So You Say You Want to Be a Pro Trader

I’m the guy you pitch as to why you should be hired for your “dream job” as a trader. This whole trader recruiting thing is inverted. You should not be pitching me. My desk should be pitching you. But you need to do some work before this can happen. Like start developing a track record now!

During a recent interview at the Las Vegas Trader Expo I outlined what I call the GM Test. If I were the general manager of the New York Knicks and I told you someone sat in my office and said, “You know, I really like this whole basketball thing. I have been playing a lot of pickup basketball with my buddies from DrinkingGames Dorm, we just won the school club championship, been hitting the weight room, put on a few pounds of muscle and am thinking I would be a nice pick for you in the First Round.” What would you think? You would think I was a soon to be ex-GM of the New York Knicks. But this is what we do in the trading world.

In our trading world some bright, ambitious, and well-mannered candidate sits in offices all across the country and talks of their love of trading. As proof they offer that they watch CNBC, read The Wall Street Journal, and play around with an underfunded Scottrade account. This is, to say the least, insufficient preparation for your life passion.

If I were the GM of the Knicks, I could have watched you in high school, AAU ball, college, had you in for drills, scrimmages with like talent, interviews, body fat and drug testing, etc. There is meaningful data available that I could use to predict how you will do in the future. In MoneyBall, by Michael Lewis, we learn some major league baseball teams shun drafting high school athletes because this playing data is too limited to make an investment in a player. And with CNBC answers like above, what can I really model accurately about your ability to trade pro? More importantly, what can you say to yourself about your ability?

Trading is a skill. You were not born a great trader. The insightful books on elite performance such as Talent is Overrated, The Talent Code, and Outliers teach us that to become great at anything requires purposeful practice over an extended period of time. In The Inner Voice of Trading, Michael Martin writes that it takes a trader about eight years to trade at the level of an expert. You need screen time to become a consistently profitable trader.

In June of 2011 SMB started its summer training class with 10 students. The two best performers traded in college. They started faster, did better, learned more and more quickly, added more value to the desk, and were most enjoyable to coach. At SMB Training Blog I have written about the rise of the college trader and barren university trader education. Start like TO and Swag!

Before trading coach Dr. Brett Steenbarger left the trading blogosphere for a top US Hedge Fund, he saturated his must-read TraderFeed Blog with the importance of working on your trading game. Paper trade. Trade a small account. No matter. Just trade. If trading is your passion, Dr. Steenbarger concluded that there’s no excuse in this hyper-connected, online age not to develop a track record.

Be that candidate who walks into an interview and drops a few profitable years of trading records on the desk of a partner. Then sit back and wait for him to pitch you.

You can be better tomorrow than you are today!

Mike Bellafiore

One Good Trade

The PlayBook

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