In this video, learn how to become a consistently profitable trader like you deserve to be. Mike Bellafiore shares in detail the path our traders take to become consistently profitable and then star traders.
View Video Transcriptin this video learn how to become a
consistently profitable trader like you
deserve to be hi I’m Mike bellafiore
co-founder of SME capital and we’re a
proprietary trading firm located in
midtown Manhattan and I’m also the
author of the trading classic one good
trade and the playbook click our
subscribe button so you don’t miss any
of the videos they’re producing for you
in the trading community in this video I
share in detail the path our traders
take to become consistently profitable
and then star traders we’re sitting in
our trading room in New York City our
floor managers there our trading coach
dr. Steve augers they’re um they’re team
leader for the particular team is
they’re the senior trader and his junior
traders on his team are also there we
meet monthly to over the progress of all
the traders on each team one particular
team is set to go over their month so
the senior trader goes and he talks
about his month and he is killing it
he’s crushing it having a grade had a
great month and doing as well as he’s
done in a really long period of time
the next trader goes junior trader on
his team doing really well taking that
next step forward in his progress next
trader goes also doing really well
trading particularly well finding things
that he really likes to trade so I’m
sitting there listening to all this and
this all captures my attention because
it’s unusual for everybody across the
board to be doing this well and so I
asked why are you guys all doing so well
senior trader chimes in
well it’s the market there’s tremendous
amount of opportunity that’s why we’re
killing it another junior trader steps
forward and says well you know I’m doing
so well because I stopped doing all the
stupid stuff and once I stopped doing
all the stupid stuff I really started to
trade better another trader steps
forward and says I think we’re really
doing a great job together collectively
as a team sharing information dr.
Steinberg are in the room hearing all of
this who is the very best trading coach
in the u.s. says there’s an old saying
in Kentucky you’re either a show horse
or you’re a work horse and what I’m
seeing in this room are a bunch of
workhorses if you want to be a
consistently profitable trader a
successful trader
you need to be a workhorse it takes time
legend this is an email that I received
from a trader who was nine months into
his trading career hi Mike how you doing
and now been trading about ten months at
the firm different firm than ours and
learning from one of the best traders
for our style of trading the firm as a
whole finds this to be one of the most
difficult markets and decades yet some
of the veteran traders are still putting
up great numbers and even some of the
new guys are able to scrape together a
decent month as for me I’ve really been
struggling and I’m probably towards the
bottom of my class my whole life I’ve
succeeded and become the best at
whatever I’ve put my mind to whether
through intelligence or sheer
determination yet for the first time
ever I find myself at a total loss every
month I put in more effort a while I
learned so much each month it never
translates into results I feel as if I’m
always one month behind this market
where whenever I push my trading to the
next level the market gets harder and
some of my best plays stop working and
the market finds new weaknesses in my
trading after putting so much heart and
effort into something and getting no
positive feedback the emotional aspect
is really taking a toll on me well this
has been my dream job and I don’t know
what else I would do I’m starting to get
pretty disenchanted with the whole thing
at what point should a trader give up
again this was written to me by a trader
nine ten months into their trading
career what I’m gonna say to you right
now after reading that email may be
pretty shocking
that was written by a trader who’s now
one of the top I mean star traders in
the US this trader is gonna do north
five million dollars in trading profits
this year and prior to that he had many
years where he made multiple millions of
dollars a year his nickname from his
colleagues based on his trading prowess
his legend he’s truly one of the great
active traders that I know and that is
out there it takes time it takes time we
read what he just wrote and so after he
actually sent me this email I had a
conversation with them we talked in
depth about his decision and I said look
you’ve got a great mentor you’ve got a
lot of resources behind you you’ve got
ability this is something you really
love to do give it another 12 months
let’s see we’re at he did the rest is
history 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 setup
that turned one of our traders into a
seven-figure big money earner check out
the free webinar that we’re currently
running just go ahead and click the link
that should be appearing right now at
the top right hand corner of your screen
that’s going to open up this free
registration page in the new window so
don’t worry you’re not going to lose
this video you’re gonna learn more in a
couple of hours from this trading
workshop then from years of online
education not yet not yet not yet and so
we used to run something called a
college training program and so college
students would come in and they could
take our training and we’d get a little
bit of a look at them and they’d get up
a really great education at trading
