Small Tier Size Can Equal Large Profits

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I meet with a ton of potential future SMB prop traders.  Obviously there is a great deal of interest in those who wish to trade with us.  Hey that’s part of my job.  Luckily for me I get to screen everyone who walks in our doors.  So I enjoy most of the interviews.  There have been a few two minute interviews.  I have bluntly told a few they were not prepared to trade successfully.  But the question I find to be a complete red flag, not gonna be a good fit, has no idea what it’s gonna take to make it, not interested in learning the craft of trading, is: how much money will I have to trade with?

This is not a good question to ask in an interview.  You have no idea how to trade, you have never made a dime trading, yet you are concerned with how much money we are gonna give you to trade?  Why?  If you want to be a good trader your job is to get better everyday until you have developed the skills to successfully compete in this market.  Everything else is nonsense.

 A few weeks ago one of our promising new traders asked to have his tier size increased.  My partner told him he would look at his work for the next few weeks and let him know.  The young trader was significantly positive for 14 straight days after the talk.  Now that is called performing.  That is a new trader who gets to trade with more size.  And the young man just keeps on getting better. 

Yesterday I got an email from a trader who should be doing much better.  He asked me to increase his tier size.  I told him the same thing that we told that other new trader.  We will look at your work.  Perform and you will be rewarded. 

But this whole obsession with Tier Size and money is silly for intraday trading.  It is not true that the more size you can trade with the more money you will make.  It is not true that you need to be slinging 5k share lots around to make good money.   The entire desk behind me today killed it today in HK, FNM, JPM trading small lots.  And 5/6 of them are all new traders. 

Work on getting better everyday.  That is important.  Trade with small size and then slowly increase your size as you are focusing on skill development.  This is how you make solid money trading and develop the skills such that you can handle more size. 

Good luck with your trading!

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