I have been a big fan of SMB Capital and Mike Bellafiore for several years after watching them on Wall Street Warriors and then following their trading blog, twitter account, and ultimately their shows on Stocktwits TV. I have always admired how well they are run as a prop firm and the dedication they show towards enabling the success of their traders versus the approach of other firms who are more concerned with generating their cut of commissions and simply recruiting more bodies once their traders fail. They are consummate professionals and actually quite innovative in how they have introduced tools like film review and simulators into the prop trading world.
Beyond the obvious success as a firm, they are also one of only a handful to provide outsiders a glimpse into the prop trading world which has remained foreign to the vast majority of retail traders. I had been eagerly awaiting Mike's book "One Good Trade: Inside the Highly Competitive World of Proprietary Trading" since he announced it, and finally had the pleasure of reading it recently.
Mike starts by bringing us into his desk to meet some of his superstar traders. In profiling several individuals, he shows us the common traits they have and more importantly, how each trader became successful by adapting their trading to fit their personality. Later on, Mike reveals several traders who for some reason or another were unable to make it as traders. Most books only focus on traders who have made it, or the techniques the author believes will make a trader successful. However, this is the first book I remember that walks through real life examples of the traits that will inevitably lead to a trader's failure.
Some people may be disappointed in what they would see as a lack of an "A to Z" trading system revealed in the book, but the most important factors for a traders success are clearly laid out in the book. While Mike discusses some of the techniques they use to trade, the clear message of the book is how important it is to work hard to develop specific trading skills which can later be used to help a trader adapt to any market. The idea of developing specific skills is an interesting concept, and one more commonly seen in the sports world. The title of the book is One Good Trade, and you get to one good trade by developing specific, repeatable trading skills.
It also wouldn't be practical to attempt to cover all the material it takes months to cover in a class, and then years to refine, into a book. However, this isn't to say that nothing is revealed. The book does reveal many of the specific setups SMB uses on a daily basis to make money in the market, and highlights how important it is to trade "stocks in play" and rely on tape reading skills. In fact, if you combine everything in the book, along with the several blogs and video shows, a trader would have a very good idea of how SMB trades on a daily basis.
The idea of sitting on a desk with so many other traders who are just as committed to the markets as you are is incredibly enticing, and this book provides much insight into this environment. While Prop trading is definitely not for everyone, the approach laid out in this book is the basic groundwork for any successful trading methodology. Beyond this, there is much to glean from a trader who has adapted to several markets over the years and not only survived, but improved along the way. I highly recommend this book as an addition to any traders Library.
Joey
