One of the greatest hurdles a new trader faces is that of consistency. Consistency on SMB’s desk is defined as being profitable a minimum of 80 percent of the trading days each month. The majority of our desk achieved this level of consistency in the month of August. This was mainly a result of the opportunities in the leveraged financial … Read More
Should I be Short or Long?
If a stock has fresh news prior to the market Open it may gap up/down a large amount from the previous day’s closing price. My first instinct as a trader is to be long stocks that gap up on news and short stocks that gap down on news. My experience tells me that the majority of the time there is … Read More
Anticipating The Change
In September and October of 2008 the young traders on our desk put up ridiculous numbers. Their aggressive instincts were rewarded by the unusual level of volatility. But then their aggressive instincts were severely punished in the months that followed. They were slow to adapt to changing market conditions. By December of 2008 it no longer made sense to make … Read More
Our Approach Makes the Most Sense (Really)
When I began trading in 1996 we identified the stocks we were going to trade from something called the “ticker”. This window that appeared on our trading platform identified stocks that were moving. We were taught to get long stocks that were going up and short stocks that were going down. We were momentum traders with state of the art … Read More
Fool Me Once Shame on Me Fool Me Twice…
After yesterday’s selloff we had a small overnight gap to the upside and we were watching the Open to see whether to trade the market from the long or short side. As usual FAS was on the radar of several of our traders. There was some initial selling pressure in the financial sector but fairly quickly it began to show … Read More
Two Young Guns
I have spent some time the past two days talking to one of our better young traders about an issue with which he has struggled. Dove Bar, as I like to call him, is trying to figure out the best way to trade after the Open. Usually he crushes the market in the first 15-30 minutes. The majority of the … Read More
Ban Day Trading Part I
I began my professional career as a “day trader” a little over thirteen years ago. Little did I know at the time that I would one day become a strong advocate for banning myself from the market. The Institutional Day Trader First, let me offer a little bit of background information regarding “day trading” before I explain why it, other … Read More
A Trader’s Mentality
I spent seven years with the firm where I began my trading career. Little did I know it at the time but I was surrounded by an unusually high number of very talented traders. One of the traits that they shared was an attitude that they would take out from the market as much money as they possibly could every … Read More