Let me share a video jam-packed with trading advice and wisdom for developing and experienced traders. Three experienced traders are interviewed for this video, who have experience both as professional traders, but also mentoring traders. I make this distinction because the addition of their experience mentoring traders means they have spent significant time thinking of how best to communicate important trading principles to other traders. Thus, their thoughts on trading provide more opportunity for you to learn.
Who are the three traders?
1) @TheOneLanceB was the top trader at a tier one prop firm for the past two years. Lance now mentors traders at SMB and helps us develop our trader training.
2) @InvestorsLive, Nate Michaud, runs a top trading room for the trading community, is a very successful independent trader, and C0-Founded Traders4ACause, where I sit on the Board.
3) @LX21 is a well-known experienced independent trader. Greg was also instrumental in starting Traders4ACause.
For those looking to improve their trading game, you might check out this video.
Also, SMB prepared Show Notes for this video for the trading community. We do hope they help your trading game.
- One trading myth is that no one can beat or outperform the overall market. However, many active traders have disproven this false narrative.
- Trading can be life changing for a lot of people.
- Lance has evolved his trading after realizing how much time is spent behind a computer. He wanted to figure out/find a way to give back his knowledge and experience from a more visual spot compared to just watching the computer screens. He wants to benefit the community at large.
- As a trader, you want to feel like you’re doing something bigger compared to just trading and making money.
- No one starts off trading with the concept of charity in mind. But as you develop and succeed, trader’s realize how important it is to give back.
- Everyone has had some sort of mentor that greatly contributed to their success or set the example of giving back/helping others. They eventually want to be similar to this mentor, in terms of giving back/helping others.
- Everyone should be accountable to themselves.
- After you have a big loss, double down on the fundamentals of trading.
- Instead of trying to make your money back, work on getting your skills back.
- Do what was working before.
- Very slowly build yourself back up based on going back to the basics.
- Every bad trade starts off as nothing out of the ordinary, but eventually just doesn’t feel right and you realize things too late. Looking back it’s so obvious, but in the moment it may be hard to see.
- Small things can add up to become a big problem or a big success.
- When in a trade, if things begin to go wrong, you have to listen to yourself when you think things are going bad. Those are the first key moments. And you have time before things can get extremely bad.
- Some of those big losses can help you in the future.
- Think about the 5 year game or the 10 year game. Things are just a blip and don’t matter in the moment if you’re thinking about things in the long run.
- Focus on the big picture. Go back to the process.
- Everyone will have mistakes. We are discretionary traders.
- Stop thinking small and about how you can become a better trader.
- There are going to be preventable losses, but there aren’t necessarily going to be preventable things that happen.
- Traders can be too hard on themselves.
- Take a big loss. You have 24 hours to mope and complain. After that 24 hours, it’s go time and you need to reset.
- You can’t change the past, but you can change the present and the future.
- Reset and refocus. You can’t ever be scared.
- After a bad loss, you do get depressed. You still need to process it, but you need to overcome it.
- If you identify as a trader, one big loss doesn’t represent who you are as a trader. It may hurt that identity, but it’s part of the process.
- At the end of the day, things that traders think are bad are much better in the grand scheme of things. Things could be much worse.
- You have to focus on the work-life aspect when it comes to trading.
- Get a workout in
- Shut it off (work)
- Set some time aside for taking care of yourself. Whether it’s on the hourly, daily, weekly, or yearly basis.
- Trading is not a forgiving job.
- Putting in all the necessary work while being able to balance things like working out, a social life, personal time, etc. is vital.
- There are endless opportunities in the market at all hours of the day.
- Everybody is different even though people want to be exactly like other elite traders.
- There are no exceptions when it comes to trading. There are real opportunity costs and tradeoffs.
- It’s super important or vital to have a collective unit / mentor until you know concretely what you’re looking for.
- Don’t rely on someone too much because it will be hard to develop yourself.
- Be selective with who you associate with and communicate with.
- 1+1 does = 3.
- Support yourself with people who are smarter or better than you in different areas of expertise.
- Surround yourself with the “right” people.
- Once you connect with the “right” people, magic happens.
- You have the ability to give more.
- People don’t believe in sharing, giving, etc. until they do it.
- Lance didn’t have a single positive month in his first year of trading.
- The first step of being successful is being conscious and aware of the opportunity being presented.