and so at the end of one of our college
training programs I took all of the
trainees at the lunch and looked around
the room and said hey are any of you
making money yet as a trader and they
all kind of looked away almost all of
them looked away turn their head
sheepishly didn’t want to answer except
one and the one trader on college
student chimed in and said well I am now
and we got back to the office
and pulled recruiting aside human
resources pull decided to make sure that
young man applies to the firm he did and
he’s got on to become really one of the
great traders at our firm one of the one
of the really top traders at our firm
somebody who has made well north of a
couple million dollars a year multiple
years now over the course of his short
career and you know I remember him being
just a young man in college and I even
though he was one of the guys who was
getting it a little bit in college and
his first year his trading profits with
us were $60,000 in his second year his
trading profits overall were $180,000
and most of that was towards the end of
year two he didn’t make seven figures
over a million dollars in P&L until his
third year and so if you’re not doing as
well as you want right now not yet if
you don’t think the results that you’re
showing right now are not conducive to
your ability not yet
if you think you should be making a lot
more than you are right now not yet not
yet not yet not yet
we have only trained one trader in the
course of our firm’s business we started
in 2005 so in 15 years there’s only been
one trader that we’ve trained that made
a million dollars in his first year only
one not yet not yet not yet the path to
consistently profitable trader patience
we talked about that not yet not yet not
yet
remember legend a foundation sample
daily routine a playbook in your niche
technology the good fail consistently
profitable trader sizing breath notice
that sizing comes after being
consistently profitable trader notice
how many things come before becoming
consistently profitable trader at our
desk at SMB we’re proprietary trading
desk located in New York City we fund
traders we hire them from zero we hire
them as new traders and give them all
the resources they need to become
seven-figure traders they start with
building a strong foundation they need
to learn everything they need to know
about trading we don’t expect them to be
able to make money unless they first
learn everything they need to learn
about trading so the first step is SME
DNA they don’t actually even come into
our doors to train with us in-house
you can’t even actually be an intern and
walk through our doors unless you take
SMB DNA can’t walk in the door and so
that’s the beginning of us teaching
traders their foundation and then the
next step is to take the winning trader
that’s where they sample Sam
sample they are exposed to different
setups that our best traders are taking
on a daily basis we break those trades
down into variables and we teach all of
those setups to our new traders there’s
break out trays mundum trade scalp
trades breaking news trades market play
trades arm trades across the boards
backside trades all the trades that
active traders take who were elite and
consistently profitable we break down
and share with our traders and then let
them experiment with all of that’s
supplemented with daily mentoring
sessions so we have an AM meeting we
have a meeting after the close
senior traders come in and talk about
what they’re doing well and how they’re
doing it well how they’re finding stocks
and what their best processes are for
trading at their best we have a meeting
after right after the open at 11:00
o’clock
talk about the best setups from the open
that guys can be taking from that day so
the learning in real time we have a
playbook session we have a reading the
tape session where they learn order flow
and and how to read the tape you know
one of the skills that prop traders have
that retail independent traders
sometimes lack but the key is they’re
sampling they’re sampling we and and we
let after we expose our traders to all
these different types of setups we let
them choose the niche that they’re going
to focus on we let them choose the
business that they’re going to build
with inside of the prop firm and
everyone’s different everyone trades
different setups they all make them
their own
from these setups that we teach them and
they all have a daily routine I’m going
to talk about 20 habits you might pick
up add to your trading to help you trade
better having a consistent routine helps
people perform better they have a
playbook
in their niche they develop that by
doing a playbook exercise each day
archiving setups and make the most sense
to them breaking down to coding the
setups that worked that made the most
sense to them each day and then that
becomes the that’s the genesis of their
trading business technology we have
weekly classes where we’re teaching
people how to use technology to build
filters and scripts and and automation
and then consistently profitable a
trader
we don’t expect and so we’re hiring
really terrific people they’re interning
with us we’re hiring the best of the
interns we don’t expect them to really
make money until a little bit later in
their trading career we give them plenty
of time we don’t expect somebody who
we’ve hired to kill it month three so if
we as what people consider to be the
most successful prop firm in the u.s. at
building traders from the beginning into
consistently profitable and then
seven-figure traders that’s what we’re
known for if we are and traders have all
these resources they’ve you know
