We are always instructing our traders on the setups that present the greatest risk/reward. If they are involved in these setups trading will be easy. If not they will struggle. I pointed out one such trade to our newest group of trainees. I was trading AAPL on the Open as it was very In Play due to Steve Jobs taking … Read More
Please Make This Trade–Especially SMB Traders
The past twelve months have been a complete roller coaster ride in the energy markets. We watched oil go from $50 to almost $150 and back below $50 again. In fact, the other day it was around $35 per barrel. On New Year’s Eve oil made a powerful up move on very high volume. There was some good money in … Read More
Why Trade Stocks in Play?
SMB Capital trades Stocks in Play. Our traders are taught how to find such stocks. And during our SMB AM Meeting we review the best Stocks in Play for a particular trading day. Over the past few years I’ve had quite a few conversations with interviewees, including “experienced traders”, about this core trading philosophy. Some don’t seem to grasp the … Read More
Trade With The Break
For the past few days the SPY’s were trading in a fairly tight and narrowing range. Traders were waiting for them to breakout from their narrowing range. Yesterday afternoon the sellers overwhelmed the buyers causing a break to the downside. The 89 support level was broken with force. In after hours action the SPY’s traded down an additional 2+ points. … Read More
Using Patterns to Turn the Tables…
Many traders become frustrated when a stock follows a pattern they deem to be illogical. Their frustration mounts when they take a loss do to this “irrational” pattern and they may actually trade against the pattern even after they have identified the correct way to trade the stock through rational observation. DE had a large gap down after releasing their … Read More
A Fundamentally Poor Trade
Never short a stock very close to an important support level. Let me explain. 88 is a very important support level for GS. Tuesday the stock leaked below 88. But it could not hold below 88. Later the stock rallied strongly. A few on our desk shorted GS when 88.30 held the offer. This is a fundamentally poor trade. Let’s … Read More
Weekend Preparation
The past few weekends, I’ve been coming into the office to prepare for the next week of trading. Generally I do this at home, but when I need to get a lot of work done, I’ll come into the office to do it. Since I feel like we’re at a turning point in the market, I’ve been doing some more … Read More
What is our Next Market Pattern?
As a trader I am like a WWII decoder. The market talks to us. It just does so in code. And often that code is challenging. But patterns always emerge such that we can understand the market and what she is saying. Yesterday after the announcement that the government would directly infuse cash into the big banks we sold off. … Read More