In this video learn how a professional trader meticulously reviews his trading results. Our firm trader trader shares his process for reviewing his trading so he can improve his trading PnL.
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in this video learn how a professional
trader meticulously reviews his trading
results hi I’m Mike bellafiore
co-founder of SMB capital and we’re a
proprietary trading firm located in
midtown Manhattan and I’m also the
author of a trading classic one good
trade and the PlayBook in this video a
proprietary trader from our firm shares
his process for reviewing his trading so
he can improve his trading PnL be
professional
[Music]
all right so today I’m gonna go over and
talk about how we tag and review our
trades on trade review sure a lot of you
developing traders in the room know most
of this what hopefully you can find some
hidden gems and I know a lot of retail
traders at home have some questions
about this so after you import your
trades into trade review you’re gonna
come to the trades page and it’s gonna
look something like this and then the
first thing you want to do is put the
date in for the trades that you imported
that day so for this day on December 3rd
I had two trades one in LK and one in
Cisco so after this I go ahead and I hit
detailed let me ask you this sure how do
you import your trades so on the main
page you’re gonna see a tab it’s gonna
say import trades you go into there and
it’s gonna have all different kinds of
platforms that you choose from and then
whatever platform you’re trading from
it’ll tell you how to import them so
this is what the detailed page is gonna
look like and it’s gonna allow you to
add some tags add some notes and edit
and put in a risk amount so I usually
for big winners big losers decent-sized
winners decent-sized losers I’ll put
some notes just so when I go back I do
my weekly review and I review at the end
of the month I know exactly what this
trade was they don’t have to think about
it and say oh like what was I doing that
day in that stock so for this one I just
wrote this morning futures we’re falling
just give a big picture idea on track
for the first rate decline laughter
Trump reported that it might be better
to wait until after the twenty election
to reach at a trade deal with China I’ve
been stalking the Cisco higher timeframe
breakout ever since it gapped down and
began consolidating after the earnings
release forty-four seven has been
supported multiple times this trade I’ve
made many times I risk 20% of my stop on
the set up and I think I should risk
thirty to forty considering and marking
conditions to stay and how familiar I am
with
so just a couple sentences there I’m
what the trade was and then I go ahead
and click on edit tags add tags and now
I’d like to start with a general tag to
categorize the type of trade so if it
was a low flow type a low flow second
day IPO changing fundamentals breaking
news trade so in this case I tagged
higher timeframe technical and now I
have hundreds if not thousands of this
tag and it’s just a general vague tag
this way when you look back at your
trades you just have a few main
categories that have a large tag count
anything surprise you after you started
tagging your trades about particular
trades that you trade really well and
maybe you didn’t think you did or some
trade you trade very poorly that you
didn’t think you did yeah absolutely and
that’s and that’s the good thing about
just putting one very vague general tag
so I recently found out that one of my
worst trades is a second day play and it
has a large tag count so it means I’ve
taken it many times
sample set is very good and that tells
me that well the sample set is very big
and that tells me that I shouldn’t be
taking that trade anymore so then you
could go ahead and add some additional
tags and I like to call these
subcategories or subgenres and here I
get more specific about the intraday set
up and the important thing here is
consistency you want to be consistent
with these what these sub tags sub
categories here so I know like I know a
lot of traders you know not so much here
but a lot of traders like to come up
with these fancy names for their for
their trades and that’s fine as long as
you’re consistent with that tag if you
want to learn three real world setups
that our traders use including the
simple setup that we teach all of our
new traders and the set up that turned
one of our traders into a seven-figure
big money earner check out the free
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just go ahead and click the link that
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corner of your screen that’s gonna open
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gonna lose this video you’re gonna learn
more in a couple of hours from this
trading workshop than from years of
online education for here I tagged gap
and go and breakdown you know if you’re
not consistent with your with your sub
tags you’re just gonna have a whole
bunch of tags and you’re not going to be
able to really drill down into the
