The new SMB 5-year career path program

I will start by saying that this is my first and last post in this or any other forum of any kind. I am writing this because I benefited from this forum when I was applying to join SMB Capital and I see that obviously there’s a big lack of information and experience around these forums. I will not check or reply to any posts, but I hope this helps some of you to make a good decision about joining a prop trading firm.

The first thing I would recommend to anyone considering joining true prop trading is to find out more about it, no matter how much you think you know. Learning to become a profitable trader is a lot more like trying to become a professional poker player than anything else. For those on this forum who mention wanting to make $250k or asking how much you could make compared to working for a hedge fund or an investment bank, trading is not for you. Trading has to choose you, you don’t choose trading. If you’re looking for the highest paying job, trading is not for you. There is no practical reason to decide to trade intraday at a prop shop, your odds of making it big are as big as if you decide to become rich by becoming an artist or a professional poker player, 1 in 10,000. And the people who make it are not the ones who are in it for the money, but the ones who enjoy the process, with all its challenges. You HAVE TO love something about the trading process in order to make it, because learning to become consistently profitable will be the most frustrating thing you’ve ever done.

The second thing I would say is that to go into a prop shop’s trading training program you should be ready to tell all your family and friends that you’re trying to become a professional poker player and that you haven’t made a penny in a year. Did I just mention poker again? You bet I did. I do not play poker, but I have come to understand how much closer of a metaphor and lifestyle it is than almost anything else. Saying you take risk FEELS very different when you say you’re trading stocks and when you say you’re trying to become a professional poker player, the first couple months. But the process is the same. And after a few losing months of losing you will feel embarrassed. How will you explain to your family and college buddies (some of whom are making a killing with more stable jobs) and that hot chick at the bar that you haven’t made a penny in a year? How will you explain that you had to take a part time job in the food industry? Or that you are still being supported by your parents?
The answer of course, is f*ck you, I want to trade so that’s what I do, and those are the people who may become hugely successful in trading (and poker, painting, etc). In all of these fields, there are probabilities and skills involved, and the latter is what makes all the difference at a very high level.

If you’re wondering whether you should become a trader, the answer is simple. NO. Do not become a trader.

If you know enough about trading to the extent that you feel you have to give it a shot, please read on.

By the way, I am strictly speaking about trading where you take real risk. If you are looking or have a job where you put orders through and make a small but safe spread, none of this applies. There’s no reason to read or write a post on those jobs, it’s in the job description, and you take no real risk. God bless, your life will be a lot easier.

As a preamble I should say I am 30 years old and I’ve worked in Wall Street for the last 6 years. I got a 1540 on the SAT, back when the maximum you could get was 1600 and I have the series 3, 6, 63 and 7. I left my job at a bank that’s too big to fail to join SMB. I say this because I know in these anonymous forums there’s a lot of people who live in their mom’s basements, haven’t had a single job but somehow always have an opinion about something (usually negative). So I just want to establish that that’s not where I’m coming from.

Going into SMB Foundation you feel like you’re thrown in the water. There’s so much stuff to learn. The program is obviously a labor of love. They put so much time in it, I couldn’t recommend it more. A bunch of reading and video lectures, it really gives you a taste of what you will need to learn to become successful. This program you can just get access by paying for it, you don’t need to apply and can do it from home. The next stage is called Trader Development, and this stage you cannot just buy, you have to be accepted to. That means you actually joined the desk, whether in person or remotely. It’s supposed to last 2-3 months, but it really lasts for as long as you last (about half of my training class of 14 was gone by month 5). This is where you really start learning to trade, because you’re trading live, and when you’re trading live and not just watching videos all day everything changes. All of a sudden you realize that all the work you put into SMB Foundation is nothing compared to what’s coming. You’ll probably lose money doing the same thing you saw in the training videos every day. You will be very confused. You’ll find that the things that were working last month are no longer working and you’ll have to adapt. When you review your work you won’t be able to tell whether something worked out of luck or because you did something right. You will draw the wrong conclusion many times, this is the school of hard knocks. This is where it helps a lot to be at a desk, because you will learn from the people around you, even relatively new people, but also some more experienced traders. Being around other traders has its own challenges. You will see other people do better even though you know they may be reckless or work less than you. You don’t know how this is going to affect you until you go through it. After 3 months of not meeting your goals, you will think maybe trading is not for you, but that is also part of the training program. You have to go through it to know it. And if you don’t have a good reason to put up with all the BS required, you WILL NOT succeed. The point is that it’s not about SMB or whatever company (although some companies are super shady), but it is about skill and understanding this business, and believing in yourself and respecting the learning curve. Hard work is not enough, you will have to give learning to trade TIME. You will have to learn price patterns subconsciously to develop conviction which is what will allow you to really milk winning trades.

