What I did better as a trading coach/mentor in 2018 that might help your trading

BellaBella Daily Update


What will you do in 2019 to substantially improve your trading?  At the end of 2019, how do you want to feel about your progress?  Who will you be as a trader?

The culture at SMB Capital is to improve daily.  I finished my second book The PlayBook with, “You can be better tomorrow than you are today.”  This is also how I sign my emails.  My favorite quote I read this year was from Shoe Dog, by Phil Knight, Co-Founder of Nike, “Grow or die.”  What leads people to improve their performance is of great interest to me.  So in that spirit, here are some things that worked well for us/me in 2018 that you might consider to improve your trading game in 2019.

Express your edge in multiple products

Our firm made more from options trading, though primarily an equities desk.  Our floor manager noticed the edge our top traders had with options.  He challenged them to do more options trading in 2018.  Two made over 1 million plus just in options trading and on top of their equities trading, with another trader coming very close.

Collaborate with other traders

I collaborated/coached/mentored traders outside the firm, stimulating their growth and mine.  How did this all start?

Dr. Steenbarger encouraged our traders to adopt a Daily Report Card (DRC) in 2017 to progress.  He and I would review the work and goals of traders in this DRC and provide daily feedback.  You can see how we do this here.  Contemporaneously, a select few seven-figure traders outside the firm reached out to be coached/mentored by me.  I had never formally and daily coached/mentored traders outside the firm from other firms.  In hindsight, being open-minded to this additional work, was my best decision of the year.  And it wasn’t work at all, but rather, a true growth experience, developing into pure fun and new friendships.

With the purpose of expanding my trading network, learning, and improving as a coach/mentor I mentored a small number of elite traders outside the firm (all seven-figure-a-year traders).  They send me their DRC and I provide feedback.  All , most importantly, improved their trading significantly and saw an increase in PnL.  These traders have exposed me to new ideas to help traders improve.  Most importantly, they all have inspired me to be better.  Working with the best at their game elevates your game.

What will you do in 2019 to expand your trading network to drive improvement?

Keep excellent trading statistics

Dr. Steenbarger has worked closely with some traders at the firm to keep excellent trading stats.  We use Tradervue.  This has allowed traders to see their measured strengths and weaknesses.  We have advocated this best practice since 2005, but I re-emphasize its importance because there are still too many in the trading community failing to implement this essential best practice. 

Are you going to be an informed and improving professional trader in 2019 and keep excellent trading stats or something less?

Improve your health and fitness for better focus

I hired a trainer.  I was a competitive athlete when I was younger, but had not learned how to workout properly since college.  I wanted to learn how people train most effectively today.  So I hired a trainer to show me.  After a few months, I recognized that I really enjoyed the sessions and they were helping to improve my fitness.  Also, I noticed an ability to sustain my focus for longer periods and more intensely.  So I doubled down on what was working for me, the sessions, and booked 2 per week.

Often at this time of year individuals set health goals for the new year.  What worked for me, was finding something I enjoyed- learning how to workout better.  And then configuring the when, where and how on my calendar so it became a habit.  Now I am a person who works out 2xs a week with my trainer and with increased focus.

We are focus athletes as active traders.  There is work to be done outside of trading that improves our focus while trading.

Who will you be by the end of 2019?

Challenge yourself to be better for surprising results

I fasted and saw results I did not think were realistic.  Steve Spencer, my partner at SMB Capital, convinced me to try an intermittent fast to increase longevity- Prolon.  I lost 14 pounds without trying to.  The fast taught me that I did not need to eat as much and swapped some of the sugar I was eating for dessert for heather substitutes.  Steve and I have scheduled our next fast together for 2019.

Push yourself outside your comfort zone in 2019 to experience a new you.

Invest in yourself

I invested in myself.  I went to Tony Robbins’s UPW.  I took away helpful strategies that have improved my performance.  The best was swapping my daily habit (bad habit?) of listening to political talk radio walking to and from work for books on audible.  I now am on track to digest 25 more books a year.  Also, I hired a performance management coach.  During this training, I mapped out what was most important for me to focus on at work and life and added one powerful technique that anchors my day’s performance.  This keeps me laser focused on my truly important goals.  Each morning, I complete a To Do list and use this to shape my day and keep the focus on my most important goals.  Further, as I mentioned, I hired a trainer.  I am more educated and fitter.  Moreover, I continue to work with a health coach and track my daily progress.

What could you invest in for yourself in 2019, to help you achieve your goals?

When, where, and how will you do the work necessary to improve

We set goals for our traders with edge, developed a process to achieve them and hit them.  We outperformed as a trading desk in 2017 and set a goal to produce 30 percent more in 2018.  We hit our performance goals by September.  The key was mapping out the process that would lead to these results and calendaring the execution of this process.  Determining the When, Where and How you will turn an effective best practice into habit dramatically increases the likelihood you will develop a habit.

*Our top traders trade with enormous edge so this goal-setting only worked because they have it. Goals and a process alone, and without trading edge, do not help traders achieve success.

Check out Atomic Habits by James Clear for techniques to help you develop good habits.  2019 will be the result of effective best practices turned into habit that compound.

Guest lecture series at the firm

Brian Shannon (anchored VWAP), Todd Harrison (Cannabis sector), Andrew Left (short selling) all visited to provide continuing education for our traders. In January, we continue this new tradition with Ben Axler, Spruce Point Capital, who made the solid call in XPO.  We are grateful to one of our developing traders for jump-starting this project.

What will you do in 2019 to continue your trading education?

Partner with experts

We partnered with marketing experts for SMB Training.  One idea developed from this partnership was to expand our YouTube channel.  You might notice Steve and I producing, higher quality videos on this platform.  We are sharing specific trades that we are making on the desk, in detail, from which the trading community can learn.  We are also producing more videos from our traders and sneak peaks into our firm.  You know what you know.  What you do not know, and an expert does, may be thwarting your potential to progress.  Experts can help you find that next level in your trading/life.

Train and trade well in 2019!

*no relevant positions

Mike Bellafiore is the Co-Founder of SMB Capital, a proprietary trading desk in Midtown, Manhattan, and SMB Training, which provides trader education in equities, options, and futures to traders around the world.