Good afternoon. I hope this email finds you well. I have spent many hours over the past few weeks reviewing your YouTube videos, blog posts and anything else that I can get my hands on that offers a glimpse into how your trading desk makes money. I’m about 2/3 of the way through your book One Good Trade

I have been trading on a demo for the past few days and today everything I have read lined up on a particular stock and I wanted to share it with you. I was doing my morning routine of checking In Play stocks, reviewing the news and checking important levels.

One stock in particular jumped out at me and the reason was because it met the criteria that you constantly speak about in your literature. The stock was DSW. It was gapping up on earnings related news and based on premarket action it was going to open around a major resistance level of 32.25ish. I kept a keen eye on the premarket trading and watched as it established levels. It opened right around the resistance level and it couldn’t break higher. The tape showed that whenever it traded at these level it sold off. I established a short position just below this level and added as it broke. I was able to ride a quick and easy move of slightly over $1. The price that I would have had to hit out was risking about 30 cents but I was able to reduce that risk by watching how it was trading and getting in at good prices.

It was so surreal that after all the studying I was able to see a real-time example of One Good trade.

Thank you for putting a great deal of valuable information out in many forms for those of us who would like to reduce the cost and time of the learning curve.

@MikeBellafiore

At 11AM EST we hold a Trader Development review session with our newest traders and broadcast this to our virtual Trader Development students.

We teach them One Trade at the start: The Fundamentals Trend Trade.  This trade does have subsets so there are really 6 trades within this one trade.  But we want our students focused on this one setup.  We want their learning experience to be intense with this one setup.  We discuss in detail the setup each morning.  This is just one session of such instruction and review.  Our traders and students review these trades after each close with a detailed trade review and PlayBook Trade.  When they show proficiency in One Trade then and only then will we move to the next

New traders often jump around from trade to trade never bringing the intensity, study and time to master one.

We have never done this before on our blog until today.  Below is an audio recording of our Trader Development session regarding the very stock our SMB Reader wrote to us about- DSW.

Notice:

• Why we traded the stock
• Where we see entries and exits
• Why we would enter and exit here
• The thought process for our trades
• The critical feedback given to traders

This will give you an inside look at how we attack teaching a first setup to our new traders.

*Spencer is going to be pissed that I am releasing this to he public.  In my opinion, it takes sitting in on multiple review sessions like the below to really learn, internalize and master this trade.

“You can be better tomorrow than you are today!”

Mike Bellafiore is the Co-Founder of SMB Capital and SMBU, which provides trading education in stocks, options, forex and futures. Bella is the author of One Good Tradeand The PlayBook. He welcomes your trading questions at [email protected].

no relevant positions