45. Lessons I Learned as a Bank Trader (and why I left)

In today’s episode, George speaks on some of the lessons that he learned during his time as trader for an international bank in Canada including why he ultimately left the gig to pursue independent trading and focus on TRADEPRO Academy! 

Here are the 9 lessons George learned from 7 years in the trading department at Scotiabank

1. The average person doesn’t know what a trader does (09:41) 

  • But assumes they make a ton of money
  • You only have your colleagues to relate with
  • And then your life is all about work and hanging with work friends

2. Rich people don’t always make money (12:15)

  • But they are better investors
  • Because they know business  
  • Dealt with a lot of high networth clients
  • The ones with the most money we heard from the least
  • The $1,000 accounts were daily calling in with fee waivers, etc

3  Retail investors have great ideas, and bad timing (16:19) 

  • They are the frontline consumer
  • They have the most touch points with end products
  • Yet they follow advice of people who advertise themselves as advisors
  • They allow emotions to destroy their otherwise profitable ideas

4  Most investors trade on news outlets (21:23)

  • Reports in media
  • We’d read them at desk and predict market flow
  • But in opposite direction

5. Professional trading doesn’t mean what you think it does (25:41)

  • You have to pre-clear your personal trades 
  • Plus blackout periods
  • You go to the back of the order queue
  • Compliance reviews your account statements and limits where you can open a brokerage account
  • Proprietary trading is different – you are trading bank capital
  • Dodd Frank eliminated most of that at banks
  • Few true prop firms left – most are just churning traders and banking on commission and desk fees

6. Trading is just a sales job (34:03)

  • Most bank traders clean customer flow
  • High networth clients get “trade ideas” from their advisors
  • Advisors read reports from the analyst desk
  • Advisors make money on commission, not your profi so they are incentivized to turn over the book

7. You are mostly a shrink for your clients (41:35)

  • You listen to their stories
  • Some are great
  • Most are bad and negative energy

8. Very few retail traders win 

  • The more trades and activity  (DARTS, which is how brokers make money)
  • The bigger the loses over the long term 

9. The technology and systems that enable you to trade are CRAZY (49:40)

  • Very sophisticated behind the scenes
  • It appears as hey “I bought apple”
  • But the inner workings are insane
  • It’s all about lowering commissions
  • Which in turn compresses revenue
  • And forces brokers to have to be on the edge of “doing what’s best for your client”

Why George left the bank (52:25) 

  • We weren’t helping clients win
  • We were helping them trade the wrong way and lose their savings
  • We didn’t work for YOU, we worked for the bottom line of the bank
  • It made me sick to witness it
  • And I had a passion to help and to build this industry up
  • I didn’t wanna just be a part of the system
  • I wanted to shape it and innovate
  • Hopefully I’ve delivered, and will continue to

How you can succeed as a retail trader: (55:10)

  1. Join a community – be a sponge
  2. Find a product that works for you
  3. Create a trading plan
  4. Test it on sim 
  5. Trade it live
  6. Review, adjust and adapt
  7. Stay in a trading community (or create your own)

Resources

 

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