millions of dollars of capital and the
best coaching the best technology
experienced traders around them who do
really really well everything you need
if we don’t expect them to make money
right away and maybe you shouldn’t find
your talent with the power of sample so
to many who take one or two training
courses fail and then they conclude one
of two things either I’m a bad trader or
the training is is a scam so let me put
this in context so I’m a former Division
one athlete
and when I grew up I played three sports
I played soccer I played basketball and
I played baseball
I played the most soccer spent most of
my time playing soccer I practiced the
most at basketball and I played the
least and practiced I did practice
baseball but practice the least of any
of the sports playing baseball and you
know as I grew older it turned out that
you know I could have practiced as many
hours in the day as they possibly could
for soccer and if I did that I was never
going to be a division 1 soccer player I
could have practiced hours upon hours
and upon hours more playing basketball
and I was not going to be a division 1
athlete but for whatever reason I can
throw a baseball really fast and that’s
part of you know abilities that that I
had and then that were developed but we
need to recognize that as traders we
have unique personality and cognitive
strengths and we need to build on them
and if we go into the wrong niche
learning as a trader we’re not going to
succeed
we have traders on our desk who if we
made them scalp would not be successful
but if we let them do the things they’re
good at can be seven figures that are
seven-figure traders we have traders on
our desk okay who if we made them to be
swing traders would not be seven-figure
traders
find your talent after sampling you got
to try a bunch of different types of
trading different types of products you
got to give it some time and then from
there see where your talent lies for
trading and gravitate towards that daily
routine drives your improvement
James clear wrote one of the great books
last year that I recommended to all the
traders on our desk and in our community
called atomic habits must read find some
time to pick it up he also writes a
great newsletter and in a recent one he
wrote you do not rise to the level of
your goals you fall to the level of your
systems your goal is your desired
outcome your system is the collection of
your daily habits that will get you
there
this year spend less time focusing on
the outcomes and more time focusing on
the habits that precede the results our
job is to develop a routine of best
practices that are effective that we
turn into habit that’s what allows us to
improve as a trader for example here are
20 habits for traders unless you want to
fail that we recommend to our traders
and that they put on their calendar and
implement into their trading day a daily
playbook tape reading watching back
recorded film from the trading session
that’s most that that’s most interesting
to them where big moves came after
mindfulness 10 minutes a day of
mindfulness practice learning daily so
one of the things I do each day is I
walk to and from work well I used to
walk to and from work but now that we
have the coronavirus fears we actually
moved out of the city into a shore house
this big shore house and that’s where
sort of all hold up but what I used to
do was walk to and from work and I would
listen to audiobooks I listen to
audiobooks I listen to podcasts and I
built into my day time for me to learn
sleep properly I wear this or a ring it
measures my sleep I don’t get a certain
amount of sleep i ordering gives me a
really bad score I know that I’m not
gonna perform as well there are traitors
on our desk who risk down when they
don’t get a good night’s sleep
traitor view this is a great tool which
you can use that helps you to crunch
your stats a book of charts every time
you see a really great chart that
preceded a really big move that you want
to capture you take a snapshot of that
chart you mark up the chart and then you
put it into a book over the weekend you
go through your book of charts so you
internalize the really great charting
setups that you’re gonna build your
career out of exercise so one of the
great things that I did last year is
hired a personal trainer even though
we’re secluded right now actually we
have these virtual sessions with my
trainer who is in New York City right
now and you know over my iPad how we do
a bunch of workouts I got a bunch of
bands I got a TRX and we get some good
workouts in no excuses a diet what are
the things are gonna lead to thinking
well it’s a big part of your life as a
trader mentoring sessions technology
what technology you’re gonna build to
find your best trades and prep a daily
report card I’ll talk a little bit about
that rip through charts at night rip
through a bunch of daily charts to find
technical setups that may visit the next
trading session talk to traders when
you’re in a trade you’re going to have a
perspect
that may not be complete go talk to
other traders about theirs put that
together gives you more complete picture
of what really happened to the trade
gameplan your big trade so what’s gonna
be the big trade right around the corner
that you want to be involved in game
plan before your a.m. meeting what are
the stocks you want to trade on that
particular session what are the levels
that are most important to you what’s
your top idea what alerts you’re gonna
put into your system for your third
fourth fifth six ideas daily gratitude
this is an exercise I do with my kids
