Archive for October 2008

Standing in Front of a Freight Train

Oct 29th, 2008 | By | Category: General Comments, Mike Bellafiore's (Bella's) Blogs
I am not sure why but too often traders fade moves like yesterday into the Close. The market bounced over 800 points during the last two hours of trading. I was talking with an experienced trader after the Close and came up with a theory. Traders tend to miss the beginning of bounces. The market has been weak. The market has been volatile. Strong moves have been followed with weak moves. Then they see others around them profiting from the last strong upmove. They want to make some money. There is an instant need to make money. But it is hard for them to get long at these levels. And so they short into any signs of slowing Read more [...]

Last 15 Minutes

Oct 27th, 2008 | By | Category: General Comments
Large movements generally start more than 15 minutes before the Close. The last four trading days we have seen very explosive moves in the last 15 minutes of the trading day. Today we tanked right before the Close. The last two trading days we have seen significant downmoves. The two trading before that we saw significant upmoves. Today in the last 15 minutes SPY dropped from 87 to 84. This is unusually late for such moves. I am not sure why we are getting such large moves so late. But this is something in the back of my mind. I will consider this trading into the Close tomorrow. I was careful trading on the Open. I lowered Read more [...]


Oct 25th, 2008 | By | Category: General Comments, Mike Bellafiore's (Bella's) Blogs
Expectations can be harmful to your trading. We ask all of our prop traders to set goals for themselves. I do for myself. Whether its for my trading or our trading firm. As John Wooden says,"make each day your masterpiece." But goals often for the new trader are incorrectly results based and not process based. And I want to take some time to explain this important distinction. I have noticed that my bounce trading has not been as strong as in the past. And that since we are seeing bounces more often these days I need some work on this. I was taught by absolutely one the best bounce traders in day trading history. This Read more [...]

Answering A Couple of Questions

Oct 24th, 2008 | By | Category: General Comments
Here's a list of blogs I read: Stock Selection: Over the last few weeks I've been sticking mostly to trading AAPL, SPY, and almost any financial that i felt comfortable trading. Stocks that I have also been looking are S&P 500 stocks trading near 52 week lows. I've been focusing on trading them on the short side, since I want to short the weakest stocks in a weak market. Because of the volatility in the market, I've been trading a very small number of stocks. Prophet: I generally use prophet to look at a bunch of different stocks at the same time. I like the chart toppers section. Read more [...]

AAPL Earnings—Oy Vey!

Oct 23rd, 2008 | By | Category: General Comments, Steven Spencer (Steve's) Blogs
As you gain more experience traders develop biases about stocks and where they should be priced. Often this is helpful. At times it can lead to potential rips. As an experienced trader I have learned that my biases must be verified by the Box, the price action in the stock. Who am I to decide where a stock ought to be priced? I am not SAC Capital. And I want to share a story with you on this very point. Please remember your biases must be verified by the price action. AAPL is a stock that I trade each quarter in the days prior to their earning's release and the days that follow. When AAPL is "In Play" it is a great stock Read more [...]

Think About Your Trading

Oct 22nd, 2008 | By | Category: Mike Bellafiore's (Bella's) Blogs
After the Close I was talking with two veteran traders. Both trade with us. Both are very wealthy from years of successful trading. You know how the NBA named its 50 best all-time players? Well one of these traders I describe as one of the 50 best day traders of all time. He actually taught me how to trade. Though as a novice it was a bit challenging following someone with five open positions of 10k shares or more. Both of these traders were sitting around after the close talking about their trading with each other and me. One of these successful traders was a bit disappointed in his day. And he talked about how all night Read more [...]

Weekend Preparation

Oct 20th, 2008 | By | Category: Trading Theory
The past few weekends, I've been coming into the office to prepare for the next week of trading. Generally I do this at home, but when I need to get a lot of work done, I'll come into the office to do it. Since I feel like we're at a turning point in the market, I've been doing some more work. Generally, I'll look over some tape from the past week. I'll look at tape from some of the stuff I traded that week. I'll focus on things I traded poorly, but I also look at stuff I traded well, and try to figure out how I could've traded it even better. This has helped me identify places in trades where I could have been more or less aggressive. Next, Read more [...]

Reversals, Reversals, Reversals

Oct 18th, 2008 | By | Category: General Comments
Friday was a very difficult trading day because the market reversed so many times. Into the Close the market reversed four times. I usually get caught in one reversal a week. I got caught in eight yesterday. I would make a bunch of profitable trades and then a stock would reverse. I got caught in the SPY upmove midday from 94 to 98. It is easy to look back at the intraday chart and see that 94 was support. But I didn't see that move coming. I was pretty loaded playing for a breakdown of SPY below 94, when SPY ticked below 94, and before the 4 point upmove. Ouch. I certainly can think of better ways to spend my lunch hour Read more [...]