Profitable Discretionary Traders Should Trade on Proprietary Trading Platforms

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I have a question regarding last Tuesday’s session on October 8. I don’t attend Tuesday’s sessions live due to me being tired and the time zone difference. Anyway my question is:

You mentioned that traders should seek other than off the shelf platforms in order for them to make more than they consistently do, assuming that they are doing fine with off-shelf platforms.

I don’t quite understand what you meant by that. Did you mean that to gray-box your favorite plays (coding it) to let the platform gives you alerts or even black-boxing it? So that you have more opportunities as opposed to waiting and manually scanning for your A setups and missing out? Is that what you meant?


Let’s start with a definition of an off-the-shelf platform. An off-the-shelf platform is one that anyone with money can access. You give money to a BD (broker dealer), and they provide you with an off-the-shelf platform that thousands use daily. Perhaps better said, this should be called a NO-Edge Platform. The platform will not help you make additional P&L and hopefully will not lose you any money with bad executions and technical outages. I repeat: hopefully.

Then there are proprietary trading platforms. For example, SMB trades on a proprietary platform called Gr8 Trade, with supporting technology Gr8py. Custom filters can be built by the traders and/or by our quants for our traders. Functionality to do just about anything you can think of is available so you can trade bigger. The ability to build auto strategies from your desktop without the necessity for coding skills is present. One of our traders said to me privately that even after only using this proprietary platform for a few months he was finding an extra $500plus a day with his custom filters and platform functionality. This is an extra 30-50 percent in P&L for him each month. And this does not include the auto strategies he is building. Our firm has seen across-the-board improvement in our P&L trading on a proprietary platform as compared to an off-the-shelf platform.

What did I mean by my comments? An off-the-shelf platform is fine for new traders. You are the worst when you first trade pro and it is most important for you to build a profitable PlayBook. But after that you are significantly hindering your chances to grow if you are trading on a platform than anyone can access. You are leaving serious P&L on the table by failing to tap into the power of a proprietary platform.

How? In this market, you cannot miss your best setups. HFTs make it difficult to handle larger orders without a proprietary platform. Profitable discretionary traders should be building auto strategies to add to their P&L. All of this is possible with a proprietary trading platform and not with an off-the-shelf platform.

Perhaps off-the-shelf platforms will improve in time. But as of right now there is a huge gap between the trading opportunities available when trading on a proprietary platform and an off-the-shelf platform. Huge!

Related blog posts:
Buying on Pullbacks
The 800-Pound Gorilla in the Room: Exits

You can be better tomorrow than you are today!

Mike Bellafiore

One Good Trade
The PlayBook

No relevant positions

One Comment on “Profitable Discretionary Traders Should Trade on Proprietary Trading Platforms”

  1. Is SMB’s proprietary platform available for traders that are funded by SMB, but not on the desk in NYC?

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