I was asked by one of our excellent invitees what the average trader earns. I explained there is no average. There isn’t. Then he followed up with what does it take to be a successful trader. I like this question. And not only because for this one I actually have an answer. A few years ago I came up with a little formula: Proper background + great training program + cooperative market + hard work = success. You need all of these things.

SMB, with the help of many professionals, has created a recruiting matrix where we rank a candidate’s background. If you don’t have the proper background your chances of success aren’t so good for our style of trading. A good trading coach can’t or doesn’t have the time to teach someone how to be disciplined. You either are or you’re not. If you’re not then you almost undoubtedly cannot become a good trader. And there is a whole host of attributes that are also necessary. We crunch this information into our recruiting matrix and give each candidate a score. If you get a bad score, don’t expect an invitation to revisit. Sorry, this is Wall Street.

I tackled each variable for this talented Ivy League graduate: 1) he has an excellent background for trading; 2) we worked for two years on our training program, so you are covered on that front with us; 3) the market is cooperating, so things look good for all September candidates; 4) and then there was one: hard work.  As I told this candidate, now the ball is in your court. Will you take personal responsibility for your success? If you don’t, the perfect background, a great trading market, and a great training program will not be enough to see you through a great trading career.

As you can see we spend a great deal of time trying to figure out who will work. One of our new traders is our model. Will this candidate work as hard as HCH? Larry Bird wasn’t born the greatest shooter in NBA history. The market isn’t gonna be that impressed with you if you don’t put in the hours like the former Celtic great did.

So you got an 800 on your math SAT. Great start. You received a 4.0 from a top school. Terrific. Hungry to make a ton of money. Cool. But consider my partner, who is the smartest guy in any room. He has traded successfully for the past 12 years and he still works daily on his trading. Me, it’s 7:45pm and I’m still at the office and I’m not sure when I’m leaving. Are you going to work as hard as us?

We let go one of the smartest young people we have trained in our last class. Nice young man. Personally I enjoy his company. Again, exceptionally bright. And I know he’s walking around the streets of wherever he is right now, thinking that SMB is crazy for asking him to leave. But he didn’t work hard at his trading. It was a complete waste of my time and his to pretend there was gonna be any other result than him failing.

So that’s my formula. I suppose I could add a few things but I like simple formulas. If you’re not doing as well as you would like what are you missing? This is the best job in the world for those who are successful. This is what it takes to be a success.

You can be better tomorrow than you are today!

Mike Bellafiore

One Good Trade

The PlayBook

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