Do you think you should be doing better as a new or developing trader? The concerns of one SMB Trader and my discussion with him can provide some insight into the best start to your trading career and the importance of culture.

Bella,

I’ve been thinking about what you said yesterday about being properly prepared. I’ve been getting better in my preparation and daily commitment to improving as a trader but I feel like somethings missing. I keep a detailed journal, have a detailed review at the end of the day, record my screen and go back to watch the trades that stood out to me and watch at the end of the day. I get shark to send me his daily review so that I can see how he traded certain stocks bc chances are I was in those same stocks and that helps a lot. I go over my review when I get home at night but I am just getting frustrated with my improvement. It’s not the fear of losing money or being wrong but I am still struggling with several mental aspects that relate to trading. I have been talking to Shark about that and he said the main thing that helped him was working on his psychology and how he read every book he could about that. I know that I am still new to this but when I played basketball it was usually a steady slow improvement and trading is very different. I can go from being super disciplined one day and extremely confident to feeling unfocused and feel like I have no clue what the hell I am doing the next. I am not tied up in my results by any means but I believe that I should be doing better than I currently am.

I responded:

So if we take basketball which i love and played most of my life and then compare

You have to develop trading skills

The hardest part about getting good at basketball when u r a kid is getting strong enough to really improve

When you get stronger there are a lot more shots you can attempt and thus make — same with trading

You are still in the getting strong stage

That takes time and screen time

How long have u been trading?

I generally do not see much from a trader in their first four months relating to results

What I see is them working hard everyday

What I see is them doing a daily review

Going thru their work

Doing a playbook trade everyday to archive

Finding out which plays they like the most

The new trader responded:

That’s a good way of putting it in a basketball sense. This is my third month to be trading actively. I position traded in college but had a very small account so was limited in capital and thus in the decisions I was making on a daily/weekly basis. I am not getting discouraged in my results and am very aware that I have a long long way to go before I can be upset with my P&l in stocks. My trading skills are very novice right now but I know that if I put in the effort, every single day, day after day for an extended period of time the results will follow. I can barely hold a conversation with someone at the end of the day because I’m so mentally wiped.

Bella:

…..Mainly the first four months is culture. Do u fit in? Do u work? Do u ask good questions? We don’t really care about your results.

New Trader:

I absolutely love the environment and the people here. Everyone is so different and I am beginning to notice everyone’s style. I probably have one of the best seats in the house sitting next to Gman and Shark. Even though I rarely take any of Gman’s trades, it is such a great learning process sitting next to him and seeing what he is in/why he is in it and running my trade ideas by him. It is really nice to be able to make money off of his ideas and he making money off of some of mine. That is what a prop desk is all about, helping each other make money and pushing each other to get better. I like it when Shark tells me to hold something for the bigger move and wait bc he expects this or that to happen. This I feel is really speeding up my learning curve. I sometimes wish my class had more trainees at my current skill level so we could discuss certain things we were doing well/struggling with at this stage but that might even be better for me in the long run to be thrown into the lions den with the best traders. It’s kinda like when you were growing up playing basketball with the kids who were older than you. I think that it’s a good thing.

I’m trying to ask as many questions as I can during the trading day. Leo is really good at holding stocks for the bigger move, Ryan is very patient, when Dane has conviction in an idea he has CONVICTION, Shark is very good at being in the right stocks and always being in a stock for the real move no matter how many times it takes him to capture it with size. I am trying to see what everyone is best at so that I can ask them specific questions that are their strengths.

When you begin as a trader it is very important to find the right culture for you. It is essential that you develop a personal work culture. You are not going to be any good in your first four months of trading. But you can develop good habits, learn a ton, develop parts of your playbook, gain screen time such that your tape reading skills improve, learn which stocks are not for you, find those who you can learn from, etc.

Trading firms have to be cautious to grow too quickly and with the wrong people. There are two new traders who we have to manage out of the firm because they do not fit our culture. There is one experienced profitable trader who cannot sit on our floor because he would mess with morale. There is nothing more harmful to a firm than a complaining trader. Traders have to sure that they have found a learning culture that is best for their long term growth as a trader. Traders have to understand that they personally have to spend a great deal of time reviewing their trading and making daily improvements.

Bella

You can be better tomorrow than you are today!

Mike Bellafiore

One Good Trade

The PlayBook

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