How To Become A Successful Prop Trader or Emerging CTA – Part 1

If you are self-taught and are want to become a professional trader – either Prop Trader or CTA – you have your work cut out for you. You are unknown and will stay that way unless you go out of your way to change that. You are at a distinct disadvantage to those who’ve been trained at a big firm and have colleagues and relationships they can tap.

That said, the trading world loves a guy coming out of left field with a new slant on things, so don’t be discouraged – you just have to want it more. Also to consider, many folks with a pedigree lack ambition – their character is not fully developed yet b/c they haven’t had to struggle to much.

Most traders are great on the quant side, but they are horrible at marketing – and marketing is how you’re going to get noticed. The good news is that I’ve been there and if you follow the steps below, you will go a long way towards getting noticed, getting an allocation, and saving an enormous amount of time in the process.

Get a professional Head Shot

Pay the money to have it done. Don’t take the best one off of your Facebook page b/c you know how to right-click your mouse or do a Command-Shift-4 screen grab. You will use it for years and the ROR on it will pay for itself.

You can use hypothetical results from your backtesting to market, but you’re better off having at least 3 months of actual trading

Two years ago, I knew of guys raising a few million from allocators based upon their hypotheticals. This is not the market for it right now, however, so IMHO you’ll do much better with at least 3 months of actual trading performance. As long as your drawdowns in within model, that’s ok. You’re not going to get an allocation on the first meeting anyhow – you just looking to get on the allocators’ respective radar screens.

Most importantly, you want their permission for you to send them your month-end numbers. You will do this via email to someone named Britney who is most likely an assistant. Don’t take it personally, and whatever you do, always be very generous with your Thank You’s and Please’s. Be prepared to send data for MONTHS…

You need to get followed like in Social media

There are a few online places that you can upload your data and c.v. to. Online places like AutumnGold and IASG are 2 good places to start. Once you’ve got those covered, look into Altegris Investments in La Jolla, CA.

Biographical Information

You’ll want to have a short bio that gives anyone reading it the meat and potatoes of who you are. IMHO, Less is more. If your bio is 5 pages, it’s a bore and you look full of yourself. In the trading wold, your P&L is your credential – end of story. No one cares how smart you are, especially when you’re starting out. Keep it brief and full of talking points only.

Side Note: If you have one of those moments in life that you’d rather not remember never mind talk about, here’s how to handle it…

Don’t put it in your written bio. During the in-person or phone interview, you’ll sense that there will be an appropriate time to tell who you are speaking with. Most allocators WILL do a full background check, so if you have something to say, you’re 1,000 x better off telling them in person before they see it on some sterile report.

Outcome: If nothing else, you will garner a lot of trust by looking the person in the eye and telling them the story. Everyone knows that it will be hard to do and you score big points for bringing it up and being honest on the onset of the relationship.

Don’t be a cliche

Don’t say you’re the next Bud Fox or whatever or deploy overused quotes from movies or popular culture. You’ll look like a jackass. Be yourself and speak your own strengths – whatever they might be. If you are lucky enough to get an allocation, it will be for everything you bring to the table, and CLARITY of what you CANNOT do. Knowing both is an absolute strength.

In other words, you will be joining a stable of very talented traders who’s collective abilities will play off one another in a portfolio. If you feel like a jerk writing these things about yourself, ask a good friend for 3-5 things that they admire in you, especially about your character.

I’ll have Part 2 for you in the next few days.

I am not affiliated with any of the firms mentioned here.

Please note: I reserve the right to delete comments that are offensive or off-topic.