SMB’s newest trainees have now been trading “live” for four weeks.  Before going live they went through an intensive five week program to establish the building blocks for a successful trading career.  During the first five weeks of their training they sit near each other on the trading floor.  This helps to build a sense of team and encourages them to work together.

At the conclusion of the first five weeks we will move their seats so that they may become better integrated onto the trading floor.   Occasionally I will pick a newbie to sit in my row.  My motives aren’t totally altruistic.  Of course I expect them to benefit hugely from the chatter in my row as it is laden with good trading information.  But the main reason I want them in my row is that they have demonstrated certain traits which lend themselves to great trading success.   For instance, they have excellent pattern recognition skills.  Also, I have made the judgment that they won’t be particularly annoying.  Seriously.

One of SMB’s core values is that of “win-win”.  A newbie who joins my row will get extra insights into trading from myself on a regular basis.  They will receive additional real time mentoring during the Open and the Close (other newbies can listen to me speak on a training call as well).  This is valuable stuff.  But what I get in return is equally as valuable.

Let me explain.  Sometimes we will trade the same stock.  We are constantly talking about how the stock is trading.  What patterns of buying or selling in the stock have emerged during the trading day.  They will pick up on a bunch of stuff that helps them to identify great risk/reward plays.  After the Open I’m running around handling about 20 other things that relate to running the firm.  But the newbie is still watching the stock and gathering information.   When I sit down at my station to trade again the newbie actually becomes a great source of information.  They will tell me about some unusual buying or selling they observed.  Or how the stock moved quickly off of a particular inflection point.  This makes me a lot of extra money.

It is common knowledge on most trading floors that an experienced trader will often make a chop when a newbie shares valuable trading information.  A newbie who is well trained can identify many great risk/reward setups but is still too inexperienced to take full advantage of these scenarios.  The relationship is truly a “win-win” though.  As the newbie observes the more experienced trader profit from the newbie’s information they will gain more confidence in their own analysis.  This will lead to the newbie becoming more assertive in the future.

So thanks newbie for the extra 1k this week.  Lunch is on me.