Archive for July 2008

A Trade You Must Be In

Jul 24th, 2008 | By | Category: General Comments
On our desk there are trades that you must be in. There are setups that if offered by the market you must exploit. You should have a list of the trades that you must be in. And if this trade results in a loss you are not annoyed. In fact you are grateful for the opportunity. There are trades where the risk/reward is so favorable that you just make the trade and wait for the result. One of our experienced traders was cussing himself out under his breathe today at a few of these setups that he failed to execute. In fact, he asked me to kick him off the desk. Back in the day it was not uncommon to get kicked off the trading Read more [...]

The Day Doesn’t End Until 4

Jul 23rd, 2008 | By | Category: General Comments
One of my favorite phrases on our prop desk at SMB Capital is: the day doesn't end until 4. If you start negative then you have the rest of the day to make it back and then some. In this market there is so much opportunity it is a waste of energy and irresponsible to get down after a few losing trades on the Open. There is too much money to be made. Just think about yesterday. You could have been firmly negative and then caught the explosion in the financials and the XLF (chart attached below). These days offer you the opportunity to mess up the Open and then still have a great day. This AM I was promptly down $1500 Read more [...]

Sometimes You Just Gotta Be More Aggressive

Jul 22nd, 2008 | By | Category: General Comments
I had a great day today. Actually, I feel like this could be the best I've traded in the past year. When I woke up this morning I was excited because there were a bunch of stocks that I've traded that had earnings today. And when the market opened, I was all over the place. My alerts were going off all over the place, getting me into trades at levels I knew were good. And then when I was done with one, my next alert went off. So that was my morning. Chop after chop after chop. So after lunch, I was trying to keep myself from giving any of it back. See, unlike our boy CBA, I'm probably one of the more aggressive traders Read more [...]

Blackboxes/Algorithms Nothing to Fear

Jul 22nd, 2008 | By | Category: General Comments, Mike Bellafiore's (Bella's) Blogs
I received a GChat message from a future trader, Carter, who was interested in the impact of blackboxes or algorithms on intraday trading. I have heard Carter's concerns from other future traders. Some believe that blackboxes will rule trading and eliminate the intraday trader. A few thoughts: 1) I have heard this argument for the past 5 years and I am still trading profitably. And our desk just had its best week ever. 2) Blackboxes have made intraday trading more difficult, which is part of the reason why it is imperative in this market to be trained well (think SMB Training, 3) You must be more selective Read more [...]

A Bet That Paid Off

Jul 21st, 2008 | By | Category: General Comments, Steven Spencer (Steve's) Blogs
My primary focus for the past few years has been making money intraday.  But occasionally I observe a pattern that causes me to take an overnight position.  Around 10:30AM on Friday FNM had a very powerful breakout through $12.  It topped out around $14.  During the afternoon there was some selling and it traded as low at $12.40.  But during the final hour a huge buyer emerged and was pushing the stock towards its high.  I was long around 8000 shares.  I was looking to dump the position at $14 or higher.  But the buyer ran out of time and the stock closed around $13.50 and I was still long around 4,000 shares.  So my dilemna Read more [...]

Plays to Add Size

Jul 21st, 2008 | By | Category: General Comments, Mike Bellafiore's (Bella's) Blogs
One of our traders, CBA, made a chop in HON into the Close. And even better CBA got me into the play as well. I like that excellent communication at SMB Capital. CBA is a conscientious trader. He watches tapes of his trading over the weekend (I saw him this very Saturday watching such tapes in our office), keeps a detailed journal, prepares well, works hard to eliminate his weaknesses, etc. He is too conservative. So we have been working with him to selectively become more aggressive. And there was one place where CBA could have added some more size in HON into the Close. But what is even more important is as a trader Read more [...]

She Just Might Say Yes

Jul 20th, 2008 | By | Category: General Comments, Mike Bellafiore's (Bella's) Blogs
Steve and I went to our 20th high school reunion last night.  A few things: 1) they served chocolate chip cookies for dessert and I ate as many as I could until there were no more (delicious!); 2) I witnessed another great example of she just might say yes.  For those on our prop desk in NYC she just might say yes is code for put in your bids and offers.  Place your bids and offers at great prices habitually while you are trading.  You just might get hit on the bid or taken on the offer at very favorable prices.  And as a result you will earn some free money just through this trading fundamental.  At SMB Capital we like Read more [...]

Earnings Season Has Begun

Jul 19th, 2008 | By | Category: General Comments, Mike Bellafiore's (Bella's) Blogs
Our playoffs have begun- earnings season.  This is the time where we as prop traders make most of our money because there is so much price action.  Interestingly, there has been tremendous price action in the financials and energy sector recently before these playoffs.  Hence a dilimena.  What to trade?  Do we stick with the energy and finacials stocks that we have been killing the last many weeks?  Or do we find a stock that has reported on that AM and trade it?  Personally, I lean towards trading a stock with fresh news.  When a stock just reports the price action is so significant that I can get on the wrong side a Read more [...]