Make Trading Changes Like Coach K to Prosper in 2015

As we approach the end of the year this is an excellent time to consider trading changes. Call it your New Year’s Trading Resolutions. Actually the now is always a good time to consider changes to your trading but that is a whole separate discussion. Let’s just follow the trend and encourage the presently motivated to make trading changes.

One of our great college basketball coaches, if not our best, has. Coach K used to place an emphasis on recruiting 4-year players. This year his team stars one-and-done freshmen and sits at #2 in the college basketball polls. Some say this is his best team ever. How quickly people forget Hurley, Hill, Laettner, T. Hill. But again that is another conversation. Coach K has made changes in his coaching to compete in this new order of college coaching (see Kentucky and Coach Cal).

Here is a passage from a recent article highlighting Coach K’s changes:

It’s remarkable, then, given Coach K’s longevity, that he is not locked into a certain way of working. The aforementioned 2009-2010 title team, his fourth, had three seniors and two juniors playing nearly all of the minutes. This season, Okafor and fellow freshmen Justise Winslow and Tyus Jones are all among Krzyzewski’s minutes-played leaders.

Dr. Steenbarger (perhaps the Coach K of trading coaches) wrote an important piece about the necessity of making changes in our trading for superior performance. He starts:

I generally find that traditional ways of viewing traditional market indicators and charts are not the most informative.

Change your charts. Change your indicators. Change your trading tools, challenges Dr. Steenbarger.

Some of the biggest advances at our prop firm’s Austin floor were made by traders changing seats. Sitting around other traders and their different approaches to trading propelled them to higher levels. Change your trading vista.

Traders on our desk continue to be more bionic, developing custom filters to signal trades with edge. And sitting in their seats after hours back-testing automated strategies. They seek to be bionic discretionary quant traders instead of formerly singularly discretionary traders.

I wrote in One Good Trade that I have changed my trading style many times as markets have changed.

In a recent webinar, I shared how we do not teach traders to trade how we did when we started SMB in 2005. In fact, we explicitly discourage them to trade like that. It’s not that in the past that strategy didn’t have edge, it’s that it’s too hard to trade that strategy in this market with the introduction and then increase of HFTs. We substantially changed our teaching approach.

There is a whole big changing opportunistic world out there. What changes will you make this year with your trading to prosper in it?

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 Trade and The PlayBook. He welcomes your trading questions at [email protected].