The proper focus for a trader
Focus on being your best trader. Focusing on anything different may cause you to fall short of your potential. At our prop firm, falling short of your potential is NOT acceptable.
This game is about being your best. Yet, it is common for traders to strive to be better than another trader(s). Have you ever fallen for this human, but yet still, trading trap of yearning to be better than another trader(s)? Their focus is on beating or besting another trader(s) PnL. From my seat, this is not the best approach for your trading career.
Let me share a few experiences coaching traders that solidifies this point.
I want to be the best trader at my prop firm!
A few years ago, I started working with a trader who wanted to be the best at his firm. This trader was solidly in the top ten at his firm, but a good distance away from being number one. After working with this trader, I started feeling uneasy about his talk of being number one. This trader’s work was so outstanding. His drive was unparcelled. His conscientiousness was off the charts. His trading edge was strong.
Simply, when you start a trading firm you pray that a person and trader like this walks in the door. Great players make great coaches great. Great traders make great firms great.
One thing became crystal clear to me working with this trader… he was setting his sights too low. He had the potential to significantly surpass the number one trader at his firm.
Finally, after months of banter about being the number one trader at his firm, I just had to say something. I said to this trader, “I am looking forward to the day when you stop comparing yourself to other traders at your firm because you recognize that is not ambitious enough for your abilities.” I suggested this trader focus on himself. On what he needed to improve in his trading to grow. And we just focused on that.
We just focused on this trader becoming his best.
Fast forward a few years and today that trader is so much better than that prior number one trader at his firm. Imagine if this trader had just tried to be better than that former number one trader. He would have left tens of millions on the table in PnL. Worse yet, he would have not become his best trader.
And isn’t that what this is all about?
Shark wanted to be the best trader at the firm
I remember when Shark first stated that he wanted to be the best trader at the firm. He too was a long way from number one at the time. I remember, by name and PnL, who made more at the firm at the time. Hah!
Today Shark is in a different league than those traders who were making more. But Shark didn’t get there by just being better than those prior bigger producers. Shark got there by working on his risk management, expanding a winning strategy into large caps, and developing a new strategy that allowed him to trade much bigger. He got there by focusing on what he could do better to improve his trading. It turns out those other traders ,who used to make more, were not the right comparison for Shark. Imagine if he was just a little better than those traders now, instead of in a class of his own.
Can this younger trader become the best trader at the firm?
Over the weekend, one of the best younger traders at the firm asked who was number one in December at the firm. This younger trader was number two for the month of December at the firm. This younger trader, like Shark years before, then stated he wants to be the best trader at the firm. This is quite a stretch goal given the PnL of the top traders at our firm and the fact that he is a younger trader. Better than Shark? Better than SWang? Better than Raf? Better than some of the other traders at the firm?
As an aside, there is nothing more fun than running a firm and getting a Gchat from a younger trader thirsting to be the number one trader at the firm. There is nothing more fun than watching potential stars like this grow. When a younger trader is reaching out to you stating he wants to be number one, knowing the PnL of those who are number one, and he’s thinking about how to be the best these are the traders you want to coach.
You pray when you start a firm traders like this land at your firm. Traders like this can call, gchat, email anytime they want with drive like this.
Just try and be your best
Can this trader be number one? I don’t know. He certainly has a ton of ability, impressive trading edge, unusual focus during real-time, natural aggressiveness, and drive. But just like Shark and that other trader who wanted to be number one, the work remains the same. And I said so to this younger trader. I wrote, “Just try and be your best.”
Hey maybe the other traders at the firm are not the right comparison for this younger trader. Wouldn’t that be something.
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]