Today I saw strong evidence that the recent market rally has come to an end. Today was the 28th trading day since the Reversal Day which established the five week run we have seen in the market. I like to jokingly refer to the rally as the “Obama rally” as the constant bashing of Obama on CNBC seemed to coincide … Read More
Attention All RIMM Traders!
I love trading RIMM. Not because it was my most profitable stock in 2008. Well maybe partly. I love trading RIMM because it is one of those few stocks that all the major players on Wall Street trade. Hedge funds flock to RIMM when the market is moving. As do mutual fund managers, professional traders, and retail brokers. With so … Read More
The Opening Drive
Here is a setup to help you during earnings season: A stock gaps up or down on earnings and drives strongly in one direction during the first few minutes of the Open. This stock should be In Play for the rest of the day. The large supply/demand imbalance that is indicated during those first few minutes should create a bunch of great … Read More
The Right Approach
New traders at SMB have a very structured environment when they start their trading careers. During their first five weeks every minute of each day is planned. When they begin trading live in week six they are assigned a mentor who will review their work on a daily basis. They begin by trading 100 shares at a time. Their ability … Read More
Psychology Drives Price
RIMM reported after the close today. It traded up over 20% from its closing price. You are going to read a lot of articles about how they “blew away” expectations and gave great guidance. The articles will assign these as the reasons for RIMM’s explosive up move after the market closed. Really? I don’t think so. Do you believe that … Read More
Hard Work Pays Off
We asked about 8-10 of our core traders to work on their skill development during the past two months. These are guys who had been trading live anywhere from 8 to 16 months. They had all previously demonstrated a high level of profitability. But the market environment changed and they had to adapt. They had developed some bad habits because … Read More
Don’t Fight the Tide
Part of my job as a partner at SMB is keeping an eye on what other traders on our desk are trading. I have a third monitor that is used primarily for this purpose. I find it kind of amusing when a new trader asks for a third monitor. Why would they need a third monitor? So they can spend … Read More
A Traders’ Market
We spend a lot of time on our prop desk focusing on skill development. Trading intraday requires a certain set of skills that take some time to acquire. If you are given good training and work very hard you will develop a set of skills in 6 to 12 months that will allow you to make money in all market … Read More