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Some issues in prop trading are the same as those faced in any niche, but some are unique to this ever-evolving segment. When I look at the structure, people and technology from 12 months ago, my company is almost unrecognizable.
Without the right mindset, maintaining growth control can be a bit like juggling chainsaws.
The central role of technology
Technology is the lifeblood of the business sector. By definition, our business exists only online. The rapid evolution of tools and platforms can dramatically alter the landscape overnight. We saw it firsthand.
Leaders in this industry must demonstrate an exceptional level of technological knowledge and forward-looking vision to predict and adapt to these changes. Adopting new technologies forces a culture of continuous learning and innovation within the team. There is no status quo!
Team members who are slow to pursue ongoing training, experiment with new tools, and dedicate time to strategic thinking don’t last long. The desire to adapt is necessary for growth and competitive advantage.
Related: Make money during a recession by learning stock trading strategies
Leverage diversity
The global nature of trading today means that teams contain a variety of cultural and professional backgrounds. Our current team is spread across five different countries. This diversity, while a tremendous asset, also presents unique leadership challenges.
Effective leaders must foster a cohesive team environment where every member feels valued and understood regardless of background and position. Solutions to reduce the “artificial isolation” that team members from other parts of the world may experience are essential. This involves using technology to facilitate communication across different time zones, promoting an inclusive culture and seeing it as a strength rather than a hindrance.
One example is occasional video conferences that are not company-specific. They give team members time to talk freely about their lives, creating a connection that business-only video calls don’t allow. You will be amazed at the personal details that have emerged from these calls. Everyone enjoys these moments. (And yes, everyone’s camera needs to be on!)
Invariably, we see innovation and closer collaboration as a positive outcome.
Balancing the dynamics of contractors and full-time employees
Prop trading is no different than every other business out there. Our team addresses the “contractors and full-time employees” issue. We all know companies that failed to handle the situation properly and paid dearly for it.
This mix can enrich the team with flexibility and specialized skills. However, it also requires careful management to ensure everyone is on the same page and consistently working towards the company’s goals.
During a growth phase, when some roles expand while others fade away, it is critical to constantly ask the question, “Is this best handled internally or will we outgrow this need in 6 months?”
Leaders must integrate these contributors, ensure clear communication and set clear expectations. Verbalizing clear expectations avoids many headaches. This problem mirrors the geographical challenge just mentioned. Promote an environment in which contracts feel like they have “entered” the corporate vision.
There’s another concept at play here. The “fire fast, hire slow” principle. I don’t mean this in a purely heartless sense. But being ready to make tough decisions is a spark of growth.
Ensuring that each member’s presence is not only guaranteed but beneficial to the collective goal. Again, this philosophy is not rooted in a lack of compassion but in a commitment to excellence and the long-term success of the team.
Uphold integrity as a core value
The temptation of quick profits in the prop industry can lead to ethical dilemmas with both customers and business entities. Integrity is non-negotiable.
Bad actors exist in every niche. Unfortunately, the prop trade is not immune to this. This makes it even more important that leaders adhere to the highest ethical standards themselves and instill these values in their teams.
This involves creating a culture where ethical behavior is recognized and rewarded, and where team members feel comfortable expressing concerns. Customer service sees different behavior from customers than the tech team on the backend.
Typically, every time cash changes hands or profits are at stake, someone creates a way around the rules. By prioritizing integrity, leaders build a team that not only achieves success, but also does so in a respectful and lawful manner. And in line with the company’s long-term vision.
Adapt team composition for future challenges
The skills and mindsets that contributed to early successes may not indicate future successes. Leaders must be vigilant in evaluating the team’s capabilities and ready to make adjustments as needed.
This might involve finding new talent with specific skills or redefining roles within the team to better align them with strategic goals. The same talent pool that earns a company $0 to $1 million in annual revenue is unlikely to be the one that exists at $10 to $50 million. Identifying “talent bottlenecks” is an acquired skill. But it is very necessary.
Related: Learn Candlestick Trading: This e-learning package is $25 this week only
The art of leading a trading team to success
Leading any team to success is an art that requires a combination of strategic foresight, technological expertise, and evolving interpersonal skills.
Short version: If I had to pick one trait that singles out someone who is likely to stick by your side through growth and challenges, I would probably go with a desire for continuous learning.
By embracing these principles, leaders can build resilient and adaptable teams, capable of sustained growth and even friendship. The journey is challenging, but I have found the benefits of cultivating a high-performing, ethically grounded team immeasurable.