Here is an exchange on our trading desk in NYC today. Trader: She got stopped out of her position today. It’s a shame because the market has pulled back in a bit. Me: You have to trade with stops. If you were stopped out and then thereafter a stock/product/market traded in your direction too often trader laments their bad luck. … Read More
Why this trader succeeded while most fail
Recently, I exchanged emails with a successful prop trader at a Tier 1 firm. I have known him since he was deciding whether to pursue trading, while still in college. We have kept in touch during his trading career. He has become a *very* successful trader. I asked him to share his thoughts on why he became successful. Here is … Read More
This Trader Wanted to Quit
Mike Bellafiore, noted author and founding partner of SMB Capital tells a story of an ambitious young trader that he met while giving a presentation at a university. This trader entered the professional trading world a few years later at just the wrong time. He was ready to throw in the towel — but he stuck it out for a … Read More
My trading is “garbage”
Hey Mike Couple of things….I’m reading my way through The PlayBook and felt I should send this GIF along…. Don’t know if I should laugh or cry at the garbage I trade. Again, my background over the years was to make $ trading the crap. its where I had an edge….. Obviously I no longer want to trade this way, … Read More
Trade Review: Buying SPY & IWM pull backs
Thursday March 10th was a day many traders had circled on their calendars. Often the greatest short term trading opportunities will occur on days where major economic news is announced. The monthly jobs number, quarterly GDP, FED rate decisions and ECB monetary policy fall into this category. Thursday the ECB was set to announce what steps it was planning to … Read More
Try automated stops
Dear Mike, Thank you for your insights in your 2 books. Given me great insight into the mentalities of the top traders and that too, of the failing trader. I’ve started learning to trade in the last year and admit that I am failing. Had gone through my journal, done backtesting on “my edge” and meditating and deep breathing during … Read More
Score one for the profit takers
Trader A stopped me in the hall to OK his large options put buying (bet to the downside). He has more exposure than his risk parameters allow. I ask the length of the trade. He replies, “maybe Monday.” I ask whether that makes sense for him. He thinks about it but responds the longer play is the trade. We agree … Read More
Game over
I was chatting with a veteran trading coach about a trader in drawdown. Is this drawdown part of her strategy or is she making it worse? Are you making things worse for your trading with your worst trades? Veteran Trading Coach: I actually love how she fights so much. She never wants to admit defeat in a trade until she … Read More