome.

Climate Scientists

Climate scientists deal with even more complex systems than meteorologists.

Their work includes:

• Studying long-term climate trends and feedback loops
• Modeling the impact of human activities on global climate systems
• Predicting potential future climate scenarios
• Factoring in how climate predictions influence policy, which influences said predictions, making it interdisciplinary with elements of economics, public policy, finance, government, etc.

The climate system’s complexity rivals that of financial markets, with multiple interconnected variables and tipping points.

Like traders anticipating market trends, climate scientists must constantly refine their models to account for new data, emerging patterns, and even practical social dynamics.

Healthcare and Epidemiology

Epidemiologists

As mentioned in our earlier example, epidemiologists face challenges similar to traders when modeling disease outbreaks.

Their work involves:

• Analyzing patterns of disease transmission
• Predicting the potential spread of infectious diseases
• Recommending public health interventions
• Monitor how conditions change not only epidemiology but the social context around diseases

The spread of diseases exhibits chaotic behavior, with small changes in initial conditions leading to vastly different outcomes.

An early intervention might dramatically alter the course of an epidemic, much like how a trader’s decision can influence market dynamics.

Technology and Innovation

Tech Trend Analysts

Tech trend analysts face challenges similar to those who study financial markets.

Their work involves:

• Identifying emerging technologies with disruptive potential
• Predicting the adoption rates of new innovations
• Understanding the long-term impact of technological shifts
• Knock-on changes (e.g., how a new tech product influence chip demand and new product creation)

The tech industry is always facing rapid change and nonlinear growth, making accurate predictions challenging.

A seemingly minor innovation can lead to industry-wide disruption, much like how a small market anomaly can trigger a major price movement.

Venture Capitalists

Venture capitalists navigate unknowns in a manner similar to traders.

Their challenges include:

• Evaluating the potential of early-stage startups
• Predicting market receptivity to new products or services
• Balancing high-risk investments with potential high rewards

The startup ecosystem exhibits chaotic behavior, with success often dependent on timing, market conditions, and unforeseen factors.

Like traders, venture capitalists must make decisions based on incomplete information and constantly changing circumstances.

Even for many highly successful VC firms who invest in early-stage companies, the percentage of investments that return any type of capital is often 40% or lower.

Social Media Managers

Social media changes quickly and are markets in themselves.

Their work involves:

• Predicting audience engagement based on content/trends
• Adjusting strategies based on platform algorithms

The viral nature of social media creates chaotic systems where seemingly random posts can lead to massive engagement that could have been set off by attention given to it by a well-followed account, similar to how smaller trades can generate large returns in certain circumstances.

Cybersecurity Analysts

Cybersecurity analysts operate in a chaotic landscape of evolving threats.

Their work involves:

• Predicting emerging cyber threats
• Identifying vulnerabilities in systems
• Managing real-time responses to breaches
• Thinking through how cyber “offense” is likely to involve to preempt such threats

Minor system vulnerabilities can lead to significant breaches.

Content Creators on Digital Platforms

Content creators face an uncertain and fast-changing environment.

Their work involves:

• Predicting content trends and viewer preferences
• Balancing creativity with platform algorithm requirements
• Adapting to changes in platform rules and competition

Success on digital platforms can be volatile, with minor changes in content leading to viral growth (e.g., increasing watch time by giving viewers what they want at the end instead of the beginning).

Environmental Management

Ecosystem Managers

Ecosystem managers deal with interconnected natural systems.

Their work involves:

• Monitoring biodiversity and ecosystem health
• Predicting the impact of human activities on natural habitats
• Developing conservation strategies for threatened species

Small changes like water quality can potentially lead to significant shifts in species populations or habitat conditions.

Sustainable Resource Managers

Sustainable resource managers navigate complex systems when balancing resource extraction with environmental preservation.

Their challenges include:

• Predicting long-term resource availability
• Assessing the environmental impact of various extraction methods
• Adapting management strategies to changing ecological environments

Like traders managing risk, sustainable resource managers have to regularly rethink their strategies in light of new data and changing circumstances.

A seemingly sustainable practice may have unforeseen long-term consequences, much like how a trading strategy can unexpectedly fail in changing market conditions.

Political Analysis and Strategy

Political Strategists

Political strategists face a chaotic landscape similar to financial markets.

Their work involves:

• Analyzing public opinion trends and voter behavior
• Predicting the impact of campaign strategies and policy proposals
• Adapting to changing political narratives
• Working with media, PR, marketing, and other types of professionals

Politics is highly sensitive to external events and public perception, making accurate predictions challenging.

A minor gaffe or unexpected news event can dramatically change the course of a campaign, much like how unexpected news can trigger significant market movements.

Diplomatic Advisors

Diplomatic advisors navigate complex international relations and face similar challenges similar to traders.

Their work includes:

• Analyzing geopolitical trends and potential conflict areas
• Predicting the outcomes of various diplomatic strategies
• Understanding what other foreign leaders are likely to do and how to respond to them
• Adapting to changing international situations

The global political landscape exhibits chaotic behavior, with small actions potentially leading to shifts in international relations.

Like traders, diplomatic advisors must make decisions based on incomplete information and constantly changing circumstances.

Geopolitical Analysts

Geopolitical analysts face uncertainty akin to financial markets.

Their work involves:

• Assessing global political and economic stability
• Predicting the impact of international conflicts on markets
• Analyzing the effects of policy changes on global trade
• Understanding history, culture, economics, politics, and social dynamics

Geopolitical systems are highly interconnected and unpredictable.

Conclusion

The professions share key similarities with trading in their engagement with complex, chaotic systems.

They all require:

• The ability to analyze vast amounts of data and identify relevant patterns
• Skill in developing and refining predictive models
• Adaptability to changes to the systems themselves
• Comfort with making high-stakes decisions under uncertainty

These professionals, like traders, have to balance their expertise and intuition with the inherent unpredictability of their respective fields.

They navigate probabilities where there are large unknowns relative to what they know, and where small changes can lead to outsized impacts.