Shark sat down for an in-depth interview with Chat with Traders. Shark is one of the best traders in our trading space, let alone our prop trading firm. This is the first one-on-one interview he has ever given for the trading community. It has been so much fun watching him grow as a trader. We are so grateful to have been lucky enough to work with him. He is not just an amazing trader, but also a terrific person.
Here are ten lessons you can learn in this interview from this multiple 8-figure-a-year trader.
1. Don’t dig yourself into a hole when you start trading.
Shark highlights this as one of the keys to his success. He accepted he would suck at the start. He consciously ensured that he lost very little, while he was working to become consistently profitable. He had not lost very much money before he started to become consistently profitable. Thus, there was not a large hole for him to dig out of when he started making money.
2. Develop good habits at the start.
Shark credits learning good habits to helping him become consistently profitable when he began. Shark focused on improving his process over his PnL.
3. Learn from other traders.
Shark learned setups from other traders at the firm to become consistently profitable. He continues observing how others are making money and experiments with those trades.
4. Build from profitability.
Shark starts experimenting with a new strategy with small size. Only after he is profitable with small size does he ramp up his risk.
5. Get your psychology right.
Shark believes too many traders fail because they cannot keep taking good trades. Traders, according to Shark, need to work on their demons. They need to conquer what is holding them back from taking all of their good trades. If you take a good trade and lose money, you must take the next good trade. If you cannot, then this is what you need to overcome to become a consistently profitable trader, per Shark’s observation.
6. A big loss can be the turning point in your trading career.
Shark took an outsized loss in KBIO. He lost 10xs what he would in another trade. He used this as an opportunity to build his resiliency. He made back this huge loss in a few months. This showed him that he could take a huge loss, risk much more than he was, and still be fine as a trader. This gave him the confidence to trade bigger going forward. Sometimes, disappointment is an opportunity for us to become better than we thought.
7. Shark had the support of his family.
His family gave him the support he needed to become a consistently profitable trader. Shark asked his family to give him one year of support and they did.
8. Shark focused on lowering his stress to become a better trader.
Shark intentionally worked to lower his trading stress to reach a new level in his trading career. He was already elite at the time, but made even more progress with this focus: trading less, being more selective, and drawing down proportionally less.
9. Shark is ultra-competitive AND humble.
Shark credits his competitiveness to his success as a trader. He also notes he is humble enough to admit when he is wrong. Shark shares being both ultra-competitive and humble is a rare combination in a trader. Shark concludes that this combination has driven much of Shark’s success.
10. Shark is an exceptionally talented trader.
Shark notes his ability to trade many different positions contemporaneously. He has the rare ability to be able to track up to 30 different positions simultaneously. No one else comes close to this ability on the desk. No one else has his bandwidth. You don’t reach his level of success without having exceptional ability. He is a rare talent in the trading world.
Please enjoy the full interview here.
From all of us at SMB, train and trade well.
Mike Bellafiore is the Co-Founder of SMB Capital, a proprietary trading desk, and SMB Training, which provides trading education in stocks, options, and futures. Bella is the author of One Good Trade and The PlayBook. He welcomes your trading questions at [email protected].