Liquid Snake, aka Sebastien Salois, is a former professional basketball player and financial security advisor who runs a Web site called LS Trades. Recently, he wrote a terrific review of The PlayBook, and we’ve pasted it here in full. We thought you might enjoy it.
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READ THIS BOOK.
In anything where there’s a huge demand and interest for knowledge, there’s going to be a lot of money to be made. Trading is no different. This is why it’s really important to decipher between the con artists and the genuine pros sharing their knowledge earned through years of experience. The latter is what The Playbook is about.
This book is the real deal.
Mike Bellafiore is a pro. Not only did he become a pro trader through his own personal grind, but he also has coached and developed many other pro traders via his world famous propriety trading firm in NYC, SMB Capital.
Let’s talk about this great book.
The Playbook is almost like a bible of trading. There are so much great info and insights shared in it, that it would be too long to list them all here, plus this would kind of ruin the fun of reading it for those who haven’t read it yet. So I will only talk about a few.
The first thing that struck me about the book is its concept. The entire book is about, as the title suggests, a playbook. This idea and concept changed the way I review my trades and how I write in my journal. It has also elevated the level of my work outside market hours.
A “Playbook” is a collection of your best trades. It archives the trade set ups that make the most sense to you. At SMB Capital, Mike makes all of his traders write down a Playbook play at the end of each trading session. He requires his traders to archive the set up that made the most sense to them during that day and to analyse and review it in detail in their journal. He says that the simple act of archiving the trades that made the most sense to his traders, increased everyone success rate in his firm. The goal of this exercise is to become, as he calls it, YBT (your best trader) and a CPT (constantly profitable trader).
The idea of archiving my best trade set ups made a lot of sense to me. Often we are programmed with sayings like “we have to learn from our mistakes”. Although this is true to a certain extent, I prefer to learn from my successes. Archiving and detailing all the components of a good trade helps internalize our understanding of a particular trade set up. This is basically brain programming on our ideal trades. The goal is to internalize mentally these set ups to a point where we recognize them immediately, trade them accordingly and with more size.
Mike, often throughout the book, puts the emphasis on the importance of screen time and reps. He says that it’s a must to spend as much time as possible in front of the market (screen time) and to trade as much as we can (reps). (This does not mean over-trading.) Trading is a skills that must be learned. There is no secret formula. Anyone who wants to make must put in the hours. And a good way to maximize our time and cut our leaning curve is to add more reps via a playbook. When you make a trade, that’s a rep. When you review that trade and archive it in your playbook, that’s another rep. Just think of the advantage you have over traders who do not do a playbook every day. With the same amount of trades, you are learning twice as fast. That’s the kind of edge I like and all it requires, is hard work.
Remember, trading is a competitive game. In case your are not aware of this, some of the smartest and the most competitive minds in the world are the ones who we compete against everyday. Trading is a zero sum game, if someone make money, someone else is losing. To not be the latter, we must put in the work. This brings us to the second thing that really struck me about this book:
Hard work!
SMB Capital traders work hard. I mean they really work hard. It’s part of their culture. They take pride in the fact that they outwork almost everyone in the game.
Personally, after reading this book, I have increase my work level. Not to say that I was not working hard before, but in a field where knowledge is often hidden like trading, it can be difficult to know where to direct the hard work. Thanks to this book, now I know. The hard work takes place after hours. To name a few, it takes place in the form of a playbook, in the form of journal entries about your mind set and psychology, in the form of constant self reflection and a never ending quest to improve via a journal and in the form of proper preparation.
Trading is mental game. You can have all the knowledge in the world about trading, but if you do not focus on the mental aspect, you are doomed. SMB traders know that and all trough this book, we find many insights about this topics. This is priceless.
Another gem of info found in this book, is the narrative of trade reviews they do as a group after hours. The book is full of real examples of playbook entries by SMB traders. So not only do we have examples of pro traders playbook plays, but we also get their complete breakdown of it as a group. This is such a valuable read. How often do you get a chance to peak inside a top notch proprietary trading firm? Personally, this was the first time for me. To be able to witness how pro traders think and what they focus on is also priceless.
If you want to make it in this game, it’s a must to know how the pros got there and stay profitable. This book gives you an inside look at how it’s done at the highest level.
This is a must read!
Related blog posts:
How to Tell if a Trading Book is Useful
Ten Things I Learned From a Professional Trader
You can be better tomorrow than you are today!
Mike Bellafiore
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