Friday, January 29, 2010

How Prop Firms Can Attract the Right Talent

My recent post took a look at how traders can make themselves attractive to proprietary trading firms. Now let's take a look at how prop firms can attract promising trading candidates.

The best way that prop firms can recruit top people is by being ethical and honest. Please take a look at the extraordinary post from Bella at SMB Capital on "The Failure Rate of a Proprietary Trader". How many prop firms would dare talk about failure and the sobering reality that the majority of prop traders don't sustain a living from trading? How many would play down the promises of riches and, instead, emphasize the importance of hard work and skills building?

Kudos to SMB for telling it like it is. It's one reason I'm honored to work with the firm. (And, no, they didn't solicit this post).

As Bella emphasizes:

"The market requires that you become an elite performer. Most people can 'punch the clock' at their jobs, do average work, and be appreciated by their employers. Heck you might even get promoted. Try this as a trader and the market will swallow you like a shark does squid. The best trader on our desk grinds it out daily like a steam pipe fitter."

Ultimately, all any prop firm can do is what a college basketball or football team can do: give you the best shot at big league success possible. The coaches can provide the training, teach the plays, and offer the encouragement--and then it's up to each player to make the most of practice and playing time.

So if you interview at a prop firm, listen for pie-in-the-sky promises and listen for tough love about the challenges of trading. If one firm lures you with the promises and the other encourages you to think long and hard before taking the challenge, you'll know the firm to choose: the one with the integrity to acknowledge and assist the steep learning curve ahead.