Recently, I exchanged emails with a successful prop trader at a Tier 1 firm. I have known him since he was deciding whether to pursue trading, while still in college. We have kept in touch during his trading career. He has become a *very* successful trader.
I asked him to share his thoughts on why he became successful. Here is his analysis. It is nothing short of inspiring……..
Why did I succeed when most failed? (I think 4/25 of my class are still here)
1. I was the hardest worker and still work quite hard 5 years in. Everyone wants to make a million dollars and be the best, but so few truly go all-in and put true 100% effort in. I stayed the latest, I came in on weekends. Still go to work most weekends for a few hours.
2. I didn’t give up. Most of my class weren’t fired, but quit when they lost hope after 10-16 months. Most of them probably were doing better than me, but I refused to ever admit defeat. If someone can do it, I can do it.
3. I worked smarter. I had to teach myself this and wish I knew it way earlier, but I learned to systematize everything. Anything can be broken down and systematized. Most importantly, I always ask where is the easiest money I’m missing? What change will have the biggest impact to my PnL? What is the best use of my time to study? 95% of my time is spent on 5% of the best opportunities. I catalog in excruciating detail the pros/cons of the most important plays and watch videos of me trading them again and again. I find it so important to try to simulate real time trading and do as many reps as possible re-trading the top opportunities and rewarding how they develop (I video record all my trading).
4. I feel immense emotional pain from failure. I was trained alongside one other rookie and any day he did better than me or made a chop where I didn’t, I’d feel such dissatisfaction. I use that dissatisfaction to work harder and push myself whereas many get complacent or demotivated. I’m not OK botching a trade, I’m not OK with having a negative day, I’m not OK with someone in my office doing better than me. If I make $10k in a trade and someone else makes $30k, I’m kicking myself. I need to do better than everyone else every single day. I will help everyone get better, I want everyone to succeed, but from 9:30-4 it is a competition each day and I want to win it. Probably not healthy psychologically, but I personally don’t believe you can be your best without it.
5. I love trading. I played video games growing up and dreamed it could be my job. Day trading is the best high-stakes fun challenging video game ever made 🙂
What advice do I give to future traders?
1. IMO, most people don’t have what it takes. 70% of people can’t push themselves no matter what environment or motivation you provide. 5% will push so hard no obstacle or environment could ever stop them. For the 25% “swing” candidates, the best advice is if you if this is your dream, you need to do what it takes to achieve it day in, day out. NO EXCUSES. Do you want to sleep in more than you want success? Do you care about eating lunch more than improving or making a chop? While you fool around, your competition is getting better.
2. Systematize everything. Where is the easiest money? How can you create a system to avoid the same mistakes? What is the best use of your time?
3. Don’t quit if you want it bad enough.
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