- Eventually, it becomes a process of getting the reps in.
- The gut feeling is the aggregate of all of the experiences telling you something.
- No matter the type of trading, it’s all pattern recognition.
- Don’t focus on the most shiny option and don’t try to pin the top. Let everyone else do the work for you.
- Be on the right part of the “V” when trading. It allows others to do the work for you and to really hit something hard when you get that “aha” moment.
- Sitting on your hands is hard mentally.
- You don’t need to be trading, you just need to be profitable.
- The better the play, the more exponential you are betting on the play.
- If correct, it will allow you to make mistakes, and a lot of them, in the future.
- In almost all situations, we do not have an edge. Once we have so many things line up in our favor, that is when we potentially have the slightest edge over the market.
- In the hardest times or points in your trading career: Be the most resilient person you know. Be the hardest working person you know. Be honest with yourself.
- Edge can also come from what’s in between your ears and what is in your heart.
- One of the hardest questions is trying to figure out, “When is it time to tap out?”
- What would failure look like and take into consideration the timing of life.
- Figure out if you’re still enjoying the journey along with if you are still improving.
- With trading, people get lured into it by the sex appeal. It’s just the advertisement though and there is so much more work that comes along with it.
- There is no easy path….it’s about the hard work, dedication, and blood, sweat & tears – Lance
- “Fortunately for us, you can actually beat the market.” – Lance
- “You’re never done, that’s good and bad!” – Nate
- “Trading involves a lot of time being spent behind a computer. For someone who wants to give back to a community, a charity is the obvious way to do that.” – Greg
- “Trading can be a good microcosm for improving yourself and who you are as a person. And then being able to just use that to help others.” – Lance
- “There are 3 main ways to give back. Time, Money, or Wisdom. Everyone can do one of those in some form.” – Lance
- “There’s always an excuse if you allow it.” – Lance
- “I have to make it work. I have to make the system work.” – Greg
- “The market is always taking. But it also gives. So the faster you can get back to that equilibrium point, you’re going to be able to trade how you were consistently and fix the issue. It takes time.” – Nate
- “I don’t care about being the biggest trader or making the most money. I just care about this not being the end and I want some type of career in this job.” – Lance
- “One bad trade does not a bad trader make.” – Lance
- “You have to let trades work.” – Nate
- “Trading is evolution.” – Lance
- “There are times where discretion can help you, but mistakes will happen.” – Lance
- “Your worst day is my best day.” – Lance
- “There’s never enough time in the day.” – Greg
- “You need to take care of yourself.” – Greg
- “You’re never going to be 100% of what you want to be.” – Greg
- “When you’re new, you need other people’s viewpoints to help shape your lens of viewing.” – Lance
- “Everyone has their own style-set.” – Lance
- “There’s always so much value that can be exchanged.” – Lance
- “Never act from a position of scarcity.” – Lance
- “You don’t have to define yourself as one thing anymore.” – Greg
- “Build the reps. Build the reps. Build the reps.” – Lance
- “Strike when the opportunity comes.” – Greg
- “I try to minimize my exposure going into the open.” – Nate
- “I put most of my energy into 1-2 names.” – Nate
- “You’re only as good as the tickers you’re trading.” – Lance
- “If you simply play the right game, it’s a game changer.” – Lance
- “You gotta love what you do. You gotta be passionate about it.” – Nate
- “If it wasn’t hard, everyone would be doing it.” – Lance
- “Edge comes from many places.” – Lance
- “For every trader, there will be obstacles.” – Lance
- “If you have faith, life takes you to where you need to get.” – Lance
- “Being a good trader takes an enormous amount of work.” – Zach
Key 1-min Segments
- Lance answering why he wanted to become a trader (1 min mark)
- Everyone talking about giving back (8-10min mark)
- Greg on bouncing back from a big loss (11min mark)
- Lance on the large loss trade recovery (18 or 18:30min mark)
- Work-life balance talk (beginning around the 30min mark)
- Lance on the working with others topic (44min mark)
- Lance on the reps topic (54 or 55min mark)
- Nate around the 57min mark
- When deciding if it’s time to quit or not (1:11min mark)
(end Show Notes)
We do hope you find enormous value in this trading video for the trading community.
From all of at SMB, trade well. Give Back.
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 is the author of One Good Trade and The PlayBook. He welcomes your trading questions at [email protected]