Archive for March 2012

I See Momentum Buying

Mar 29th, 2012 | By | Category: General Comments
I settled at my trading station wondering what to trade on this Open.  RHT? BBY? AMLN?  There had not yet been a price spike on the SMB Radar in health care yet but I would later ask what and where to buy for that sector.  BBY showed some consistent selling at 25 so I scalped that down to 24.60 on small size.  What to trade?  What to trade? I loved the AMLN Second Day Play near 23, an important level from yesterday.  Yesterday AMLN was In Play, could not get above 23, and then did with a nice push in the closing hour.  A pullback to near 23 was an A+ Second Day Play.  I placed a bid at 23.03 and just missed a fill.  Read more [...]

My Thought Process: AMLN

Mar 29th, 2012 | By | Category: General Comments, Steven Spencer (Steve's) Blogs, Trader Development
We received a few requests for a trade review of the AMLN trade I was tweeting during today's Open. I've illustrated my key thoughts via the annotation of the chart below. Let me outline some of the "bigger picture" considerations that are not covered by the chart annotations: It was reported that AMLN received a $3.5 billion takeover bid which they had rejected. A rejection of a takeover bid will put a company "In Play" and often brings other potential bidders to the table willing to up the ante above the original takeover price. The reported bid works out to about $23.75 per share. The fact that AMLN was trading up to that Read more [...]

Trading Equities versus Eminis

Mar 28th, 2012 | By | Category: Bruss Bowman, General Comments, Guest Blog, Traders Ask
Eminis are futures contracts for various indexes, commodities and currencies. Eminis have their own trading personalities just as equities, and just as GOOG trades differently than WMT, each of the Emini contracts has their own trading personality profile. There is no *right* market to trade just as there is no one trading style that meets the needs of all traders and market conditions. IMO one of the first keys to being a consistently profitable trader is knowing yourself, your own risk tolerance, strengths and weaknesses. Once you have that knowledge you can build a trading methodology and universe of trade assets that are Read more [...]

The Market Discriminates Against the Over-thinker and Ill-prepared

Mar 28th, 2012 | By | Category: General Comments
Hi Mike, Never wrote you, thought I would try. Had a question. In much of what I see, read, etc., there seems to be a focus there on recruitment and somewhat of a preference to younger people as new traders on your prop desk. PLEASE note that I am not looking for an age discrimination claim here, lol. It's just that I've noticed somewhat of a bias to that. Perhaps my assumption is wrong. If not--in an attempt to answer my own question--my assumption is that it is a) younger means not old enough to develop bad habits (i.e., less baggage the better) , b) younger means a somewhat more naive brazen-type of attitude, which due Read more [...]

Is This Trader Complacent or Patient?

Mar 27th, 2012 | By | Category: General Comments
Bella, How do you distinguish between patience and complacency? Patience is what I call it when I'm riding a trend. Complacency is what I call it when price initially goes my way, but then retraces and eventually stops me out. This happens to me most in two cases. In these cases I feel as though more aggressively taking profits would have helped. This happens to me most often when fading a lower high or the top of a consolidation range: I sell the high looking for a move below the bottom of the range. Instead of covering my short at the bottom of the range I hold for a move lower. The upper range gets tested several Read more [...]

Introducing a new blogger: Greg Loehr

Mar 27th, 2012 | By | Category: General Comments, Options Education
SMB is proud to announce the addition of an  experienced options trader and educator to our blog, Greg Loehr, of Greg has  served both as a market maker on the floor of the CBOE as well as a proprietary trader  for various firms  prior to his founding Greg has also been a repeat  guest on SMB's Options Tribe. Greg will be blogging about various options strategies with a focus at first on the broken wing butterfly strategy. In fact, SMB is partnering with Greg to develop a training program for the broken wing butterfly trade that he has presented on the Options Tribe Read more [...]

Playing the Quarterly’s on the SPX

Mar 26th, 2012 | By | Category: General Comments, Options Education
This post is the first in a series that we will be publishing over the next month , tracking the hypothetical performance of broken wing butterfly trades selected by Greg Loehr of With the end of the quarter fast approaching there are two thoughts in my mind: quarterly window-dressing and a potential slowdown in China. For the next week, which is going to dominate and move the market? No one likes to lose when they’re wrong on the direction of the market, but if you’re strictly picking higher or lower over the next week, then I say you have about a 50-50 chance of making (or losing) money. But what Read more [...]

Everything You Wanted To Know About Visualization and Trading, Part 3

Mar 25th, 2012 | By | Category: Bruce Bower, General Comments, Guest Blog, Trading Psychology
Everything You Wanted to Know About Visualization And Trading, Part 3 See Part 1 See Part 2 In the first two parts of this series, we used a variety of visualization techniques to simulate good trading. In this third and final part, we are going to use the same advanced visualization techniques, but in different ways that can also serve to help our trading. Rather than simulating good trading, we are going to use visualization tools for new purposes: to undo bad trading results; to manage emotional states; to set goals for the future. Visualization Basics We know that visualization works because your brain equates Read more [...]