Mike,
I’ve recently been in touch with SMBU regarding the SMB Foundation/Trader Development program and will be starting, military hours permitting, in the next couple months. I read your book (One Good Trade) and listened to any videos/interviews I could get my hands on that had SMB Capital in it and, and after taking your advice from your book, I began to more actively listen. In doing so, I came across one video in particular in which I could hear you loud and clear. “Two books were pivotal in helping us mold a lot of our training programs, methodology, and paradigms: Talent Is Overrated and Outliers”. Those weren’t the exact words you were using but it was as though you were shouting out to me, “You must read these two books”. You mentioned others in your book, such as Brian Shannon’s Technical Analysis, etc., but I chose to go with Talent Is Overrated first, which brings me to the point of this email.
As a father of four and an aspiring full-time day trader I wanted to say thank you, for this is now one of the most important books in my library as a father, husband, and trader. I should probably cut to the chase before the email gets to be too long. So with that, in what ways can I build my mental model of day trading and what sorts of practices have you found to be the most beneficial for deliberate practice? I know you mentioned something like a “project x”, which I’m assuming is some type of interactive recording of the markets that allows the beginner or even experienced trader to have access to not only Level 1 and 2 data but some sort of Level 3 data (real time volume and net change, etc.) to where they can replay the markets and “cheat” the natural order of day trading by gaining hours and hours of experience in a single coaching session? Anyway, I cannot sleep nor can I focus at work because all I think about is that I have figured out the “secret” to becoming a professional day trader and success in this venture, assuming all other things being equal, is within my grasp.
I’ve been trading for over two years, when my time has permitted, and already have access to a couple of trading programs/platforms that I will be working on building to help develop a mental model of the markets with. However, I acknowledge that I am a novice and do not want to be misguided by my own inexperience in developing deliberate practice methods. Do you have any suggestions or guidance on the matter? As I said before, thank you for being the catalyst I needed and reminding me of how important active and deliberate listening can be. It’s changed everything.
@MikeBellafiore
Thxs for reaching out to me. You made my day! I am grateful you found One Good Trade so inspiring. More importantly, you have done a terrific job understanding our culture of deliberate practice to improve your game.
At SMB we are constantly tweaking our training to help our traders improve. Since One Good Trade we have asked our traders to archive a trade that made the most sense to them each trading session and to enter them in what we call The PlayBook. As it happens, I discuss how to build your playbook of the best trades for you in my next book, which is called The PlayBook. Too many traders lack a specific methodology for their trading, which leads to taking too many trades in an unorganized, unstudied hodgepodge of trading intuition. This breeds inconsistent results and a trader who is not scalable. A trader who is not scalable is a trader of little value to a prop firm. But much more about that in The PlayBook.
Before you close your trading day, archive a setup that made the most sense to you from the previous trading day. Talk to a like-minded trader about the trade. Determine if the trade is an A+, B, or feeler trade. Set a risk amount you would allocate for this trade going forward. Pay special attention to where you could have gotten bigger in this trade, why, and how.
Keep rehearsing your trading game!
You can be better tomorrow than you are today!
Mike Bellafiore
