So today during our AM meeting Steve highlighted MS as his stock of the day. Steve said, “I am going to look for a pullback right on the Open and then look for MS to trade in an uptrend for the day.” Now that is what I call a great call. On Friday Steve mentioned MS as a stock to watch. He remarked that MS might see 8 during the trading day. Yet another great call. Steve played MS on the short side on Friday and MS on the long side today. He made money shorting MS on Friday and long MS today. So did our Head Trader, GMan, taught by us.
I preach for our traders to be mentally agile. We preach for our traders to follow the intraday trend on almost all occasions. SMB teaches its new traders trading plays that allow them to make money short and long. When I was taught how to trade we did not watch CNBC during the day. We did not trade with charts. We had no breaking news feed. We were taught to watch the stock and determine its direction. Some of the most profitable traders on our desk could tell you Derek Jeter’s road batting average against right handed pitchers on AstroTurf during the day. If you asked them the P/E of EBay they probably would return a blank stare.
Now obviously times have changed. Charts, breaking news, CNBC on in the background is standard at most firms. But honestly if you shut down my charts, turned off CNBC, closed our breaking news feed I could still make plenty of money trading. I am a trader. If the stock was strong for the day I would chop it up. If the stock was weak my results would be similar. I don’t care where a stock is going for the day. A short on Friday of MS from 8 to 7.50 is the same as my long from 18.71 to 19.21 today.
The first thing new traders can do to improve their results is stop pretending they have a feel for where a stock may go. It will take at least three years before you will be able to develop a feel for where a stock may trade. Watch the stock and trade it. When its strong then get long. When its weak then get short. Your job is to make One Good Trade. Your job is not to make predictions. CNBC is not calling you up to make calls on the market or stocks. Leave your biases and opinions at the door when you step onto the trading floor. Our trading floor is for traders. It’s for those who can make money on either side. Its for traders who ask: How do I make money today?