before we go to bed I say to them what
are the three things that you’re
grateful for from the day admittedly
sometimes I’m met with blank stares and
I sort of coax them into oh you got a
new basketball hoop from your aunt today
oh yeah dad we got a new basketball hoop
but that’s a great that’s a great
exercise to go through before you go to
sleep train your brain so brain HQ is a
great site to visit where you can work
on your mental acuity and relationships
do you have strong relationships that
ground you and make trading so that you
can put trading into its proper
perspective you want to be happy outside
of trading so that when you are trading
you’re trading
better so this is a snapshot of one of
our really one of the traders who I just
think the world of I don’t know that
there’s a trader that I root harder for
and that I’m really more proud of his
success then then than anyone and so and
I have to sort of share this anecdote
which is for I think about the last 18
months I’ve been coaxing him every time
I see him pass me every time we have a
private meeting that he’s going to be
the next green shirt trader at the firm
you earn a green shirt if you make a
and trading profits in the year he’s
been very consistent but has never
gotten up to that level and so I’ve been
on him and on him and on him for him to
think about him being the next green
shirt trader at the firm that he can be
somebody who makes those kind of profits
but before I even really started to get
after him about stuff like that he came
in to meet with our risk manager and
myself about getting a risk bomb with a
particular strategy and I was a little
bit lacs to give the risk bump prior to
the meeting but he sat down and he
plopped his trader view stats in front
of our floor manager and myself
and the stats were gorgeous 10 out of 10
just just supermodel ish looking equity
curve for the particular strategy which
he wanted more capital for and I’m
really glad I didn’t say anything
I’m glad the floor manager didn’t say
anything because we looked at that
equity curve and did the only thing that
anyone would possibly do when they
looked at an equity curve like that
which is we gave him more by power and
but you know he earned it because he
kept the stats he used technology to
show him that he deserved more risk and
us that he deserved more risk but you
should do that too is at home you
shouldn’t be giving yourself more risk
unless you can sit down with trading
stats and show to yourself that you
trade a particular strategy really well
we tagged all of our trades we measure
all of our trades at our firm so we know
which trades we trade the best we know
what our stats are for break out trades
we know what our stats are for fade
trades we know what our stats are for
market play trades we know what our
stats are for breaking news trades and
on and on and on you should know that as
well this is what professional traders
do to ask for and receive more capital
so let’s picture shark and this is a
picture shark getting his first black
shirt at the firm get a black shirt if
you make 2 million and trading profits
in a year and so shark is probably it’s
probably our best overall trader at the
firm and it couldn’t be happier for
shark and you know shark is just
remarkable I I still to this day to
remember when after he earned his green
shirt his first green shirt at a million
dollars in trading PNL writing that you
know his his ultimate goal was to be
able to make 10 million dollars in a
trading year and specifically how he was
going to go about doing that and when I
read that it just inspired me to be a
better coach it inspired me to be a
better mentor a better you know managing
partner of a firm to make sure he had
all the things that he needed to be able
to hit that level and nobody epitomizes
the importance of a growth mindset
better than shark always trying to get
better the fact over the last two years
he’s gotten much better with marketplace
as volatilities expanded volatility has
been above 60 for a long period of time
we haven’t seen that in a really long
period of time he’s been able to take
advantage of this recent market and and
really crush it you know and and and so
I remember having a bootcamp with dr.
Steinberger reteaching shark marketplace
him working on them month by month
getting a little bit better month by
month because he started and became
really good in a low-volatility
environment there are certain setups
that work really well when vixx is 15 or
12 that you need to go to to be able to
be an elite trader like he was it’s
actually really hard to be an elite
trader when vixx is 15 and below even 12
below at certain times and he did that
he figured that out and then and I sort
of chuckle looking at this picture of us
with shark earning his first buck shirt
because and this is this is a career
achievement at our firm you kind of come
up the curve wanting one day to be in a
picture like this and earning a black
shirt it’s like the top of the mountain
but because he has such a growth mindset
because he keeps learning you know this
month and you know volatility and
opportunity was there but this month he
earned more than that in one month he
earned more than a black shirt in one
month he made over three and a half
million dollars in in March and one
month because he was working on his
market play trades and walked into a
market where that really paid and I
chuckle because this used to be you know
a great day at this point this was his
new high day three hundred seventy
thousand dollars in one day but one of
the best practices that we recommend for
our guys is to do a daily report card he
