Mike,
I just joined SMBU and I’m half-way though all the lectures and I like it a lot.
Bluntly, I’m a piker. I’ve failed numerous attempts at trading and blown through a lot of money….
I’m trying to apply your best set up/idea concept to his strategy> the best example can be the BABA trade on 5/25/16. SEC investigation into BABA earnings/revenue, but the technical setup was that it closed on the previous day’s high and gapped below the previous bar low. (Trading educator elsewhere) calls that a kicker pattern because all the longs are trapped and have to exit and with SEC investigation, as you know, some funds have to sell. I hit the first inside 5 minute bar and down and took off half my position almost equal to the inside bars range, because if I were to get stopped out it would be a free trade. Well, I got stop out though 77.77 on another inside 5 minute bar and up. But the real trade was hitting the 30minute shooter star and the inside 60 minute(bottom of the hour 60m) down two hours later.
My question is, isn’t time and timing as important than any indicator? When I was at (firm deleted) I would hit my daily stop loss at the opening and then the stock would trade in my favor later in the morning. The BABA trade, I was expecting the move off the inside 5 to be the real trade because I’ve seen moves like this before and hit my targets in a flash. It’s the AM and the news is not good, institutions have to sell.
I know my argument and plan is valid; and I know I need to protect myself. But, it’s frustrating when some set ups work effortlessly, while others take their time and test your patience. Yes, the inside 60 minute was the real trade to initiate and then add to with additional actionable signals. I have patience issue because I want my stock to move in my favor immediately or I’m out. I expect something to happen immediately or why would I take a trade? I don’t want to buy on support and wait, which seems like an eternity, for everyone to make up their minds and what they want to do. I don’t like sitting in traffic especially when I’m in the passengers seat.
Shouldn’t timing matter most and shouldn’t your position do something immediately?
*I know I’ll never be a 100k/month trader and I don’t even care but I know I can get better. And I will!!
@MikeBellafiore
As an active discretionary trader, we must be right about:
a) direction (very hard)
b) timing (even harder)
c) amount to risk
d) exit plan if we are wrong
e) exit plan if we are correct
f) size
On the whiteboard in my office sits a sketch of the variables of One Good Trade, which I often use to illustrate a point when mentoring experienced traders:
- Thesis
- Price Confirmation
- News Catalyst
- Fight for Price
- Trade in your Niche
As an active trader, you are damn right! you have to be right about timing. I would agree that you should be in the money quickly for most of your trades as an active trader. There are some slow moving trades that do not require being in the money immediately, but they are the minority.
I love your thought. I not only have to be right, but I have to be right right away.
Often I trade with a time clock in my head. I enter. I expect the trade to move in the direction of my thesis in a certain amount of time. If it doesn’t, I have a trade decision. Often I cut and reevaluate as the trade has not done what I expected. Why have risk on if the trade is not working as I had intended?
The best trades after review tend to exhibit these traits:
a) you are in the money immediately
b) the trade is clean
c) upon you review you can find areas where you could have gotten bigger responsibly
d) there is a catalyst behind the trade
e) you can see competing interests take positions and one side starts winning
f) you can identify a trade to express your trade idea from your PlayBook
Gr8 question. Trade well.
*no relevant positions
