Every so often a trader will find me and say,”I am going to step it up.” I love confident traders. And every so often Steve, GMan, JToma, or I will tell a trader that they need to step it up. And you can sense after the talk they would run through a wall if that is what it took to get better. But the funny thing is “Step it Up” means different things to different people. Sometimes after a trader has told me they were going to “Step it Up, I watch their reaction bewildered. They aren’t stepping it up. They are trying too hard. Or they are just trading with more size. So let’s discuss what we mean when we say, “Step it Up.”
We spend a great deal of time at SMB watching film and developing our trading skills. I’m not much for motivational speeches. I think I might have yelled at our desk 2xs in 3 years. I think Steve might have yelled once. Traders will trade better when their skills are better. But I am a huge UConn fan and sometimes wish I could scream more like Coach Calhoun. I think that might be fun every so often. But I am not. And that would not help our traders. So we focus on skill development.
But psychology is the 800 pound gorilla in the room for every trading desk. And a trader must set goals for themselves. Some of those goals should be monetary. For example, one of your goals may be to work on your position sizing. Another may be to make $1k a day for the next two weeks. You need short term goals and long term goals. You need to set some profit targets.
When you set a goal to make $1k a day your brain then starts to obsess with all of the things that you need to do to obtain that goal. Ok so let’s say you are obsessing. You really want to make $1k a day for the next two weeks. What do you obsess about?
For us, we obsess about stock selection. You are only as good as the stocks that you trade. So before bed and in the AM you must find that stock that is best For You on that trading day. And then you must mentally rehearse the best trading plays for that stock. You must visualize yourself making these plays. You must mentally practice excluding plays that do not work for you.
I think about my trading all the time. I review my bad trades. I review my good trades. We watch a lot of tape. But mostly I spend a great deal of time thinking about my trading. What were the best trades in V today? What were the catalysts that made V trade higher on the Open? And I brand my mind with these plays. So the next time I trade V, after earnings, I will have a rough outline for some good trading plays. And before I trade V, I will mentally rehearse these plays.
I know that some traders think to Step it Up means to focus really hard during the trading day. Some think to Step it Up means to add size. Jay Bilas defined a tough player the other day on ESPN. Bilas remarked that most young players think being tough is about pounding their chest after a play. Bilas explained that being tough was about being in a stance while on defense, and setting good screens, etc. So this is my Bilas advice to you. To Step it Up means to obsess about stock selection and prepare you mind mentally for the trading day. If you do these things you will improve.
Best of luck with your trading.
You can be better tomorrow than you are today!
Mike Bellafiore
