A World Class Training Program

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 Sitting next to a trader and ONLY learning through discussion is an outdated training model.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.

11 Comments on “A World Class Training Program”

  1. There are lots of sites out there who claim to offer world class training. Firms will always put their best foot forward in their websites and marketing materials. How does a candidate see through the noise?
    Specifically:
    What questions should a potential candidate ask of the firm to get them to “prove” that their training is world class?
    What makes a leader respected? Is it that he/she has made $X a year trading before or that he/she has the track record of consistently teaching others to make $X figures?

  2. There are lots of sites out there who claim to offer world class training. Firms will always put their best foot forward in their websites and marketing materials. How does a candidate see through the noise?
    Specifically:
    What questions should a potential candidate ask of the firm to get them to “prove” that their training is world class?
    What makes a leader respected? Is it that he/she has made $X a year trading before or that he/she has the track record of consistently teaching others to make $X figures?

  3. Dear Bella–
    When learning how to trade, would you argue that market data is of greater importance than the size of one’s training account?
    What market information or trading tools do you consider essential?
    Learning how to trade seems akin to the complexity of learning to fly, especially when it comes to the preservation of capital. I have no doubt that proper tools can make a difference, but at this point I don’t know what will best improve my trading skills—better tools or more capital to trade with? Do you recommend that your students start off learning more about the available trading tools rather than seeking to maximize trading capital, and how do you determine the timing of expanding your trainee’s access to the different trading tools available?

    These seem like questions that relate well to your topic on the ideal training program.

  4. Hello,

    Although i trade not your style. I have to admit i even get the point of the style mostly.

    I’am also trading mostly forex. I think your posts are a great. They contain everything someone needs to do to be succesfull. I also do my dayoutlook, vis ex, preview of the day, testing. Some people think all these stuff is useless and time consuming. It takes some time, i agree on that. But when i compare the time spended at doing all these things with the outcome of it, i think the time spended is only a fraction of the time you should be working to make the same in a normal dayjob. If you could already make this in a dayjob.

    Without a good prepartion every day again, i don’t belive in succeeding in longer term in trading.
    TO me the efforts are worth it.

    FOr some people not but hey i make money consistenly and they not.

    WHo’s right?

  5. Hello,

    Although i trade not your style. I have to admit i even get the point of the style mostly.

    I’am also trading mostly forex. I think your posts are a great. They contain everything someone needs to do to be succesfull. I also do my dayoutlook, vis ex, preview of the day, testing. Some people think all these stuff is useless and time consuming. It takes some time, i agree on that. But when i compare the time spended at doing all these things with the outcome of it, i think the time spended is only a fraction of the time you should be working to make the same in a normal dayjob. If you could already make this in a dayjob.

    Without a good prepartion every day again, i don’t belive in succeeding in longer term in trading.
    TO me the efforts are worth it.

    FOr some people not but hey i make money consistenly and they not.

    WHo’s right?

  6. Could you explain how you record your trades and then play them back? It took me a while to get smb but the more i watch , the more i get it. Reading the tape, its almost impossible to find good info on that, hopefully you touch on that more in the future. thanks

  7. Could you explain how you record your trades and then play them back? It took me a while to get smb but the more i watch , the more i get it. Reading the tape, its almost impossible to find good info on that, hopefully you touch on that more in the future. thanks

  8. Irb,

    Trading is about skill development and discipline. The size of your account is not relevant until you have developed trading skills. Thxs for reading!

    Bella

  9. Anonymous,

    Ask to see their training program. Ask to talk to those who have trained with the firm. Ask to sit in on the teaching. Meet the partners and traders at the firm. For example if you look at our training program you will find specific trading drills, videos, written lectures, etc for every minute, ten hours a day, for five weeks. This is just the first part of our training program. Then you move to trader development, where you next four months are mapped out. With technology a training program ought to be very comprehensive and packed with learning and skill development.

    Bella

  10. This is a good discussion. I especially appreciate the color here about the benefits of technology. Videos allow a student to become immersed in the trade without distracting live traders, and the “pause” button is critical, allowing students to ask questions and receive answers before they get swept up in the action again. Your video review sessions are outstanding for students. Digital trading journals are a similar example of using rich technology to increase learning with a minimum of busywork.

    Your point #4 is spot on, but it is also very difficult. For Ivy League students (I would expect the majority of your traders?) to absolutely trust a leader without question, there must be pathos/ethos/logos for that type of allegiance. It seems as though SMB has fostered this type of culture and leaders, and that is why it has been so successful.

    Unfortunately, most traders become accustomed to being lied to and mislead so often that they immediately criticize everything they hear. I am definitely among those who have been lied to by market professionals so often that I have extreme difficulty trusting what anyone says about the markets. I have learned complete methods, dedicating hundreds of hours, only to learn that the method itself is flawed or (worse yet) that the professional promoting the method doesn’t actually use the method. This type of shenanigan is ubiquitous in the marketplace, and it is why so many traders have such a long learning curve. Not only do they have to deal with the market itself and the difficulty learning how to trade, they ALSO have to sift through all the misinformation and false leaders. It makes the life of a newbie very difficult, and it makes it very difficult to trust a leader.

    However, you are correct. #4 is necessary – absolutely necessary – for a successful training program. It seems like the leaders at SMB are worth of that type of allegiance. I just wish that type of leadership was available to more students. Access has its price, and this is a competitive market after all. Anyway, thank you for the work you are doing!

  11. This is a good discussion. I especially appreciate the color here about the benefits of technology. Videos allow a student to become immersed in the trade without distracting live traders, and the “pause” button is critical, allowing students to ask questions and receive answers before they get swept up in the action again. Your video review sessions are outstanding for students. Digital trading journals are a similar example of using rich technology to increase learning with a minimum of busywork.

    Your point #4 is spot on, but it is also very difficult. For Ivy League students (I would expect the majority of your traders?) to absolutely trust a leader without question, there must be pathos/ethos/logos for that type of allegiance. It seems as though SMB has fostered this type of culture and leaders, and that is why it has been so successful.

    Unfortunately, most traders become accustomed to being lied to and mislead so often that they immediately criticize everything they hear. I am definitely among those who have been lied to by market professionals so often that I have extreme difficulty trusting what anyone says about the markets. I have learned complete methods, dedicating hundreds of hours, only to learn that the method itself is flawed or (worse yet) that the professional promoting the method doesn’t actually use the method. This type of shenanigan is ubiquitous in the marketplace, and it is why so many traders have such a long learning curve. Not only do they have to deal with the market itself and the difficulty learning how to trade, they ALSO have to sift through all the misinformation and false leaders. It makes the life of a newbie very difficult, and it makes it very difficult to trust a leader.

    However, you are correct. #4 is necessary – absolutely necessary – for a successful training program. It seems like the leaders at SMB are worth of that type of allegiance. I just wish that type of leadership was available to more students. Access has its price, and this is a competitive market after all. Anyway, thank you for the work you are doing!

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