I was on a call yesterday with an experienced trader who wants to do better. I also had a long talk this week with some new traders who want to do better. Finally, I received a ton of emails this month from developing traders who all want to do better. The above will never end. My most important task with all these traders is to explain to them how they can help themselves improve.

For example, one trader had a fading system that needed some improvement. After a short discussion I could see some areas where he could make significant strides. He could expand his strategies to higher volume stocks and could size up at definable moments. My contribution could be important but this is not going to fix his trading. Now it is up to him to do the work to makes these changes make sense to him during real time trading.

Exposure to a better system is necessary for many but just a start. Too many conclude that exposure to a new system is the start and the end. It is so much harder than that.

If I sit next to that trader I will do better. If I can learn that star’s system I will do better. Yeah, that’s all good but it’s not the end of our discussion.

There is a humongous gap between exposure to a profitable system and internalizing profitable trade set ups. You may hear or read what to do under certain market conditions but your ability to actually do that during open market hours is not only about what you’ve heard or read. It’s about the work you do to build the ability to make those trades that make sense to you and then to execute when the lights are on.

Let’s take two scenarios. Trader A sits in a room full of traders outlining certain trades for the open. He listens, takes notes, and then leaves the room. Before the open he goes outside and talks Yankees with his friends, sits down a few minutes before the open and waits for the bell. This describes most traders.

Trader B sits in a room full of traders outlining certain trades for the open. A market trade short below 117 spurs heavy activity in his trading brain. He has considered this trade the night before and sent Gchats out to trading friends. He has mapped out multiple subsets for how this trade may develop. He has found stocks and levels to also watch if SPY hovers below 117. The trader then talks with others about how they will attack a move below 117. Trader B then sits quietly and mentally rehearses how he will trade the different subsets for how a move below 117 may develop. He makes notes of prices and stocks in his trading journal that sits next to his desk. Trader B stretches, gets some water, and then watches the market trade in the premarket to start getting a feel for the open. Very few will ever be Trader B.

Keep learning more about set ups that may work for you. Keep reading about the technical trades that master traders are crushing. But understand this does not mean this will now work for you. It certainly can. And this beginning work is essential. But it is not sufficient. Someone else’s trading cannot fix your trading. Now it is up to you to do the work necessary to internalize those trades.

You can be better tomorrow than you are today!

Mike Bellafiore

One Good Trade
The PlayBook

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