After the close a new trader shared his frustration with stop outs in FCX. His solution: ignore his predetermined stops for if the stock traded against him (let’s call him MC Trader). This is how you end up at a new job. MC Trader set a stop in FCX for 66c. FCX traded past this price but MC Trader did … Read More
The Evolution of a Trading Answer (Part II)
Yesterday we examined a trading question from one our remote trainees here. When faced with such a question often a trainee wants an answer ASAP. And for me certainly it would take less time if I just offered the answer to trainees and moved on with my day instead of asking them questions, letting them struggle for the answer, and … Read More
The Evolution of a Trading Answer (Part I)
Recently I was sent this question from one of our SMB Training trainees: On day 10, you show a video about flipping in SLM. When watching the video I could understand your thought process of entering and flipping based on looking at the tape. Nonetheless, what I could not understand when watching the video is your thought process when wanting … Read More
A Signal from the Level II
On the Open GMCR and BEC gave us a signal from the Level II, we say Reading the Tape, that they both were going down. After this signal there was opportunity to add or take a position with the side of this signal. Some time passed and then it happened. Both stocks headed in that direction of the signal. 33.50 … Read More
How We Found an Important Level (LVS)
We have identified 47.50 as an important level in LVS. Yesterday it leaked below this level and had a serious intraday downmove. Chop! SuperChop? Today 47.50 was again an important level. How did we find this level? On December 2 there was this news from briefing.com: Las Vegas Sands in 8-K filing discloses that Sands China’s application for a land … Read More
The SMB SuperChop
47.50 is a huge level in LVS. On the Open it traded below there. I hit the bids. LVS found 45.60. Were you prepared to make a SuperChop? CELG announced new disappointing news about a drug. It gapped down, showed weakness on the open and dropped like a falling knife. Did you make a superchop? If DECK breaks its longerterm … Read More
In a Market of Volatility Hidden
Yesterday I was a panelist at High Frequency Trading World USA 2010 in NYC where we discussed HFTs effect on market volatility. Some are concerned that a market overly volatile will scare investors from participating in the market. Since HFTs are our modern middle men, perhaps market maker rules should be considered for them. This is an idea worth exploring but will not change … Read More
Improve Your Performance by Watching Yourself
One of our traders read our blog post last night on improving your performance by watching and shared some interesting additional data. This comes from the book One Second Thought: Outsmarting your Mind’s Hard-wired Habits by Wray Herbert. Psychologists used to think that perception and movement were two completely separate process, lodged in different regions of the brain. The common … Read More