specifics of the setups follow up so you
have a bunch of data you don’t trade
second day plays that well how do you
know to stop trading second day plays
versus thinking about how to trade them
better or perhaps narrow which second
day plays you actually take yeah so your
results are better yeah that’s a good
point
so um I’ve been taking second day trades
for about a year now
and I’ve tried to work on them and I’ve
tried all different things and I found
out that through through trying
different trades and methods on the
second day I just found out that it’s
better for me to continue to track the
stock so normally we’re trading second
day plays after a stock gaps up or has
news and I’ve just been finding out for
me that it’s easier to watch it for a
couple days because usually it needs
time to accept the price it’s at
consolidate and usually I’m making a
trade a couple days later like I’m
making a trade after we find out that it
can’t hold up at the price it’s at or
making a trade that you know it breaks
out of resistance after it’s held up for
four or five days and you also see on
this page it shows all your specific
orders here and I’ve blurred out the
piano in the quantity there um if you
scroll down on this page you’ll see
different charts and you could edit them
so I have a daily a 5-minute and a
two-minute and it shows your executions
here so you see the red dots on the
shorts the greens are the covers
and you could edit them to different
timeframes you see that drop-down menu
here and if you hit this wheel you can
add view app or any indicator that you
might use so now I’m going to talk about
how I review my tags so this is the main
page on trader view and we’re lucky
enough to have an SMB Performance Center
but your main page will look very
similar and it’ll have all these main
categories up here so I’m going to go
ahead and click reports and now it just
takes me to this page where it shows my
gross P&L; for the past 90 days and you
can see this filter up here symbols tags
side long short duration entry date
start and date and if you filter it that
way so right now there’s nothing in the
filter and it’s just showing my P
curve for the past 90 days so go ahead
and I click on tag breakdown so I go
ahead and I just put in July first
up until now which was December 3rd so I
just got a big array of different trades
and then I go ahead and I filter it by
the count so it’s gonna show me whatever
tags I’ve used the most so you kind of
see all my main categories here hired
timeframe technical changing
fundamentals second day IPO imbalances
breaking news breakdowns market trades
breakout trades and then I go ahead and
click on IPO because I want to review
all my IPO traits from July 1st so I go
ahead and now I could just see a list of
all the trades with the tagged IPO so
now I can notice that I have IPO and the
filter here and the date range and I can
sort them by date symbol volume
executions P&L; in this case I sort them
by P&L; I want to see what my best IPO
trade was since July 1st and I hit a hit
reports here
now when I hear reports gives us the
overview trade page but with the tag IPO
mmm so that’s my P&L; curve for all the
IPO tags that I’ve traded since July 1st
how you doing on that Oh looks like I’m
doing pretty well so I go ahead and I
hit detailed no it’s really nice is it’s
gonna give me this kind of report card
here with all these different stats it’s
gonna show me total gain loss on that
tag average daily gain average daily
volume average winning trade losing
trade I’m gonna give you a cup of really
detailed things like Kelly percentage
total number of trades and you could
pause this and read them over delicious
goes on you know I kind of find that
average winning and losing trade and
percentage of winners and losers just
find that the most helpful and why is
that it kind of just gives you on a
broad idea of how you’re doing just a
general idea of how that trade is
another good one is max favorable
excursion and Max adverse excursion so
from your entry point how far do you
normally let this trade go against you
and it’ll give it dollar amount for
adverse and will give a dollar amount
for a favorable excursion so favorable
from your entry pouring what’s the
average amount of Pinot that you know
you gain from your entry so then you
could dig a little deeper you have tabs
for days and times price and volume
instrument market behavior win-loss
expectation which is just going to show
your overall P&L; curve and we’ll get to
that a little bit later so in this case
I click on instrument and shows my
performance by symbol so you got top 20
bottom 20 and in this case I just want
to check out smiled our red club because
it seems like that is my biggest one by
far so I click on this bar here and it
brings me to that trades page again so
it’s going to show me all my smile
direct Club trades with the tag
IPO from July first now I filtered this
by PNL and I just want to check out my
biggest trade my best trade and smiled
by red Club was that on day one no this
was a this was a couple of weeks later
