The decisions you make about your trading business matter.
To this point, I received the note below from a 7-figure trader on our desk. He was a 7-figure trader by his second year of trading. Not easy to do. Not often you see that. This is a very talented trader and person. Even for him his decisions about his trading business matter.
(The Tempting Tesla Trade You Must Avoid (to be consistently profitable) @TheOneLanceB)
That note sent to me by that 7-figure trader:
Hey, Bella. Just wanted to share a pretty eye opening experience I had recently regarding the power of learning from people more experienced than you. In my 2023 goals chat, I placed a big emphasis on developing myself as a coder. Both to build tools to enhance my trading and to backtest potential areas of untapped edge in the markets. Hearing this, Lance strongly advised me to try to outsource some of this work, especially early on. Specifically, he recommended having a more experienced coder write a script for me and to then learn from their work.
Fortunately for me, my best friend in the city is a software engineer at Amazon. Taking Lance’s advice, I got together with him one afternoon and sat with him as he essentially created a backtest for me from scratch. I can’t properly emphasize how helpful this was for me. Between watching him work through the debugging process and studying his code later, I probably learned more in 4 hours with him than I would’ve learned in 20 hours on my own. It truly was that big of a difference in terms of learning efficiency. Outside of learning, it also might make sense for me financially to be outsourcing some of this work to someone with an aptitude well beyond mine.
Of course, this concept extends far beyond the scope of just learning to code. Our growth under the guidance of someone more experienced is exponentially greater with time than our growth alone. I think sometimes my pride tells me it’s best to build and learn everything I do on my own. In this situation, Lance’s advice really showed me otherwise. Anyway, I thought you might appreciate the sentiment. It’s certainly something I’ll be conveying to anyone that is trying to pick up a new skill.
Think about the consequences of this talented trader making the wrong decision for his trading research.
What would the results have been for his research if he kept trying to research alone?
Where would he be with his research if he was not savvy enough to listen to the advice from Lance, a multiple 8-figure-a-year trader?
Where would this trader be with his search for edges if he partnered with a coder who was not so talented?
How much more limited would this trader’s upside be if he was not seeking to find new edges through technology and research? What if he was just working on his game as a discretionary trader?
Where would this trader be if he did not join a prop firm, that organized monthly meetings to help traders improve their businesses?
Where would this trader be in he joined a prop firm that did not offer resources like Lance, and proprietary tools to test edges?
Young traders too often think they have unlimited time to become a consistently profitable trader. They believe they can make mistakes and time will heal past poor decisions. They feel their talent will prevail in the end. Or their passion will ensure success. They undervalue the power of surrounding themselves with trading wisdom and resources can have on their career.
From my seat, getting things right matters. A good decision can make all the difference. Taking the right step can be the difference between underperforming and elite performance. Making the wrong decision on how to build your trading business can be the reason for failure. Choosing the wrong firm. Not ensuring you have the necessary resources to grow. Not surrounding yourself with pros who can exponentially help you grow. This can kill your trading business.
This is a business. Your decisions on how to grow it matter. Amazon revolutionized its business by starting AWS. Apple brought back Steve Jobs after firing him a decade earlier, which changed their history. Bob Iger led Disney’s acquisition of Pixar, which revitalized their animation business. Business decisions matter for businesses.
Choose wisely with your trading business decisions. Dip into the power of trading wisdom that surrounds you. Lean on pros who can help you make the best decision. Your decisions about your trading business matter.
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, @MikeBellafiore, is the author of One Good Trade and The PlayBook. He welcomes your trading questions at [email protected].