I believe the learning curve is longer than the 8 months SMB suggests. I think realistically 18 months is more like it. That’s a big different for someone planning to pay rent on their own, so pay heed. I think the main things SMB needs to improve are the following: They should make a big effort to retain experienced traders. In this cynical world, once someone figures out they can trade they will leave for whomever gives them a bigger payout. SMB has a niche in training new traders, but the floor would be a lot better if there were more experienced traders in the company’s payroll who feel that it’s in their best interest that other people do well in their trading. Give the mentors a bigger incentive, percentage of profits or whatever. Steve and Bella know trading very well, you’ll learn from them, but they’re not just traders, they’re also running a firm so they’re spread thin. To be honest, I was very disappointed with the mentorship at the beginning but then I realized that given the low success rate and high turnover in trading it makes sense. Mentorship does NOT exist in the industry unless you make friends. The main thing is to make friends with people who are serious about trading, and I made a few of those. The people who posted here saying there’s no incentive for a professional to teach you are too cynical. The human desire to teach is at least as big as the desire to learn or to make money, but you have you find your own teachers (one SMB friend who trained with me left to work as trading assistant for a former head of UBS equities - the guy is over 60, and absolutely ready and willing to teach).

Although I love trading, I don’t feel financially secure enough at this time to keep doing it, and I just got a job and I’m leaving. It’s been an amazing experience, very bittersweet. I’m happy to leave even though my trading mission is not complete and SMB made me addicted to trading stocks. I think I got a fair chance, but I’d rather take a break now, and I will be back later. The most important thing I can say to anyone is to focus on whether you really understand trading. I don’t want to say the firm where you work doesn’t matter, there are a lot of arcades where you have a 0% chance of success, where they have no edge and just want your commissions. SMB is a legitimate firm and they have a system that works. The office has a professional environment and the caliber of the other recruits was very high. I was really, very angry at SMB at some points, but whenever I took the perspective that as a trader you’re just running your own business and they’re consultants helping you along, I was very happy to have joined the desk. SMB does charge about $10k to everyone joining the program. I think it's worth it and I would pay it again, but it depends on your priorities and expectations.

Good luck in your future careers to everyone.

 

Cliffs notes?

 

Sorry to the guy who made the long post.. if you guys had an edge you wouldn't have quit. So, did they give you capital to trade after your training fee or you bring that too? Do the trainers post their numbers every day -- so you can see they are making money?

That doesn't sound encouraging. It also doesn't sound encouraging they are offering so many training things now that don't seem to have anything to do with one another.

I should probably be quite because its one of few prop firms I could get into.. if for any reason I ever wanted too, unlikely.

But... I call it like I see it.

A narrative that makes sense for me is that Bella (and other SMBers) were great trader at one point and they had a "legit" prop firm and made a lot of money. But, the robots and market changes made it harder to make money. I really got impression Bella wants to mentor. So, being very smart he decided he'd rather do that then trade especially since it was getting more difficult. They probably then started to see that life was just too darn expensive and that running the business was expensive and they started to think... we can make a lot more money by selling more stuff. I mean why put a training firm in NY? What's the benefit? Expensive as everything.

 

WOW , 1 of the best posts , I have read on ET, put this above your bed,folks..... (this guy doesn't sound like a shill)

If I take the training, I have to see the profitable records of the trainers,YES..

 

The guy could have the greatest edge in the world and trading still may not be right for him. That is because you will still have losing trades. Most people have a hard time dealing with this and find the stress of it not worth it when they realize they will have to do it for a long time. So him quitting due to having no edge is bullshit. Only a loser that can't trade successfully wouldn't know that.

Another reason it's obvious you can't trade is due to the fact that robots made it harder to trade as you claim. They made it easier if you know their tricks. You don't obviously. Why remark about others when you are still a trading infant? You won't learn anything like that. You have little hope with your personality profile. No wonder SMB rejected your resume. Who wouldn't.

And yes, that was one of the best posts I've read on here by the OP. Someone being honest and forthcoming is nice to see.

 

Exactly... Excellent Point...

 

Cashking..

Slow down their hoss! Bella has written a lot about how the robots made it harder. There was a good article on prop firms and how they changed their models over the years that explains the transition to training as traditional profits went down.. Sorry don't have it.

I'm suspect of SMB with all their new focus on training and away from trading. Does Bella trade even today? Does he post his daily profits? Do the rest of their traders? If not then why not why not? Bella has said he made "thousands of percents per month". If true.. don't you think he could at least show someone who dedicated 18 months of high intelligence how to eek out a small profit? Hmm

This student said they had a lack of experienced traders in the office. Sounds like he had a right to be upset...

No one says everyone has the ability to be a trader but this guys sounds like he couldn't even win. It is reasonable to question his training and the edge of his trainers.

Why don't SMB come out and show how much their good traders make over some reasonable time? They're selling training. How do I know if they can even trade good enough to warrant me to buy their training if they don't?

It makes sense to me. Anyone who offers training.. How can I value your training if I don't know what you consider worthwhile!!

 

That long post was nuts.. 'not in it for the money' WTF is that about! Emotional fulfillment? If so, get yourself into Gamblers Anonymous..

 

"I personally believe that most who make the attempt to become prop traders do not have enough money saved up, prior to beginning. Individuals that have 1 to 2 years of money for living expenses saved, have much better odds than those that do not. "


That is an incredibly high price to pay, 1-2 years living expenses, 150K or much more??? Move to the west coast, get some real training, find an edge(s) and find a full time job, trade the open, 6:30 - 7:30, trade the close, lunchtime, and learn an edge. Do homework at night.

 

a screen shot from the self proclaimed top 3 under 30, taken from his fb page. what kind of book do you think you'll be running if the head trader only trades odd lots? that being said, you will learn at smb. they should realistically be charging half what they do, because all they teach you is one skill (tape reading) of the many you will need to be successful.