Hi, I attended the 2nd Day session with Mike during Ifest Singapore 2013. I am blown apart by the depth taken to create SMB trading protocols and the rational behind them. I was particularly pleased with Risk allocation technique created by Mike (that was simply brilliant). A sample can be seen here (http://www.smbtraining.com/blog/did-you-trade-well-part-i).
For the first time, I am able to allocate risk based on the type of play that I am going to trade. A bigger risk for a higher probability trade (e.g. A+ trades), lower risk for a lower probability trade (trades that I’m trying to develop). As a result, I am relieved of having to worry whether have I put too much risk on each trade because I have did my homework of sizing up the type of play and putting a pre-determined self-assessed amount on them. I cannot ever stop thanking Mike for this as I am a gut-feeling trader that for years trying to quantify and qualify money management from a risk management perspective.
@mikebellafiore
You cannot scale your trading responsibly if you do not have a system for allocating risk. To our desk this means archiving A+, B and Feeler trades and predetermining the percentage risk for each trade. For A+ trades we encourage our traders to place 30 percent of their intraday loss and less for lesser trades. Often traders think in share size which is a mistake. Think in setting a risk system based upon a percentage of your book. Then when you are profitable just increase the amount of your trading book and keep setting your risk as a percentage of your book. This is a scalable trading system. (For those of you who are interested, I discuss this in greater detail in The PlayBook).
Related blog posts:
Risk: So Not a Game
Learning to Take Pain
You can be better tomorrow than you are today!
Mike Bellafiore
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