Training New Traders

Training New Traders - Training New Traders: What Makes for...

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Training New Traders: What Makes for Success Brett N. Steenbarger, Ph.D. As the coordinator of a training program for new traders at a large, proprietary trading firm in Chicago, I have had an unusually privileged perch from which to view success and failure among new traders. There is a general consensus in the trading community that, over time, the markets have become more efficient, making it more difficult to exploit inefficiencies. There is also a consensus that market challenges are only likely to increase, given the continued expansion of computerized trading. When you consider the many thousands of individuals who tackle trading and the percentage who can consistently sustain a living from their trading, you realize that trading is no different from acting or sports: many are called, few are chosen. I am often asked about the internship program that I direct at Kingstree Trading, LLC. The question most often posed is, “What are you looking for among applicants?” My usual response is to turn the question around: “What do you have to bring?” I know that if the answer is some variation of the theme of motivation, that the questioner won’t make it either in our program or in trading. Motivation is necessary for success, but not sufficient. There are very specific skill sets required for success in trading, just as there are for athletics, chess, or professional dance. No one would plausibly claim that motivation would qualify him or her for a spot on the Chicago Bulls or Joffrey Ballet Company. Why should motivation qualify one as a superlative trader? Interestingly, the “motivation” response generally means that the applicant is motivated to succeed at trading. It doesn’t mean that the individual is motivated to put in the work required to succeed at trading. You would be amazed at how many traders say
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Training New Traders - Training New Traders: What Makes for...

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