sends this to dr. Steen Barger and
myself each day after the close and we
give him feedback on what he’s doing he
usually focuses on one thing that he’s
working on intensively to improve his
trading so we can get to the next level
and then again we provide feedback look
what he writes in this even with a new
high score I don’t leave absolutely
gung-ho how can I get better how can I
get better how can I get better
how do I find my trading identity
alright so I talk about hey find your
niche find your niche after doing some
sampling but what does that really all
look like so here’s some thoughts that I
shared recently on our blog on finding
your trading identity foundation train
so you have a solid foundation in
trading that’s got to come first
that sample gained exposure to different
setups with edge to see which ones make
the most sense to you consider how
you’ve been successful in the past and
find setups that accentuate those
strengths so if you’re a really quick
thinker and you’ve noticed you’ve been
faster at thinking than other people in
the in the past you just sort of get
things really quickly may be really good
at math think about scalping if you are
a really great analytical thinker all
right well you’re gonna you’re gonna
gravitate towards trades that work for
your cognitive strengths all right then
build the playbook this is your business
I wrote a book called the playbook the
second book that I wrote I hear it’s
pretty good I might want to go check it
out if you don’t know how to actually
build the playbook or you go to our
YouTube channel where we have lots of
examples of playbook trades for you guys
to learn about I’ll also show you a tray
a little bit later in PlayBook form that
you can co-op for your trading sit with
your trend trading identity before the
open so there’s a video that I’ve I did
with Austin Mitchum there’s a great
Australian equities trader take who took
the principles that I taught at an SMB
DNA and applied them to the Australian
equities marketplace but one of the
things that he does to make sure that he
is at his best and takes the trade
that highlight his personality and
cognitive strengths is that he literally
sits before the open with his trading
identity and reminds himself what he’s
good at
before each open tag and measure your
trades keep score so did a video
outlining how to keep trading stats to
find your niche which you can find on
YouTube crease your risk on setups that
measure well in real time and doing what
we do best
makes us the best version of who we are
so think about that how were you
successful in the past what did that
look like how can you apply that to
trading you know and a great example of
that is and I chuckle looking at this
this is swang this is swine getting his
first black shirt and like shark in
March he earned enough just in that
month to earn a black shirt you know he
did over three and a half million
dollars in trading P&L for the month of
March and one month and it wasn’t that
long ago actually where he so I had been
a incredibly consistent trader for a
long period of time and just his numbers
were just incredibly consistent able to
make a lot of P&L but day in and day out
week in week out month in a month just
always pretty consistent very little
draw downs but there was one period of
time where he did have a drawdown and I
remember him bringing in his statistics
for the month to a monthly review
session with his team dr. Steinberg or
myself and our floor manager and he had
experienced the period of drawdown I
think the first one that I remember
since he started eight nine years ago
and we looked at his stats and you know
dr. Stein Barger type of stats and said
I’m seeing the problem and he said don’t
let your swing trading get in the way of
your swang trading and what this great
active trader was doing was he was
taking too many trades
on longer time frames that were not his
niche there outside what he does best
and this elite Raider having him do
something that he wasn’t best at not
only diminished his results but turned
his results incredibly positive results
to a drawdown to losing money by just by
making too many swing trades for
somebody that’s that’s more of a very
active trader that’s how important
trading to your niche is that’s so
important I mean if it’s that important
for swang somebody who made three and a
half million dollars in trading profits
in march somebody to prior that is on
multiple years earned a black shirt for
his trading profits if it’s that
important to him one of the best active
traders in the US and by the way one of
the most polite traders you’ll ever meet
what does that mean for you if you’re
trading you’re the wrong niche you’re
not trading a niche that’s best for you
what do you think that means for you
look what it means for him the good fail
and look I think this is important in
your journey to be a consistently
profitable trader it’s not just gonna be
all winds and smelling the roses shark
at one point before becoming a green
shirt trader lost three hundred fifty
thousand plus dollars and one
after-hours trading KBI oh okay
he remembers that as three hundred fifty
thousand dollars I remember it is four
hundred thousand dollars will let him
well we’ll go with his results and you
know that’s that’s that’s an opportunity
to get better but that’s a big hit and
so that’s going to happen and a great
lesson
that I could teach to you guys relates
to me working out and so I go to the gym
twice a week I used to before the
coronavirus fears but I would go twice a
week to the gym after work and work out
with my trainer and we do a lot of
