Here is how you trade bigger: Advice to a junior trader on the trading desk

You want to trade bigger.

There is little worse than making a good trade and knowing you could have made much more.

Trading bigger is what is holding you back as a trader.  Perhaps what is even holding you back from being a professional trader.  If you could solve this problem, then you could start doing what you love full-time.

We work on this on our prop desk in NYC.  Traders develop edge, then seek to trade bigger.  Without conquering this challenge, they will not enjoy a career as a professional trader.

I worked on this with a junior trader on the desk just last night.  Below is a passage from his Daily Report Card:

Today I bought an inflection in CGC in the morning. A consolidation above VWAP after the pull-in held. Other pot names were strong. This would lead to an opening range break. This was a category 2 trade (single momentum move), and it did not reach my target. I did a good job scaling at extensions and raising my stop to stay profitable on the trade. I recognized that it was losing momentum and adjusted accordingly. More detailed focus on execution will help me do more of this.

I could have done better by fighting for price and getting bigger in this trade. I really need to focus in the coming weeks on fighting for price in order to get bigger and increase risk/reward. Paying close attention to the tape and where a stock is holding is necessary.

Notice how this prop trader wants to trade bigger.  He does a terrific job of finding a solution to help him trade bigger- fight for price.  By “fight for price” we mean to enter at excellent prices as this affects the risk/reward for the trade.

This trader does an exceptional job of working on his trading game.  He is consistent and intensive in his efforts.  He is a wonderful role model for those developing as a trader.  And look how he is working to trade bigger from his best trades.  That is so key. But there is something very important missing from his review that will help him improve his sizing.

Go back and read the passage above and see if you spot it.  What should he have added to this review to help him trade bigger?

I have to say that I see this often in reviews that I read with all levels of trading.  I am fortunate to work with 7-figures traders on our desk and outside the firm.  They too receive this feedback from me.  And I have been dolling it out quite often lately.

Here is what I wrote back to the junior trader on our desk to help him trade bigger:

This review needs to be more specific right here.  Where could you have been bigger? And how could you have gotten bigger?  Where would your stop have been when you got bigger?  Where would your exit strike be for if you were correct in the trade?

Specific.  Specific.  Specific.  About how you could have been bigger within your trading system in your best trades.

Don’t just say you want to trade bigger.  Don’t just throw out a solution for how to trade bigger.  Be specific about where and how you can be bigger in you best trades.

*no relevant positions

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