Lessons From A Proprietary Trading Firm

Lessons From A Proprietary Trading Firm

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

Lessons From A Proprietary Trading Firm

This is a guest post from Etienne Crete @DesireToTrade.

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.


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?


Dweck, Carol S. Mindset: The New Psychology of Success. New York: Random House, 2006. Print.

“Trade With An Edge – Mike Bellafiore.” Interview. Audio blog post. Desire To Trade Podcast.

You can find the author of this guest post Etienne Crete @DesireToTrade at his facebook group Here is a free checklist he also offers. Free Forex Trading Checklist.