deadlifts I sit a lot he wants me to be
flexible and strong in my hips and so we
do a lot of tons and tons of deadlifts
and I’d never done a deadlift before
working out with my trainer ever I’ve
never done one I’ve been a former
athlete had no idea how to do on it so I
had to learn from scratch and I love
learning things and adding stuff to my
repertoire and so I had to learn proper
form I had to learn how to get over the
bar hold the bar get in the right
position do it the right way so that I
could be able to one day lift heavy
weights and so I was uncomfortable at
the beginning getting over the bar the
right way and getting in the right
position and yeah but but but slowly I
started learning slowly my form started
getting better and I would add weight
trainer would add weight felt good about
myself kept increasing the weight kept
getting better until at one point I had
a ceiling I just couldn’t get past this
one particular barrier and so you know I
I said to myself let me let me sort of
think about this and I trainer and I the
way that we work after every lift we
talk about each left and so I do the
left and he’ll give me some feedback
I’ll give him some feedback were like a
golfer and a caddie working with each
other and you know so I really had in my
head I gotta figure out how to get
through this one particular weight and
my trainer and I came up with a plan and
we said look
get over the bar get in apposition get
in a safe position and pull as hard as
you can and if it comes up it comes up
and so I’m like all right and I kept
working on my firm my form building my
confidence so one day I really think I’m
gonna do it I get over the bar you know
we’re at my max weight get in a safe
position and I pull and I pull I pull
with all my might and get it off the
floor a little bit and I’m pulling it up
I drop it to the floor it was just too
heavy my trainers looking at me waiting
for me to give my feedback I’m
collecting my thoughts I looked at him
and I said that was a good fail that Sal
gave me the confidence
that I knew was going to help me to
break through this barrier because when
I dropped that way to the floor nothing
hurt
my back didn’t hurt my knees didn’t hurt
I was safe I was at full exertion and
nothing bad happened and I relate this
to having a strong foundation being a
good risk/reward trader and pushing your
size when you can get to the point where
you see a trade you really love you know
what’s one of your a plus setups and you
put on your max risk for it the the risk
that you know that you can you can take
on a particular trade which should be a
percentage of your overall bank so if
you’re a swing trader you never really
want to lose two to five percent more
than two to five percent of your bank of
your buying power of the money you’ve
got up at a firm or your trading
personally if you’re an intraday trader
you always have a intraday stop-loss so
let’s say I’m not going to lose more
than $5,000 I’m let’s say I’m not gonna
lose more than $1,000 in a particular
trade if you find one your A+ trades you
might say I’m gonna risk 50% of that
thousand dollars on an A+ trade and you
put on the risk and if that trade
doesn’t work out you’ve only lost 500
bucks your accounts fine no worries
okay you can still go from there that’s
an important thing and and so you know
fast-forward a little bit a couple weeks
later kept working at it forms getting
better got over that bar got in a safe
position and I pulled and I pulled and I
pulled and I got that wait up I
succeeded getting that lift I broke that
barrier I dropped the way to the ground
I gave my trainer a fist bump
this was of course before social
distancing where we could actually do
fist bumps and give each other
high-fives got a drink of water came
back and my trainer of course is waiting
for me doing what he should be doing as
a trainer which is asking the question
heavier you got more I looked at him and
I said I do and we put more weight on
the bar
I got in a safe position I got over the
bar I pulled I pulled and I pulled with
everything I had and the veins in my
neck were popping out and I got that
weight up again for a second personal
best in one session dropped the way to
the floor gave my trainer a fist bump
and and had a new record but that’s what
you can do when you have good form in
place and you want to size up as you can
exert yourself as long as you have your
risk guidelines in place you can fail
but then from there take it further and
get to that next step in your trading
because you know nothing really Bad’s
gonna happen you can put on your max
risk in a position thousand dollars of
intraday risk I’m gonna give at $500
worth of risk I’m gonna put on $500
there’s a risk I lose fine if you keep
doing that over and over and over again
inevitably you’re gonna have that trade
where you make more than you ever did
you’re gonna make $3,000 that’s gonna be
the new high for you with your trading
that’s gonna push you to see yourself as
a different trader and be at a different
pedestal overall in your career so one
of the things that I see that’s very
different between professional traders
and retail traders and independent
traders is I call it just I call it just
just just you need real edge in trading
and you can’t just have 20 habits do
them every day and without real edge
think that you know you’re gonna make a
lot of money you need real edge what I
see with retail in the penetrators is
they just make a technical trade or they
just make a fundamental trade or they
just they
look for a setup okay
well professional traders do is they put
a bunch of variables together all right
