Notes: 3 Lessons I Got From A Proprietary Trading Firm Founder & Trader

Article from

http://www.newtraderu.com/2016/12/29/lessons-proprietary-trading-firm/

For years, I have been passionate about trading. It is a discipline that is generally unknown by a lot of people and seen as mysterious by many. Nevertheless, I gave it a try three years ago and I don’t regret it.

Despite most people’s opinion, I decided to pursue my development in the trading field to hopefully reach the level of trading full-time.

Being unsuccessful at first, I set out to surround myself with people who saw success in the trading industry. After all, if other people became full-time traders, why wouldn’t I be able to do it? There was no reason.

Through my own podcast, I’ve been able to interview some of the greatest figures of the trading industry and learn from them. I have been marked and impressed by several of those interviews that highlighted some crucial success factors for traders.

On one of his very busy day, I sat down with Mike Bellafiore, a stock trader and the founder of SMB Capital, a proprietary trading firm located in New York, to discuss following my reading of his two popular trading books.

Mike has formed several successful technical traders himself and knows what it takes, both in terms of personality and learning experience, to thrive in the trading industry.

Through this article, I wanted to highlight the top three lessons I got from my interview with Mike Bellafiore. The purpose of those lessons could be to make you a full-time trader, but you’ll notice that the traits making a trader successful can be applied to several other areas of life, including business, school, and more.

Lesson 1: You Need To Adopt A Growth Mindset

At the start of the interview, Mike mentioned his favorite quote: “You can be better tomorrow than you are today.”

As simple as this quote can be, it is one of the keys to a trader’s success because it forces the person to adopt a way of thinking focused on growth.

That principle is described in the book Mindset: The New Psychology of Success. The author, Carol S. Dweck, Ph.D., explores the importance of mindset in a person’s success. According to her research, Dweck identifies two types of mindsets: a “growth mindset” and a “fixed mindset”.

She writes: “Believing that your qualities are carved in stone — the fixed mindset — creates an urgency to prove yourself over and over.” That is a sure way to remain with the same strengths and weaknesses.

On the other hands, individuals with a “growth mindset” believe that their qualities can be developed through application and experiences.

This “growth mindset” is what Mike Bellafiore believes to be the reason for most traders’ success. Being willing to accept not being perfect and grow over time is what allows most traders to improve and achieve a higher level.

Now, what about the next time you’ll think you can’t be a good public speaker or that you can’t make it through a certain school program? That’s a great example of fixed mindset and it is to avoid, Dweck would say.

Lesson 2: The Success Of Traders Lies In Having A Technical Edge And A Plan Executed Consistently

It is given that successful traders do not do things randomly. Their actions are crafted in advance according to a plan. Those traders need to pick trades that, more often than not, will work for them and, most importantly, remain consistent in the application of their plans.

Being right is not what is important. However, it is crucial for traders to have an edge. That means traders know that doing the same thing over and over again will lead to a higher probability of making money. It is a game of probability (because you cannot be certain of anything).

As a matter of fact, the difference between those who make it in trading and those who fail lies in how consistent they are in their application. That was the opinion of Michel Villa, a trading coach based in Montreal who has worked for multiple financial institutions (2015).

When I asked Michel what was the most important characteristic of the successful stocks traders he encountered, he answered: “It’s consistency”.

Lesson 3: Selected Habits Lead To Improvement

While a lot of struggling traders act randomly and move forward accordingly, the successful ones have habits in place to make the improvement process easier.

Those habits are very simple things that, once repeated over time, lead to major improvements. The goal is to pick best practices (i.e. journaling, trade reviews, testing, research, etc.) into periodic activities.

Bellafiore recommends figuring out the end results by asking yourself: “Who do I want to be in a year?”

A simple answer could be: a consistent trader making 10% return per month, or even, a student getting an A grade in a specific class.

Then, the idea is to figure out what you can do daily to reach that goal. For instance, you could review your plan 20 minutes a day or deliberately study a book on the topic (while taking notes).

This leads to consistent improvement, unlike a few random actions here and there that only add clutter to your trading.

Conclusion

In conclusion, Mike Bellafiore taught me a lot on the type of mindset I needed to show up with daily. In addition, I’m now understand the benefits that come with following a precise plan to achieve my goals (something I used to hate).

Lastly, I’ve defined a series of habits that helped me progress in several areas of life, whether that’s learning Modern Chinese or increasing my trading return.

Let me remind you that, although these lessons come from a trader, they can be applied to anything in life. What are you going to implement from this article?

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生存格局

连岳:一个人如果不按照自己所想的活,那你就总有一天会按照自己所活的方式去想。

看一个人的趣味,要看他的配偶;看一个人的品格,要看他的朋友;看一个人的能力,要看他的对手。

南明死局二,讲的是南明在南京朝廷中的政治斗争,阉党与东林党之争,眼中只有眼前的敌人,在局限的圈子里勾心斗角,内耗斗争严重,加上皇帝无能统筹全局,才使得满清可以顺利收拾残局。

其实和清末的情况如出一辙,都是在完善的集权政治体系下的内部斗争,使得对外无暇顾及。

Assault on W St.

From Radio:

Rating companies like Moody’s and S&P’s are private.

They can destroy companies and even countries with financial rating downgrades.

They can effectively alter exchange rate.

-37:37 left in time

You know, there’s not a person on this earth that’s worth over $100 million that came by that money honestly. Why don’t you take a look at the old money?

The Vanderbilts, the Carnegies, the Gettys, the Morgans, the Hearsts, the Rockefellers.

How do you think they got all that money?

They just annexed territories and licences and businesses and killed the native population and imported slaves and sold guns to both the north and south during the Civil War and controlled the politicians. And they’re heroes, they’re American heroes.

We teach our children what? Honesty and hard work are the keys to success?

My children… My children are not gonna go off to some war. They’re gonna go to Yale. They’re gonna go to Harvard.
And it’s gonna be the dumb, stupid, white trash kids and the black ghetto kids that are gonna.. They’re gonna fight America’s senseless wars? And they’re gonna protect American security and businesses. And it’s gonna be my business. My business is gonna get richer and richer. And my bonuses are gonna get bigger and bigger!

It’s the same old story. It’s the bankers and the owners and advisors who get rich! And it’s the little people who buy their stock that always lose in the end. To people like you!

It’s a free trade system, it’s capitalism, that’s competition in a capitalist society. That’s how the cream always rises to the top.

-Last part of movie

见与不见

by 仓央嘉措活佛

你见,或者不见我
我就在那里
不悲不喜
你念,或者不念我
情就在那里
不来不去
你爱,或者不爱我
爱就在那里
不增不减
你跟,或者不跟我
我的手就在你手里
不舍不弃
来我的怀里
或者
让我住进你的心里
默然 相爱
寂静 欢喜

非诚勿扰2最后出现的一段独白

A BEAUTIFUL MIND

Well, how big is the universe?
Infinite.
How do you know?
I know because all the data indicate it.
But it hasn’t been proven yet.
No.
You haven’t seen it.
No.
How do you know for sure?
I don’t, I just believe it.
So the part that you don’t know is if I want to marry you.

27 Dec 2015