Becoming Attractive to Prop Trading Firms: Insights from Stockbee Blogspot

BellaMike Bellafiore's (Bella's) Blogs, Traders Ask10 Comments

Dear Mr. Bellafiore,

I just finished your book while on vacation in Cabo this week and was blown away. For the last several years I have wanted to get into trading professionally, but couldn’t make the move because I was not sure there was a system for learning and coaching that would help me get better, not just follow what the “superstars” did.

I am 34 this week, obviously older than the traders you normally recruit, and I do not have a background in finance. I majored in business, and then got an MBA and have enjoyed a successful career in marketing and management with an international surgical company. But, I discovered  trading a few years ago and it is where I want to be for a multitude of reasons.

I am not reaching out to you for a job. I know I don’t have a shot without a track record, and I have a commitment to my current employer for a year……

However, could you tell me some things I could do in the next year so that if I sent (a prop firm-edited by author) a resume they would want to interview me?

I will be reopening my trading account next week and will be trading my own cash to build up a track record I can use for interviews. I have generally traded options in the past, as I did not have enough cash to make large enough trades in straight equities (I did well during 2008-9 working both calls and puts on mostly PCX, GE, DDD, and STD. I had to close out the account to buy a house, pay for a wedding and get a second car) . I will have a larger capital pool this time around and will focus on straight intra-day equity moves. Based on the time difference, I will work on trading the Nikkei as well as the NYSE. I mostly follow CNBC and seeking alpha and SMB blogs, and had a subscription to Absolute Return, which I cancelled because I want to trade, not run a hedge fund. I generally use 3 minute charts and am familiar with the Level2 quotes. I use them to get a feel for price action, but I am sure that I need to learn how to “Read the Tape” as your team does. I am willing to do virtually anything to get my foot in the door with a prop firm and earn what I have achieved. I love the team atmosphere, and a group that is willing to work together to make everybody more successful…..

Any help you can give me would be appreciated, as I know there are only a precious few spots and a thousand qualified people trying to get them and I know I will need to show you something to get noticed.

Bella Responds

1. Trade. Trading is a performance based field.  If you develop a track record with even small sums of capital those are resumes that I want sent directly to me ([email protected]).

2. Read about trading. In Drive Daniel Pink shares a story about being asked how to pick a job. Most will answer to do what you love. Mr. Pink suggests to do what you do.

3. Develop connections with like-minded traders. Maybe in the end you will build your own trading community and not need these interview tips.

4. Find a Mentor. In Bounce we learn that there are very few high level performers who do receive excellent coaching.

5. Save. The longer you can survive the learning curve the more attractive you are to a firm. I have sensed the learning curve shifting to 18 months for the greatest leaps in progress for our traders.

What advice would you offer to SMBer EB?

Mike Bellafiore

One Good Trade

10 Comments on “Becoming Attractive to Prop Trading Firms: Insights from Stockbee Blogspot”

  1. Hey EB,

    You have a (day) job and yet you want to trade intraday. It looks like you have already traded before, but I suggest you stick to sim trading for a while before you trade your hard-earned capital (see Mike’s previous post about it). Also, is your capital made of money you can afford to lose ? You need to build a track record, so do it right now using paper trading and then switch to real money.

    Also, try to find out what good comes from you being older. For me, I am sure I am much more patient, more resilient and less stubborn than when I was 22. I do not need to be right anymore. You need to find out what you can put forward to a job interviewer for a trading job.

    (for the record, I will turn 34 in July as well and started trading ~3 years ago so I can relate to your story)

  2. Biggest lesson learnt for me over the past year is your trading style must match the time you can devote to the markets. I too have a full time job and a family to support, so chucking it in to day trade was not a possibility. The evenings and mornings are dedicated to analysis and trade management. If you have a day job of your own I can’t see how you can day trade (except perhaps different markets after hours).

    Living in Australia I find the US, AU & Asian markets closed upon arriving home and the UK stuck in the mid-day slow slog. I had to accept day trading wouldn’t happen and have switched to intermediate short term trends in AU stocks (grabbing swift moves over days to weeks as they explode).

    Like many novice traders I still struggle 4 years in but thanks to people like SMB I’m still motivated and enthusiastic. All the best to you 🙂

  3. The most important two advice that I was told that made me the last one out of my class to work here are:

    1. Expect to work at least 12 months without a check…… AT LEAST, because you won’t make any money. You will only be expected to learn how to trade and properly execute an idea.

    2. If you don’t have the emotionally energy and competitiveness to endure the market for this duration, don’t even bother. You’ll fail.