two weeks later I believe so I go ahead
and I click on that I see some notes
here just to remind myself what it was
about so failed bounced off hired
timeframe support lock-up expired this
day I don’t list came out with
initiations it popped and then traded
back below 1313 very significant
inflection stop should not have been
back below thirteen best recent IPO
breakdown to date so now the trade is
fresh in my mind I remember exactly what
it was and I look at my tags here so
recent IPO new strategy it’s also good
to tag like if you’re trading a new
strategy kind of follow that and tag
your trades IPO higher timeframe
technical breakdown okay I remember
specifically that this was an intraday
breakdown from that thirteen price level
and again you can see your chart you can
see your executions below and now I want
to look up that subcategory I want to
look up recent IPO and breakdown so I go
ahead and I put in in my filter here my
tag filter recent IPO space capital A
and D space and the tag breakdown now
it’s going to show me all my recent IPO
breakdowns all the trades there and I go
to the overview page see my P&L; curve
for that gross daily P no daily volume
win percentage and then you know digging
into this tag recent IPO and breakdown
you could go to the detailed page see
all the stats for that very specific set
up so what does that tell you about
those trades right there well it’s got a
50% win rate I blocked out the P&L; here
but the winning trade was about
quadruple the amount of the losing trade
so this tells me that you know it’s not
a setup that comes around often but it
has a 50% win rate and my average winner
is a lot bigger than my average loser so
it’s a rare setup that when I see it I
should be taking it with big size so
that’s going to give you information to
push your risk on that particular trade
that you need to push your risk on that
trade right yeah and we could also find
out here that average whole time winning
trade is 5 hours average whole time
losing trade is about an hour so on
average of these 12 trades I’m holding
it for about I’m holding the winners for
about 5 hours now you know that this
trade is usually trade to hold so on
these tabs here I select days and time
so on days and times I could see that
well this trade comes right off the open
sometimes so you know almost well every
time so in 9:30 and at 10:00 a.m.
and even in the pre market is when I
take this trade so you know to look for
this type of trade if you’re looking for
it’s probably gonna happen right off the
open or maybe even in pre market have
you thought about building nah I made a
model for this yeah it’s definitely
possible I actually I actually think
unfortunately that this type of trade is
starting to phase out because all the
IPOs were breaking down because of the
we work hype and how how much of a
failure that was and these companies
that weren’t making money yet we’re kind
of falling on that catalyst I feel like
we’re starting to move away from that
but it’s definitely still something I
look for in stock and I could probably
make a filter or even an automated model
and then from there I could look at my
win-loss expectation in this very
specific trade and you can see the P
curve from the first time I took the
trade up until now and you see that the
P&L; curve is straight up and now you
know like okay well for this very
specific set up my stats tell me that
when it comes around I need to
trade a big and put on a lot of risk and
that’s how I review my my trades on
trader view do you tag your failed my
peel setups to go back and see why they
yeah well every every IPO trade that’s a
breakdown is gonna get tagged so this is
including the losers yeah you know if I
didn’t hit show me the ones with my top
you know there would be some losers here
and I can you know go back and review
the losers same way I reviewed the
deliver wares so your stats when you
look at your stats what’s the best types
of setups for you and does that tell you
something about the trading niche that
you should focus on well a higher
timeframe technical blaze with the
catalysts are the best for me so that
tells me usually you’re watching a stock
at a higher time for you time and
usually it needs some type of catalyst
to really push it through for the trade
to work so that kind of tells me that I
need to be very selective with what kind
of trades I’m taking and I need to be
stalking my trades as well tells me also
I want to make sure that I redouble my
efforts have a really good team a really
good routine for ripping through charts
at night so that I don’t miss any of
these breakouts or breakdowns yeah
absolutely and something I do is on my
platform I keep a list of all the stocks
that I’ve been trading that month I mean
there’s not much going on or in the
afternoon when it’s low I cycle through
them it’s a part of my process so now
it’s your turn are you going to tag your
trades and measure your trading results
if you’re already doing so what trades
do you trade best let us know by leaving
a comment below right now
* no relevant positions
