Archive for January 2016

The trading mistake I made

Jan 29th, 2016 | By | Category: General Comments
I called out a trader yesterday (Don’t make this trading mistake in Facebook) on a trading mistake and today it’s my turn.Man I messed up in CRUS yesterday.  And here’s why.I missed this very important piece of information in Oppenheimer analyst Rick Schafer’s note :As a result, Cirrus will obtain an average of about $5.50 for each iPhone 7 sold, up from about $3.50 for the iPhone 6 and iPhone 6+, the analyst estimated.Said another way CRUS is in position to experience significantly higher margins on their product suite.  The Street loves companies that are positioned to make more per unit on their core business.  Read more [...]

Do not make this trading mistake

Jan 28th, 2016 | By | Category: General Comments
Trader Frequent Flyer was having another solid day on the month.  He was up near 2k, which for his level of experience and skill was strong.  The trading session ended.  He was up near 10k for the month, with a few days to go. He had just closed out his 5th straight profitable trading session.  And then Facebook earnings hit the tape.  And then he imploded. This is a lesson in determining risk for new strategies. This is a lesson in discipline. This is a lesson in learning from your mistakes. Trader Frequent Flyer has 2k of intraday risk.  Again he is still a pretty new trader on our desk.  He is working on Read more [...]

A Perfectly Ineffective Hedge

Jan 28th, 2016 | By | Category: Free Daily Trading Video
In our SMBU Daily Video, Seth Freudberg explains a perfectly ineffective hedge. Many options traders buy puts in a panic thinking they will control downside risk in their trades We did a study on weekly options and found that they were incredibly ineffective at controlling downside risk over the last year In fact, traders would have made much more money SELLING puts over the last year, which is counterintuitive and something to ponder strategically. * no relevant positions Read more [...]

SMBU’s Options Tribe Webinar: Frank Fahey, Optionvue Systems, International: Trading Volatility Events—building a recurring earnings event portfolio

Jan 28th, 2016 | By | Category: Options Education
This week, Frank Fahey returns to the Options Tribe to discuss his approach to trading earnings events. Read more [...]

The edge is not just in the chart

Jan 26th, 2016 | By | Category: General Comments
During mentoring sessions after the open with our newer traders, I ask each of them what they traded. First up today was a trader who shorted a failed breakout in ENOC.  He likes that chart pattern.  But is that simple chart pattern enough to trade this pattern with edge?  No. There was more to this trade than a failed breakout.  It had run up a bunch yesterday.  It gapped down on the open.  It was holding below VWAP for a significant period of time.  All of this made the failed breakout more likely to work. So was this added information enough to trade this setup with edge?  No. Even with this added information Read more [...]

Market Edges Come and Go

Jan 26th, 2016 | By | Category: General Comments
There are two truths that I've observed about trading over my trading career. 1. Trading edges come and go 2. Great traders last    For these two truths to exist simultaneously, it means that great traders cannot depend on a few edges that currently work. Mike Bellafiore has said many times before that the most important aspect of success in trading is a growth mindset. We see traders struggle to find consistent results because they are looking for just one or two strategies that they can implement to be successful.  The trouble with this is that one or two things may work in a certain market environment -- then Read more [...]

Pre-Market Trade Prep–TWTR TYC SBUX

Jan 25th, 2016 | By | Category: Steven Spencer (Steve's) Blogs
Each morning before the market opens we outline a series of trading ideas. There is a written "game plan" to make it easier to follow along. We identify the best stocks to trade before the opening bell as this puts us in a better position to execute in the heat of the moment. Here is a screen cap of the stocks and key levels discussed in the meeting with charts and comments posted below. First section lists stocks with a fresh news catalyst. Second section are ideas developed from prior trading days' observations. TWTR was "In Play" with four top executives departing. It was gapping lower on the news and we identified to Read more [...]

Selling the dream- I will pass

Jan 25th, 2016 | By | Category: General Comments
I got asked to do a podcast to discuss one of the books I wrote.  I like doing podcasts.I did one with my friend ChicagoSean for StockTwits here.I did one with Chatwithtraders here.I like listening to podcasts.  Soundcloud is an app on my phone, which I frequently use on my walk from the west side to the east side for work. So I go to the podcast’s site to check him out before I agree to an interview.  Basically I don’t want to be affiliated with anyone “selling the dream”, which is harmful to the trading community.  Trading is a performance sport for only the most serious of participants, with talent Read more [...]