    I’m glad you mentioned tip #5: Save. I didn’t have any money in my pocket when I started as a young 23 year old. I had to work a night job to get through but that really taught me how to appreciate the opportunity. While some of my peers were trading with too big of a size, I kept my patience and churned as much trades as I could to learn (my loss limit was $200-$300 most of my first 12 months prior to it quickly increasing towards month 10+). It all paid off. I didn’t try to beat the learning curve. I embraced it. Trading takes time. My expectations were solidified since day 1. I was willing to give myself a chance.

    The trading environment got even tough prior to this crazy run and I almost thought I had to quit. I now work a second full-time job at Apple (starts an hour after the Close) but still make it my mission to succeed in trading. Passion for the markets, the emotional energy to sustain the harder times, and competitiveness to succeed are what helped me. Took me my 14th month to post a positive month but well worth it. Also, I have had two great people to speak with on a daily basis that has helped me keep my emotional level stable. A support system is needed. If you’re with a girlfriend/wife who isn’t ready to put up with this career path, don’t do it unless it’s okay to temper your relationship with these kinds of problems.

    Good luck to everyone pursuing trading. Be ready to have a Plan B, C, and D – my back up plan is to continue working at nights and to trade with a small $5k account at home to continue learning. If that fails, I’ll paper trade. If that fails, then I know that I have given it all I could’ve. Sorry for the emotional rant. I think I got caught up in all the feelings throughout the year =P

    – J from KTG

  4. Mike, at point 1) you said “develop a track record”. Does trading in simulator (investopedia) count? I had a lot of success trading in this simulator (I was even on the first place), being mostly a swing trader (1-4 days). So I started a real account at optionsxpress (they have no minimal requirement for funding) with 1000$, trading mostly options on ETFs. In 5 months I was at 4000. I had to close the account because I had a lot of things to pay for. But now I want to start again. Fact is I don’t want to use optionsxpress anymore (commissions) and I would like to be able to use a margin account. The problem is I don’t have more than 1000-1500 $. What broker would you recommend? I wanted to use Lightspeed (the broker you guys use) but the minimum is 10.000$ a sum I don’t have (I am also from Romania, Eastern Europe). So, what broker? And does trading in a simulator count? Does trading in a simulator make me more attractive to a prop trading firm? Thanks for all the work you put in this blog.

  5. I can’t speak for Mike, but in my opinion, if you go to an interview in a trading firm and say “hey, I have been trading in sim using this platform and here’s my track record”, then you’re ahead of the guy who has never traded at all. Now, sim trading doesn’t beat real money trading and showing both sim and real records during the interview is better obviously.

  6. Try Interactive Brokers. I agree with Grotaiche that sim results are not the same as trading with real money. To me a track record is trading live for a significant period of time with consistent results. But if you do not have the money to properly fund an account trading on a demo shows your interest in the mkts and will help you develop skills. Thanks for your question.

  7. On Wall Street Warriors I said at some point the market will cause you to think you will fail. And you just have to find a way to work through it. Keep at it!

  8. You seem to work hard and if you would accept my advice, I’d like to share it.

    Instead of working harder, try to find new ways to learn faster. Take things you think needs time to improve on and challenge yourself to improve on it 1000 times faster. I worked almost 24/7 for 2 years on trading and in the last 6 months I finally learned how to work smarter. I’d be out of business if I never made this change. As traders, I think a common mistake is to do the same mistake over and over until we give up or change. The key is to make a mistake and learn from it quickly. Otherwise you will feel alot of pain, which in this business is pure torture.

    Here are some things that helped me;

    -Journal. Write down an issue and BEAT IT TO DEATH until you master the problem. #1 most important thing. My journal entries used to be half page long, now each day its a few pages long. To me this is the holy grail of trading.
    -Twitter (Interacting with traders who trade like me). I love because it has a post on growing a second brain. Search for it. Bella wrote a post about twitter, its so important I almost had no idea but now I’m in the loop.
    -Stockbee’s self efficacy blog posts His post on jumping orbits changed my life. It really did.
    -Dr. Steenbarger’s Books (Do you even need an explanation why you should read his stuff?) I’ve read Enhancing Trader Performance no less than 10 times front to back. Each time it’s a whole new experience.
    -Ari Kiev’s books (just started reading but this got me to a whole new level)

  9. You could alter your style of trading. Instead of trying to be a swashbuckling day trader shorting Large on the open, you could just become a boring ‘trend following’ trader, designing a system that fits in with your current lifestyle. Instead of looking at markets through a Sniper-scope look at them from 30 thousand feet like a B-2 bomber.

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