and that helps them to make really good
trades how do I build a consistent
trading business you want things to be
scalable repeatable identifiable you
wanna be able to control your risk put
on substantial size put on real risk you
want to save your risk for a plus trades
let me show you a playbook example
you’ll learn actually how to make a
playbook trade by me work working
through this example but the key is
notice how we put multiple variables
together to make a professional trade
this is the difference between what
retail and independent traders do
deletes their underperformance or the
gap in performance between them and a
professional trader and what pros do so
let’s talk about the playbook playbook
is comprised of the big picture a news
catalyst longer term technical short
term technicals reading the tape
intuition intuition we’re putting
together multiple variables to make an
a-plus trade we’re not just making a
technical trade the bigger picture for
this particular trade SP is at the top
of its range following both European and
Asian markets to the upside and
extending the strong gains from Friday
amid positive comments from President
Trump and other officials on trade talks
along with a move by China on this
particular day over the weekend to lower
borrowing costs for companies and also
reports the Germany they’d also be
considering a stimulus measures
president Trump played down recession
over the weekend while his top economic
adviser Larry Kudlow predicted a strong
second half performance for the US so
that’s our big picture what’s the
overall market doing where our
resistance and support levels in the
overall market we are in a strong up
trending
market where what kind of market are we
in overall the bigger picture for weebo
stock symbol WB it’s beaten down on the
daily chart it’s consolidating a
three-year lows before today’s earnings
report so we’ve got a stock that’s sold
off from the high 70s all the way into
the 30s where has this stock come from
prior to that it was a hundred and forty
dollar stocks will come off a ton
intraday fundamentals we Bo’s a Chinese
micro blogging website it’s one of the
biggest social media platforms in China
Weibo reports earnings of 68 cents per
share on revenue of about a half a
billion dollars for q3 Weibo estimates
revenue to increase six to nine percent
that’s above Wall Street estimates of a
five percent increase to four hundred
eighty five million here’s the key
monthly active users were four hundred
eighty six million in June 2019 a net
addition of approximately 55 million
users year of a year what that means is
the product that they sell is in higher
demand
what they sell is more attractive to the
marketplace the street loves this
the street loves when a company makes a
product that people are using more and
there’s more demand for volume 7.35
million
arvo 5.5 that’s relative volume go to
our YouTube channel SME capital to learn
more about how we use our bow ATR 1.6
short interest really high 66.7%
that means there’s gonna be lots of
natural buyers as shorts may need to
cover because we now have this really
positive news catalyst behind this
particular name their monthly active
users are up a ton their business is
doing a lot better than the street
expected and that they’ve been doing
prior this is a really positive news
catalyst are the float at 17 million
want to know the details that go into
what is important to make a trade
decision alright we both pre market two
minute chart we’ve got a nice level here
at forty fifty as these pre market highs
and a little resistance right there
we’re going to note that level as
whether or not it’s above there or below
there or thinking about trading it and
then our trade management
alright Tier one we’re long tier 1 when
we bow makes a higher low and reclaims
view up after making a 180 our move to
the upside and testing pre market highs
so we’re gonna risk half to the Wicklow
and low of day
okay so we’re Tier one tier two long
tier two after WB we bow test the pre
market and holds view up a third time
risk previous higher low we can now see
the wedge forming on multiple timeframes
trade management Tier three the wedge
breaks to the upside holds the
pre-market high and consolidates so
we’re going to add Tier three risking to
Viwa
all right Tier four we bow breaks above
the high the day the 41 higher timeframe
technical level and holds and your final
lot you’re now in a position of strength
and have a good average so we’re adding
as this trade is working for us the
price action is working together we
really like to use view op we like to
buy stocks that are above you up
you don’t like to risk a lot when stocks
or below view up again remember our
Ville is pretty high in this as well
indicating the stock is really in play
when when when I when a stock is holding
consistently above you up it means big
money managers really want to buy the
stock great indicator for you guys to
use all right multiple time frame wedge
one minute 5 minute 15 minute all in a
really tight consolidation wedge this is
one of the best technical patterns that
we can teach you for active trading why
do we want to look at multiple time
frames because lots of different traders
look at multiple time frames some
traders like to look at one minute some
traders like to look at 5 minutes some
traders like to look at 15 minutes when
the wedge is breaking above people are
looking at 1 minute and traders who are
looking at 5 minute and traders are
looking at 15 minutes that means you’ve
got three distinct segments of the
population who used technicals who are
all seeing a buy signal it means more
players are jumping in on the long side
as this is breaking out of a wedge trade
management part – all right so how are
we going to get out of our winning
position the stock the stock fails from
42 and retests so tier 1 into 42 so we
can’t really get above it a couple of
different times so we’re gonna lighten
up a little bit all right
WB fails into 40 to 50 that makes a
lower high so we’re gonna sell tier two
sidenote now that we have confirmation
or traders working we should adjust our
stops I set my stops for one half below
view up and one half at 41 which is our
support technical level and then WB
fails to get over 90 cents and tests 43
so we’re gonna sell tier 3 and hold the
remainder to the clothes for momentum
trade you could also hold the remaining
shares for a two-day continuation swing
trade all right so we’re using our
reasons to exit in this particular time
period now notice there were variables
in our favour we had a beaten-down stock
news catalyst hi shorty interest
elevated arbol holding above view op
consolidating above booyah
breaks out of a bullish web pattern high
a day’s news catalyst we’re not just
making a technical trade we’re not just
making a fundamental trade we’re putting
variables together to make a
professional trade that’s how we get
these outsized risk reward traits
putting multiple variables together to
make an a-plus trade so elite active
traders trade out their best when so I
have the advantage of coaching really
greatly traders outside of my firm we’ve
developed a tremendous amount of the
lead active traders inside of our firm
we’ve watched them from college all the
way up to being star traders there are
commonalities as to when they’re trading
well and when they’re underperforming
and believe me elite traders
underperform at times and they need
coaching and mentoring to get back on
track and if they do you should expect
out of yourself to the commonalities
when they’re trading at their best is
when they develop a thesis but they
don’t just trade the thesis they also
look for a setup in their playbook and
they see it and they fight for price
that equals one good trade so they find
a set up in their playbook we talked
about niche they’re searching for
setups that are part of their niche what
makes them great they spot that they see
it there’s confirmation from the price
action and the volume that their thesis
is correct it’s being confirmed by other
market participants they fight for price
if the entry is thirty they’re getting
in really really close to 30 they’re not
sloppy with their execution entries
because that messes up their whole risk
reward when they’re doing all four of
those things that’s when they’re making
good trades that’s when they’re trading
at their best when they’re not when they
just trade their thesis I think Tesla’s
should go down they trade really poorly
I think oil should bounce they trade
really poorly
I think this market has no chance to go
up from the bottom and should break
through new lows on the S&P that’s when
they traded their worst a game of no
regrets so I want to leave you with a
really great podcast that you all might
check out and it’s a podcast that was
done by Peter T as a doctor in the US
with a colleague of his Rick Elias who’s
an entrepreneur and so Peter had Rick on
a show and asked him about an experience
that he had in his life that was
life-changing
and so rec was one of the people on a
very famous us flight and it was a
flight that took off from New York City
and was to head to Charlotte that was
flown by captain Sullenberger and that
landed in the Hudson River and Rick is
sitting in first class and they take off
and pretty early into the flight he
hears this huge sound like an explosion
and he’s not really sure what it is that
it just sounds like something exploded
and he looks
the stewardess whose diagonal from him
and that stewardess is perfectly calm
and so he just figures something
happened and he feels that the plane
turning around
feels like a you know I guess we’re just
gonna turn around and go back to where
we took off from no big deal here and
you know they start to descend a little
bit and start to descend pretty fast and
it doesn’t feel right and he looks at
the stewardess and the stewardess has
sheer terror now on her face and at this
moment he knows and for the next 90
seconds he knows he’s certain to die and
what he experiences in those 90 seconds
is completely different than what he
thought he would experience well you
might think you would experience what I
thought he would experience and teaches
us a great lesson you would think that
during those 90 seconds when he was
certain he was going to die that he
would be incredibly scared it was asked
about this and he said that wasn’t
really what I was thinking about I
wasn’t really scared he said I was
profoundly sad I was profoundly sad
thinking about things that I wanted to
do that I should have done that I hadn’t
I was profoundly sad with regret about
certain things that I had done the plan
the plane is descending
and miraculously it lands on top of the
Hudson River and everybody survives and
from this experience Rick says that here
in this incredible gift that he earned
the gift of not really just life but how
important is and how it crystallized to
him that he was playing a game and that
there was a game to play going forward
that was a game of no regrets and so
look if trading is something that you
really want to become good at trading
something that’s important to you it’s
got to be a game of no regrets hey go
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