Are you working on the right stage of your trader development?

We recently hired a trader who we think has a very bright trading future.

Trader had had some success trading a retail account and sought to work with our firm professionally.  Trader did not come thru the traditional path of apply, interview, hired, Foundation, Trader Development, Team Trading.  Because of Trader having some success in their retail account we onboarded Trader, agreed they ought to keep doing what they were doing in their retail account just with firm resources and work on sizing.  This has not been working.

This is a lesson in coaching and mentoring to the wrong stage of a trader’s development.

Here are the stages we see for a trader’s development at the firm:

  • Stage 1: Consistency- becoming a consistently profitable trader
  • Stage 2: Sizing- adding risk to their setups with edge
  • Stage 3: Breadth- expressing their edge in more products and trades
  • Stage 4: Trade structure- structuring their trades with more sophistication

Trader was working on sizing when Trader should have been working on consistency.  Trader needed to conquer Stage 1- Consistency.  Then Trader could best work on Stage 2: Sizing.  The coaching and mentoring and the Trader’s own review was focused on a stage of growth for which they were not ready.  Traders need to work on the stage most realistic to their development.

Trader was reset by firm to work on the proper stage for their development- Consistency.

After a trader becomes consistent, they are so dangerous.  Dangerous in a good way.  They can make so much more from here.  Their core is super strong, as a trainer might say.  One trader on our desk who is very consistent, literally hears little else from me other than, “trade bigger!”  This is all he needs to work on.  Stage 2 is so much easier for him because he has conquered Stage 1.

I do see too many traders in the trading community seeking to work on sizing before they are consistently profitable.  They struggle and wonder why they cannot trade bigger.  Perhaps it is because they are not ready to trade bigger.  Perhaps it is because they ought to be working on becoming consistent first.

I hope that helps.

Trade well.

*no relevant positions


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