Prop Traders: everyone still wants to be one. Dodd-Frank Act did not dissuade anyone; it just changed things. But the allure is still there.
But the question is how do we become a top prop trader? The secret lies in timeless advice that has been beaten into our heads, metaphorically speaking. We are always told, you get out what you put in. You reap what you sow, or some variation.
The thematic consistency being the more effort you put in, the more you will see. We have seen it with all the most significant traders we know whether they are so renown that they publish books, journals or are interviewed for various publications or media outlets.
Or they could be traders you know personally or meet during your day-to-days, perhaps during your daily commutes. Perhaps your CTI mentors come to mind! Whomever you ask, whatever literature you read one thing is clear: have a plan. Create a plan, stick to it, try it, and see what happens. This is the cornerstone of every trader’s psychology, especially prop traders.
In fact, prop traders will sometimes find themselves trying out several plans, and they will find that not all of them work out.
But they persevere, and frequently they will find a plan that works. This is very telling as many prop traders, especially back in the old days, and some now, they purely lived on their profit: if a prop trader were not profitable for a month, they would not eat! It makes you appreciate the psychological fortitude required to be a consistently profitable prop trader.
And one thing they will say, whether you look at those within large institutions (a lot of whom expect their prop traders to work for profit only, by the way) will state that when you put the effort in and find a strategy which is calibrated to your personality.
In fact, a member of the team (some of you probably can guess who) would cite a line that is quoted in CW’s “The Flash”, Captain Cold once said, “make the plan, execute the plan, expect the plan to go off the rails, throw away the plan”.
Apart from the comic relief, you can make this applicable to prop traders by amending this to:
“ Make the plan;  execute the plan;  expect the plan to go off the rails;  amend the plan, go back to step 4 until;  you find a that consistently works for you; and  stick to it”.
Lionel Lunam is a perfect illustration of what a prop trader would say proper thought and planning into a trading strategy involves.
Evidently, he had put real thought into his trading strategy and took the time to really understand it, test it and roll it out until he found the combination of tools and knowledge that works for him. By crafting a strategy and sticking to it religiously, he was able to make it through the funded trader program.
Below is our interview with Lionel and his experience with the CTI funded trader program which provides a rough simulation of what a prop trader, also known as a portfolio manager, would expect trading when given a funded trading account book from us: