After the open we took the new guys into the training room for them to highlight their One Good Trade(s). I move to the back of the room, open up the floor for them to present any best trades to the rest of the class, and let the new class argue amongst each other. What do they need me for 🙂

One thing that gets my ire and receives this coach’s grilling is a lack of a well-thought-out trade. Argggh. These newbs are well taught. So says @alphatrends on twitter: good luck to all the new traders at @smbcapital going live with real capital this morning, you have been taught well . They know what they are doing. They can make trades their own. And then they say some stuff that needs correction. 1) The detail from their trades is not sufficient. 2) The logic is flawed.

So the first presenter All Charts makes a technical play. We make our guys name their trades (I name them)- so let’s call this an All Charts Technical Breakdown Trade. Not a bad name there. Expect it is not really a Technical Breakdown Trade. All Charts is not detailed enough. It was a Combo Sector Technical Breakdown Trade. Big difference. The FCX level break was accompanied by a breakdown in copper. So now we have a trade that should be held longer and given more room. This matters.

Next was Iron Mike Mike who used an 8 week chart to start his short position in BP but then covered using the tape intraday. We have a flawed logic issue here. Actually Iron Mike Mike made a tape move to move trade which made sense he just didn’t know it.

Everyone’s Best Friend made a nice technical trade in TIE but then covered because, “I wanted to book my first trading profit.” Obviously this is understandable but not a reason to cover. Let it run young fella. And I say that even though you would have been stopped out for a loss if you had.

All trades are plays. You judge them on whether if you made them a thousand times you would be successful.
Give them names. Make sure the exact details of the set ups are clear. Make the trade your own.

Mike Bellafiore
Author, One Good Trade (Wiley Trading)