Hi Mike,
I had read your book and found it really educational as well as being very fun and entertaining to read! Thanks so much for generously sharing your experience, and also for the really great blog as well as all the videos from Steve.
I have a question I was wondering if I could get your thoughts on. I saw a powerpoint you shared on your blog on your preparation and realized that the actual trading is done during the open and close only (from 9.30am to 11am and 3pm to 4pm), if I did not read it wrongly. As someone taking her baby steps in trading, I was wondering if you would advise spending more time watching the screen throughout the entire trading day just observing the bids and offers to develop a awareness first? Or would it actually be far more effective to practice trading during the active sessions, and spend more time on preparation and reviewing the trades done instead?
I genuinely appreciate any thoughts and advice you could share. Thanks in advance and absolutely looking forward to your next book!
@mikebellafiore responds
It is probably the case that I need to clarify midday trading or your trading power lunch. You want to trade less during the midday than the open or close as volume decreases, but you do want to trade. During this period we are looking for stocks that are trending. We search mostly for stocks that are weaker than the market for which we can get short. And stocks that are stronger than the market for which we can get long. In technical analysis terms this means finding bullish flag patterns and bearish flag patterns and trading with their trends. These are Trades2Hold where there is not much work to do managing these positions. The trades either work or don’t.
Funny anecdote- in Singapore on our students was affectionately nicknamed Mr. Lunch. He earned this nickname for expressing reluctance to trade during lunchtime. He preferred for nothing to get in the way of his precious lunch. Then there is GMan, who eats lunch at his desk, while managing 20 plus positions.
Since trading is lighter you may want to multitask during the midday. Good exercises for a power lunch include:
- talk to your trading neighbors about trades you both were in
- review your open
- record notes in your psychology journal
- archive a PlayBook trade (learn more in my next book The PlayBook)
- watch tape of the open to improve your tape reading skills
- rehearse a best set up trade for into the close
- read some trading blogs
I hope that helps.
Mike Bellafiore
