This is a guest post from Joseph Gelb (Princeton ’20), SMB Capital- Summer Intern 2018

Jason Graystone, of Tier One Trading, recently interviewed SMB Capital Co-Founder Mike Bellafiore in this video.

Topics of Discussion:

What do seven-figure traders have in common that Mike mentors/coaches at SMB and outside the firm?

What formula does Mike observe that the best traders at the firm follow when they are trading at their best?

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What is a proprietary trading firm?

How was SMB created?

What does it mean to run a prop firm?

What should you expect as the very real learning curve of a new prop trader?

What are the most common mistakes for new traders?

What are SMB’s seven fundamentals?

Questions from audience

Resources:

Next SMB Training Webinar, that shares 3 setups that prop traders use daily with edge

One Good Trade

The Playbook

TraderFeed with Dr. Brett Steenbarger

The Daily Report Card with a seven-figure trader

Notes:

SMB is a PnL prop firm, which means it shares profits with its traders and provides all the capital, coaching, and technology.

SMB has a constant focus on improvement, whether that means becoming consistently profitable for a new trader, or getting bigger for a
seven-figure trader.

Mike Bellafiore previously worked at another prop firm.  He thought he would be better suited to run a firm based on his skillset, so he founded SMB with Steve Spencer.

Now, the infrastructure is in place which allows a trader entering the firm to have a very good chance at becoming consistently profitable and then a seven-figure trader.

All of the successful traders at SMB have been self motivated enough to review their trades intensively, and think about where the next big
opportunity will be.

Prop traders do a lot of work outside of market hours, from planning trades, to writing scripts (technology), to reviewing.

Traders are not expected to make money in the first twelve months.

It took one of SMB’s best traders 18 months to start making significant money.

It’s important not to be too directionally biased. The best traders follow the formula:
Thesis + Setup + Confirmation on tape + fighting for price = Great trade

The best traders are extremely receptive to new knowledge.

It is impossible to be a successful trader without cutting losses. Traders at SMB have intraday stop losses to limit risk.

Gradually increasing loss limits facilitates scalability in the long run.

*no relevant positions