Archive for May 2011

The Trading of Past Trading

May 31st, 2011 | By | Category: Mike Bellafiore's (Bella's) Blogs
Dr. Andrew Menaker, noted trading psychologist, and I spoke briefly on the phone today about a lecture he will give to SMB. He asked for topics. I gave one and then another which I am pretty sure gets undercovered. We talk and write often about trading on tilt. That state of mind where your judgement is impaired, literally, and you turn a bad few trades into a bad month in a few hours. But I see something else not quite trading on tilt that causes traders to throw away thousands per month. I will call it the trading of past trading. Today sitting behind a Newb I watched as he prepared to buy support in an MOS pullback. Read more [...]

Legging out of a winning options spread

May 31st, 2011 | By | Category: General Comments, Options Education, Seth Freudberg's Blogs, Trading Lesson, Trading Theory
Nothing is more frustrating to an options spread trader than working a trade for 30-60 days, using all of your skills and knowledge to initiate, adjust and improvise to position the trade for a nice win and then, on the day you have decided to exit and pocket that   profit,  you run into execution problems. There is nothing quite  like watching the  substantial  profit  that you thought you were going to lock in,  turn into a tiny profit or even a loss on the day you planned to exit, causing all of the work of your last 30-60 days to  go down the drain. And there is no options spread trader out there who has not experienced Read more [...]

SMB Morning Rundown – May 31, 2011

May 31st, 2011 | By | Category: Trading Ideas
The SMB Morning Rundown highlights the key levels in the Market and the best trading setup that we have identified for the Open. Read more [...]

Traders Ask: Why Can’t I Trade the Open Better?

May 28th, 2011 | By | Category: Mike Bellafiore's (Bella's) Blogs, Traders Ask
Hi Mike, I'm a developing trader with a full-time job. Fortunately, I live on the west coast which affords me the first two to three hours of the day and my entire evening(!) to devote to trading and studying, respectively. Unfortunately, the setups I have the most success with often develop too late in the morning for me to see them through before I must leave for work. So lately I've been really trying to improve my performance on the open. That said, I wonder if you could talk a bit about how (or how not!) to trade the open while still managing risk in the conservative manner that SMB espouses? I find that taking a Read more [...]

Options Tribe – Free Webinar

May 27th, 2011 | By | Category: General Comments
Tuesday, May 31, 2011 SMB's Options Tribe is an online community of options traders dedicated to sharing successful options trading ideas with all of our members worldwide. Each week the  community  will meet online for the primary purpose of watching live presentations made by outstanding  veteran options traders and experts in the world of options trading.  This week we'll be probing into how we can utilize options analysis software to find ways of identifying potentially profitable options trades and scanning for ideal candidates for options strategies that we wish to employ Title: The Options Tribe Date: Tuesday, Read more [...]

Traders Ask: How do you play a breakout trade?

May 27th, 2011 | By | Category: Mike Bellafiore's (Bella's) Blogs, Traders Ask
Hello Mike, An appreciative follower here. There’s this question that has been floating in my head. I’m reaching out to you for abetter answer. When do you pay for breakout plays out of a range or through a key resistance? Do you: 1.       get in earlier at a better price anticipating the breakout 2.       hit the offer as soon as the key level breaks 3.       sit back on the bid waiting for a pullback from that breakout Now I understand that it all depends on the trade or confidence in the trade. But how do you measure that? Here are the things I personally identified: 1.       Market Read more [...]

Take your gifts when you get them

May 27th, 2011 | By | Category: General Comments, Options Education, Seth Freudberg's Blogs
For butterfly traders like myself, there are scenarios that occur where a trade can appreciate very quickly. This can happen for several reasons. One of the very common causes of this phenomenon is when the trade is initiated in a high volatility environment and then the volatility is removed from the market rapidly.  In other cases the market simply channels for the first week or so of the trade, and with a little bit of help from a drop in implied volatilities, it is not uncommon for a butterfly trade to appreciate 10-18% in the first 7-14 days, of a 30-35 day trade. In these scenarios, it is important not to get greedy. Read more [...]

A trading day ruined

May 27th, 2011 | By | Category: General Comments, Mike Bellafiore's (Bella's) Blogs
Ever go from having your best day ever to negative?  Below is a recap of one such experience. Big Baby did a wonderful job of analyzing his trades from yesterday.   He was frustrated that he went from his best day ever to negative. I thought we would share his post trade review.  The only way to get better as a trader is to work at your craft. Bella, Today I was having a great day early on.  I was trading well, focused, and felt like I was seeing everything really well.  My PNL reflected that.  Then, in a couple of trades everything changed, and I ended the day much worse than it should have been.  I have attached Read more [...]