Should This Trader Make a Comeback?

Below is an interesting trading anecdote I received via LinkedIn. I asked the writer if I could share his trading experience with our community. He agreed. The names and places have been changed for compliance reasons and we have no interest in saying anything negative about anyone or any firm on this blog.

What I find interesting about his note is:

1) Good traders are not always good teachers.

2) Trading strategies that worked in the past may not going forward.

3) Trading is a tough sport

4) Some catch a bad break and start during difficult market conditions. One of the first lessons we were taught at my starting firm is not to expect every year to be a great year if you want to trade pro.

5) Traders that fail can parlay their trading experience into solid jobs.

One opinion I would like to share, as I enter the world of Dr. Phil. Trading is not worth messing up a relationship with someone you love. Marry that girl, keep that job, and do some swing and options trading on the side.

Anyone here goes a very entertaining and insightful trading anecdote from a former intraday trader.

Dear Mr. Bellafiore,

My name is Brady (named changed), and I just finished reading your book “One Good Trade.” I know that your book was released two years ago, but I figured that you’d still enjoy receiving positive feedback from your readers.

In all honesty, I think your book is spot on when it comes to the world of Prop Trading. I’ve read many day-trading books in the past, but none of them come close to yours. Unlike the other books that I’ve read, so many sections of your book offer insight/knowledge that is actually relevant to today’s world of trading.

Also, I had a lot of laughs reading stories of your former/current SMB traders. I worked on a prop desk in St. Louis (location changed) for two years, and many characters in your book were similar to traders that I encountered on my own desk. My favorite story of yours was about the new trader who put up monster numbers on his first day but did so by trading poorly. We had a guy on our desk that made $3k on his first day of live trading, but he was trading like a putz. On his second day he put up similar numbers, and our desk aptly gave him the nickname “Golden Dick” because everything he touched turned to gold. When our head trader came back from vacation and saw the type of risk that Golden Dick was taking to generate his numbers, a closed door meeting (shouting match) ensued, and Golden Dick’s days were numbered. Several blow ups later, and Golden Dick was too afraid to trade anything but the demo.

Before you even wrote your book, I used to visit SMB’s website on a daily basis. You and your team really offer a lot of help and knowledge to the trading community. When I worked on the desk, my mentor/boss/funder named Boss (named changed) (who was also rich from trading the internet bubble) used to bust my balls for reading your team’s blogs. He didn’t approve of screen recordings/physchology/notes/etc. His philosophy was “Trade, Trade, Trade. That’s the only way you can improve.”

I love Boss and would do anything for him, but he is a poor teacher. There is no doubt that Boss is an incredible and profitable trader, but he could never explain his methodology coherently. His tape reading skills were superior, but when you asked him to explain his methods he’d tell you to “figure it out by yourself.” In many ways your trading skills/system are alike. However, he preached 10 cent plays and trading a basket of IPO stocks (which you could only trade on the long side until they became unrestricted).

In late 2008, Boss used his own personal money to start a prop desk. His idea was to hire twenty new graduates and train them to read the tape and scalp the crap out of the market dime for dime. However, without proper tutelage and resources, the desk did not perform well. One by one Boss began axing the unprofitable/unmotivated traders. I remember one day I had just finished reading Psycho-Cybernetics by Dr. Maltz, and I was anxious to use some of his quick positive meditation techniques. I closed my eyes for a moment to clear my mind, and when I reopened them a trader named Eddie who saw on my right was gone. I asked the other traders where he went and they said that “Boss just fired him”…so much for positive mediation. Two years past, and twenty traders got chopped down to me and two others (one of them being Boss’s brother).

It’s easy to call yourself a trader, but trading is never easy. Despite my ups and downs, the daily 4hr+ roundtrip commutes from (where he lived) to St. Louis and my long-term girlfriend (now fiancé) busting my balls, I still truly love equity trading. It’s the greatest job in the world for those who can make the grade. I’m currently a trader at a BD/IA in Boston, which involves more operational duties than actually trading duties, and it’s tough knowing that there are other traders are out there living the dream. Your book actually rekindled my fire for trading, and I’ve been trying to use your firms philosophy to find stocks to trade. However, with my firm’s $28 ticket charges (bogus) and terrible buying power, trading just isn’t quite the same.

I just wanted to thank you and the other traders at SMB for all the wisdom you share on a daily basis. I feel like I learned more about trading by reading your book than I did from actually trading those two years. I don’t know if I’ll enter the arena of day trading in the near future (fiancé and my advancing age seems to be my kryptonite), but if you ever opened a shop in Boston I’d be the first person to send in my resume. Your philosophy and culture is simply outstanding, and that’s something that I could have surely used two years ago.