p e o p l e
2012
I 12
67
ä
Richard Chignell: We’re doing a series of articles
looking into how professional traders actually go
through the psychological processes of trading
but also some of the aspects that they might do
outside of trading which people don’t typically
think of. I remember in Mike Martin’s book “The
Inner Voice of Trading“ that you have a thing for
running round the big loop in Grand Central Park
and I know others have yoga and other things as
a way to balance their trading. So I’d like to delve
into that a little bit.
Mike Bellafiore:
Yes let’s tackle that. You don’t want
to make trading too important in your life. Not that
it’s not important but you need to have other things
outside of trading that are important to you. You’ve
got to have good friends, you’ve got to be close to
your family, you want to have hobbies that interest
you whatever they are. So for example after the close
I kind of like reading up on politics, I’ll watch Morning
Joe or a Hardball (US politcal televisions shows) that I
recorded. I certainly like my sports so I’ll catch a bunch
of Yankee games. I just got married so my wife and I
will make sure that we go and find a restaurant that
we haven’t gone to at least once a week. We’ll travel
we’re going to France in the fall, last year we went
to Italy. So whatever the things are that you enjoy you
want to spend time after work doing that because
what happens is you make too much of each trade.
If there aren’t things outside of your work that give
you gratitude, that bring you happiness you can find
yourself placing way too much importance on your
trading, on that one trade, and that’s not good, it’s not
healthy. It’s a performance sport and you’ve got to
keep it in perspective – it’s important but it’s not
everything.
Richard Chignell: Is that something you have
always done or is it something you have learnt
to do having been in the business a long time,
or were you always quite active in making sure
you had a holistic outside life alongside your
trading?
Mike Bellafiore:
Before I started SMB Capital and
I wrote about this in “One Good Trade“ I used to
actually close up shop after the close, then walk
across Central Park from the East Side to the West
Side and spend a couple of hours playing hoops
and then head home and get a little dinner
and then maybe watch a Yankees game. Then
brushing up on some charts and maybe talking
to some of my friends and then getting ready
for the next day. And then when I started SMB I
got away from that. It was 24/7. It took up every
bit of energy I could muster. It still takes up a
tremendous amount of effort but you know I have
recognised that there is only so much good work I am
going to get done during the day and if something
doesn’t get done today it doesn’t get done today. It’s
better for myself to do some of the things I want to get
done during the day, have a little bit of downtime for
myself, and then go about tackling the next day the
next day. So I definitely noticed when I started SMB
that I was spending too much time working and I was
starting to burn out a little bit and I had to get back
to doing some of the things that I enjoyed which I did
when I was just a trader.
Richard Chignell: With your role of obviously
having traders working for you is the importance
away from the screen and having other things
in their lives, maybe like shooting hoops, doing
yoga etc something you actively try to enforce
with them?
Mike Bellafiore:
Yeah. What we actually try to do
after the close is when one of our guys starts to be
profitable I start to work with that trader
one on one every day. So what they will do is they
will send me a daily review in our proprietary review
format of what they did well and what they didn’t
do well and I will ask them along the way to take the
temperature of their psychology and it will push them
along the way to building their strengths. But I will see,
and I have seen over the last couple of months, that
there are two guys on my desk who have been talking
a lot about doing things outside of work to improve
their work. And I have one guy on my desk who is
probably going to become one of our best really
terrific traders who gets very tired during the day. He
has to be careful about just putting too much into it.
So like the Miami Heat coach might take out Lebron
Mike Bellafiore
Mike is the author of the “trading classic” One Good Trade: Inside the Highly
Competitive World of Proprietary Trading (Wiley Trading) and co-founder of SMB
Capital, a proprietary trading firm in NYC. Mike is also the co-founder of SMBU,
an educational company that helps new and developing traders globally build
their trading foundation in all products, including systems trading, utilizing the
principles of elite performance. Bella’s blog offers new and developing traders
ideas on how to improve their trading. Mike will share the lessons the market has
taught him over the past fifteen years, wrapped inside of trading stories and his
own trades.
Mr. Bellafiore is a graduate of the University of Connecticut School of Law. He has
traded his own account professionally for more than 15 years.