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 uptrend are you prepared to be in it for a SuperChop?  GMan has been walking around our floor chirping that if DECK starts to turn he is gonna lay into it.  Whether you like his short idea or the long is not the point.  It is GMan preparing his mind for his SuperChop.  He is searching for them.  Rehearsing how he will trade these opportunities.  Getting input from others.  Running through different variations of how the opportunity might be traded.  Preparing for your SuperChop is a trading technique to master.

On Friday when CMG was weak, and consolidating near 240, were you ready for that next significant downleg?

Before each week, heck each trading day, do you map out possible SuperChops?  In your gchats, tweets, IMs, phone calls do you discuss potential SuperChops with your trading brethren?  During the weekends do you rip through charts and stop on that one play that may make your month, rehearse trading plans, and prepare yourself to make this trade?

If you are not ready to make a super chop then it will not happen.  The opportunity may arise but you will not crush the play.  We have our plays, our bread and butter plays.  But then we have our chops.  And this pays for the Paul Stuart cashmere sweaters, Babbo dinners, Ferragamos, or whatever else it is you are in to.

Preparing for your SuperChops:

1) Develop a list of potential SuperChop plays that makes sense to you

2) Before each trading session spend some time looking for these opportunities

3) Map out how you will trade these setups.  Get short below a level and watch the stock drop is not what I am talking about.  Think of all the different ways this play may manifest.  Map out all the subsets with your plan of attack.

4) Visualize making these trades.  Prepare your mind to make this SuperChop.

5) Make them and then work on getting better with your potential SuperChops.  For example today after the Close we will watch tape of LVS below 47.50 and discuss how to crush such a setup.

Remember you cannot control how a stock reacts.  But you can prepare yourself to be in those best opportunity plays. You must prepare for your SuperChop.

Mike Bellafiore

Author, One Good Trade