What is a good ratio to start out with, 2:1, 3:1? @mikebellafiore I was asked this question during a recent Webinar, “Trading Fundamentals: Things Great Traders Do and Never Do”. We teach our new traders to look for a risk/reward of 1×5. That means a downside of 1 for an upside of 5. More specifically you might risk 10 cents … Read More
Getting Into Trading Shape: A Trader’s Story
Hi Mike, September 1st 2013 makes it three years that I have been trading full time. I’m writing this email to seek your experienced trader’s counsel. I don’t have any job and I’ve been thinking about my experiences trading, which for the most part have left me bitter. You must be wondering how I’m still continuing to trade after three … Read More
Do Not Sell This Position
Hi Mike, First of all I would like to thank you for writing The Playbook! I’m not quite through it, but I’m already finding it extremely helpful and valuable. I wanted to share some challenges i am currently having regarding a situation where there is conflict between certain rules I follow for establishing when to close a position and one … Read More
From The PlayBook: Reasons2Sell
Here’s our latest excerpt from The PlayBook. It comes from Chapter 3: “The Day Knight Capital Almost Fell (A Support Play)”. The chapter begins with a question: “How Do You Know When to Sell a Winning Position?” Dear Mike, I recently read One Good Trade and found it a quality read relative to all other books I’ve read. It has been … Read More
Anyone Make Money In Slow Markets?
Recently one of the trainees in the chatroom asked me if the slow currency markets are normal as we conclude the summer months of this year. My answer? Yes, we are still in holiday mode. I then explained my theory as to why we experience slow markets in general which is what I am going to explain to you in … Read More
How Our Traders Deal With Random Price Action
Prices are random, especially on smaller time frames. So what to do? — Marc Principato, CMT, Risk Disclaimer *No Relevant Positions
Using ATR With Your Trading
Hi Mike, I just spent the entire weekend finishing reading The Playbook and I just wanted to grovel at your feet a little bit. I loved it. OGT was my favorite trading book ever, and this book is an absolutely perfect companion. As a lonely trader doing it on my own, every time I read one of your books I … Read More
An Aspiring Trader’s Email
At SMB we get a lot of emails from traders of all levels. Much of the time they are from aspiring traders who are very passionate about the markets and their work. And all of us here make every effort to respond and provide some insight into the world of professional trading. So in this article, I am going to … Read More