The Advantage of Trading Rooms

Trading rooms used to be brick and mortar only... not anymore

Trading rooms used to be brick and mortar only, like the old SAC trading floor… not anymore…

The Chi Town Experience

A couple of years ago I was invited to Chicago to trade live with a veteran trader friend of mine who was visiting from Switzerland and another relatively new proprietary trader (he had many years of experience as a floor trader). The idea was we would get together in a single room, trade our own accounts and see what happened.

It was amazing.

There were only three of us, but being in a room with other traders engaged in the same activity was reaffirming, encouraging and, for lack of a better word, fun. We were each trading different securities, in our own accounts, and in our own individual ways, but the power of a group dynamic was present nonetheless. We didn’t share ideas and strategies per se (we talked generally about our strategies), but there was plenty of “Hey did you see…” While that was helpful, the more important contribution was being around other traders. Being quite fond of my own company, I never knew how additive it could be to be in a room trading with other traders. A big part of the allure of private trading for me was the opportunity to work alone. I was wrong… partially anyway.

I Trade Therefore I Am

At the risk of assuming the mantle of one learned in Existentialism (I am not), I know enough to know that there is something to be said for the collective power of a group. Teams of all sorts develop personalities that are different from the individual personalities of any of its members (even if influenced by the strongest individual personality). Similarly, people with shared macro goals tend to excel in environments where there are others working in the same direction. A perfect example is the Startup Incubator. At any one time, there might be 10 or 20 different startups at different stages in a single incubator. The individual companies are often working toward breaking into vastly different industries (and in some cases giving birth to industries), but the shared sense of creation and entrepreneurialism help propel each of the individual teams forward.

Trading Room Training Grounds

Trading rooms are much the same in that trading rooms provide an ongoing incubator of sorts to proprietary traders. Each trader trades in her own way, but benefits from the collective experience, energy and camaraderie of the trading room. Historically, these types of trading rooms were brick and mortar and incredibly hard to find, much less obtain a seat in.  New traders are brought in (these rooms still exist) and given a chance to learn at the feet of an experienced trader.

The advent of online trading rooms changed (democratized) all that.  Online trading rooms have the added benefit of allowing traders most of the advantages of traditional trading rooms, but enjoyed from the comfort of their own homes… or from wherever they choose to work…

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or here

Mountain View


Like old school proprietary trading shops, the best rooms provide good trade ideas for new traders (noobie or noob) while they gain experience allowing them to “earn while they learn.”  The noob is then able to take his time learning and developing his own methodology without the added urgency and pressure of needing to make money from that method immediately.  The best new traders are able to take tiny accounts and grow them to enormous levels…