Archive for September 2009

Getting Rewarded for Doing the Wrong Stuff

Sep 22nd, 2009 | By | Category: General Comments, Gilbert Mendez's (Gman's) Blogs
We teach our traders how to trade while taking little risk in the marketplace. We teach them the fundamentals and then allow each trader to develop a trading style that suits their personality. Further, we give each trader the freedom to trade whatever stock happens to be in play and in a fashion that suits their style. Unfortunately, this allows for some funky/fancy trading by some. Often these fancy traders are rewarded big for doing the wrong things and this scares me. Let me explain. We emphasize finding opportunities where the risk is one unit and the reward is at least five units. Some of our traders have developed a style Read more [...]

Reading the Tape Syllabus

Sep 21st, 2009 | By | Category: Gilbert Mendez's (Gman's) Blogs, Reading the Tape
We have gotten some comments and emails from some fellow readers asking what is included in our Reading the Tape program so we prepared this syllabus. SMB Reading the Tape Syllabus DAY 1: The Basics The Basics 1. Two quick written lectures on The Level II and The Prints including a Glossary. 2. One 15-minute audio lecture on the Prints complimenting the written lecture. 3. 1 hour and 15 minutes of video lectures on The Level II and the Prints. 4. Multiple-choice quiz to reinforce your knowledge on the Basics: The Level II, Jargon, and Prints. The Indicators 1. Four written lectures on the Reading the Tape indicators 2. 5-minute Read more [...]

The Cost of Fading Strong Stocks

Sep 21st, 2009 | By | Category: Mike Bellafiore's (Bella's) Blogs
Into the Close I sit, trade, and also must watch what our traders are doing on my Admin screen.  It is my job to make sure they are not violating market fundamentals.  And I saw this on a few trader's screens: -1000 AIG -1600 AIG This is an example of breaking a market fundamental.  We do not short strong stocks.  Let's discuss why. 1) There is more money buying into pullbacks and then selling the new highs. 2) You take yourself out of the game by shorting, watching AIG trade higher and then getting pissed at yourself for doing something so stupid (for lack of a better word). 3-10) See answer 1. If you short Read more [...]

StocktwitsTV – Live From the SMB Classroom with Bella

Sep 20th, 2009 | By | Category: General Comments
Tonight, SMB Capital's Mike Bellafiore appeared on StocktwitsTV to pick up where he left off last week discussing "A Trader's Day" and the things traders need to do each and every day to become successful. Click here to watch the clip. Mike appears on StocktwitsTV every Sunday at 8:30pm so be sure to tune each week to watch the show. Read more [...]

Trading AND…

Sep 19th, 2009 | By | Category: Mike Bellafiore's (Bella's) Blogs
IEL sits at his trading station staring at his screens ready to pounce. GMan sits at his much larger trading station (he is the Head Trader) watching every tick in the market, with his hands on his keyboard. Scuba sits patiently processing every bid and offer in ARNA (even though he is a Partner). And then some others trade AND answer emails or trade AND play their new favorite video game. Those others are under-performing and there is no secret why. Being an elite intraday trader requires doing the thousands of little things. Things that have nothing to do with creating a brilliant new trading strategy, or predicting whether Read more [...]

Premarket Volume a Tell- DNDN

Sep 18th, 2009 | By | Category: General Comments, Mike Bellafiore's (Bella's) Blogs
Last night I went out long DNDN.  At 8:30 AM I was down a cool $80 on my position.  Not exactly something for which to put down my breakfast Cliff protein bar. DNDN had cleared an important resistance level on Thursday at 27.50.  It closed still in an intraday uptrend and 80c from its intraday high at 28.75.  Stocks like DNDN offer the possibility of gapping up after a day like Thursday.  So I went out long. Steve started our AM Call and mentioned DNDN as a stock to watch today.  During the call DNDN went high bid 29.25.  Hmmm.  Then DNDN went high bid 29.33.  Hmmm.  I sold 100 shares.  Then DNDN went high bid again Read more [...]

The Little Things

Sep 17th, 2009 | By | Category: General Comments, Steven Spencer (Steve's) Blogs, Trading Theory
LVS has been on SMB's radar for the past couple of weeks.  It made a nice run from 15 to 20.  Yesterday, it showed signs that it was going to give back some of its recent gains.  It sold off hard from 20 to 18.50.  Gman, our head trader, was short it for most of the afternoon.  He identified some unusual selling at 19.70 before it made its final down move to 18.50.  We highlighted LVS on our Stocks In Play call this morning and tweeted it as our best trade idea. Then why did less than 10% of our desk capitalize on this great trading opportunity?  Perhaps they were looking at the triple leveraged ETFs or some of the other Read more [...]

Learning Order Flow and Tape Reading – TraderFeed

Sep 17th, 2009 | By | Category: General Comments
Dr. Brett Steenbarger, respected market psychologist, recently wrote on TraderFeed about the importance of Reading the Tape for short-term traders. In his post, he says that "Reading the tape is key to getting in and out at good prices." And, "For experienced tape readers, knowing prices where large orders have come into and out of the market can also be useful in market near-term support and resistance." In his post Dr. Steenbarger also highlights SMB's new tape reading program. You can read the full post here. Read more [...]