Dr. Steenbarger of TraderFeed started an important conversation about the ideal training program for traders. As the partner of a trading firm founded on the principle of offering the best intraday equities training program on the street, we would like to contribute to this conversation. My thoughts are meant to supplement what Dr. Steenbarger has already shared so some things that he mentioned as important will not be discussed in this blog. The blogs should be read together. This is just the beginning of our thoughts. We would like to add more as Dr. Steenbarger continues to blog about an ideal training program (might I suggest A World Class Training Program?), and readers offer their thoughts about this topic.
When I first began in the late 90s you learned through osmosis. You sat next to an experienced trader and asked them them questions when they had some free time (if they had some free time?). Technology allows us to train much better. Today we can show you exactly why and where we are buying and selling. We can drill you on specific trading skills. We can watch hours of video to accelerate your learning curve. Sitting next to a trader and ONLY learning through discussion is an outdated training model. We can do so much better.
Today prop firms must offer world class training programs. Programs with everything Dr. Steenbarger mentioned and that utilize modern technology so the new trader learns quickly and thoroughly. When I first started I was trained by one of the top 50 greatest day traders of all time. He had five different positions open of ten thousand plus shares. I had trouble following what he was doing. I did not know the difference between a bid and an offer let alone how to handle multiple positions with size. At times I was confused. And this was the very best training program that could be offered at the time due to technological limitations. Today a new trader should expect nothing less than a training program that gives him the best chance to succeed, embracing the new technology that allows us to teach so much better.
Some supplemental thoughts to Dr. Steenbarger’s blog………
1. Select carefully. A training program is only as good as its players. A selection process must be crafted so that only those who are a good fit for your training program are identified. Trainees must understand that no one was born great at anything. Only through concentrated practice will they become a great trader. Every trainee must accept the challenge of becoming an elite performer.
2. Develop a program that allows trainees to practice. The best athletes practice much more than they play. Technology allows us to discover ways for us as traders to practice unlike in the late 90s. Back in the day it was lie in your bed, stare at the ceiling, and replay your day in your head. A great training program will allow you to practice specific trading setups as many times as you are willing to practice. “Practice does not make perfect. Only perfect practice makes perfect,” preached Vince Lombardi.
3. Enforcement is key. A world class training program that does not demand its students are learning every day is incomplete. Some students will not like all the direction and enforcement but the program must make sure that newbies are doing all the things the market mandates of them.
4. Find a respected leader. There is so much room for new traders to find different training methods than the one you teach. This can be a huge distraction. Most systems take multiple months if not a year to learn. If trainees are dabbling in other systems then they are not receiving the proper experience in yours.
I see this too often. New Traders start struggling at the start and then seek knowledge to change their results. Trading is mostly skill based and not as heavily dependant on knowledge as most new traders think. If you have a respected leader who espouses a learning system it will discourage slipping towards other training methods not in their best interest.
Do you think anyone at Duke questions Coach K’s teaching methods? “Oh Coach K, they don’t teach that at XYZ Central State University. So I don’t think I need to do that drill.” You do not hear that at Coach K’s practices.
5. Reward the best trainees with a spot on a trading desk. The goal for any training program should be to develop profitable professional traders. When a great high school athlete (I will try to stop talking about myself so much) is recruited to play D1 sports they are not promised playing time. They are promised an opportunity to compete. The best and only the best get a chance to play. It is a privilege to trade professionally for a living.
6. An environment of perpetual learning must be encouraged. First, traders should continue to learn throughout their careers. Second, traders should learn from others on the floor. It should not be a cult where the partners are the gurus and everyone bows to their awesomeness (though it wouldn’t hurt if we had a little more of this over here at SMB 🙂
7. Live trading must be a part of training. You can practice and read and learn all you want. There is no substitute for real-time trading experience.
8. Listen and get to know your trainees. What do they not understand? What principles would they like you to teach better? What makes each of them tick?
9. A training program must emphasize skill development and instill habits for traders to develop their craft. I recommend the following for intraday traders: a) a detailed trading journal, b) video review with an emphasis on exposure to more market patterns, c) visualization exercises so traders are mentally prepared to compete, d) a playbook of statistically profitable trades that are tweaked daily, e) communication with other traders who were in the same stocks as you.
10. The goal of this world class training program should be to develop well-rounded, self-directed, consistently profitable traders. Markets changes. Many can thrive in some markets, or one market, but the best traders can profit in any market. Will this training program prepare the trainee to thrive for the next five years in the many different trading markets?
Please share your thoughts on what would make an ideal training program.