All entries by this author

What Do You Need First to Gain Trading Edge?

Jul 18th, 2014 | By | Category: General Comments
I have been listening to a great deal of the Toddler music channel on Pandora so pardon my lyrics. First comes skill Trading Skill! Next comes edge Trading Edge! Then comes trading profits in your head .....And in your bank! Our firm has edge during Russell imbalances.  I was discussing this strategy in theory with our college training class,  exposing them to the different ways traders can find an edge in markets.  One very ambitious student from China asked, "How do they do it?" This is a perfectly acceptable question.  Or is it? I didn't develop this strategy so I cannot share it.  It's not mine to Read more [...]

Creating a Road Map Helped this Trader

Jul 16th, 2014 | By | Category: General Comments
I noticed one of our new traders had a day of out-performance.  I assumed this was his best trading day because of his PnL but it turned out it was his second best.  Still he was near the top of the leaderboard with a very substantial intraday PnL for a new trader- heck for all traders. I asked him what he thought of his trading day in my office. He said he was pretty happy. I asked if there was anything he had done that was particularly instrumental in this outstanding trading day.  There was something.  It is a best practice for you to consider. The trader developed a road map before the open.  He wrote down stocks, Read more [...]

A Focus on Immediately Being in the Money Helped this Trader Improve

Jul 10th, 2014 | By | Category: General Comments
I had a conversation with one of the traders on our desk end of month congratulating him on his improved performance and  inquiring on the reasons for it. We sat in my office and I congratulated him on improving from consistently negative to flat for the month.   Come again Mike?  Why is that something for which to congratulate a trader?  I thought the purpose was to make money? Those of you who read my blog are aware that I view consistently negative to flat as a significant step.  It is.  Most never get here (to flat for the month) as a trader.  Granted we want better than flat, but you rarely see a trader go from Read more [...]

How Do I Simplify My Trading?

Jul 9th, 2014 | By | Category: General Comments
Dear Mr. Bellafiore,  My name is (deleted), and I’ve contacted you in the past. One of our conversations ended up on your blog and eventually made it into your book ( Your responses to my inquiries have always been courteous and insightful, so I’m turning to you once again for some more advice. With the full support of my spouse, I have re-entered the world of proprietary trading. I became completely fed up with the corporate world, and I decided that I wanted to try and take control of my life. The last time I sat on a prop desk was in April 2009, and Read more [...]

Why Don’t You Trade the E-minis?

Jul 8th, 2014 | By | Category: Ask Bella
You mention, "Stocks in Play" a number of times. At the risk of sounding a bit green, I suppose this means stocks that have enough volume and movement to make it worthwhile to trade, correct? If this is the case, I'm wondering why you don't trade the S&P emini? Maybe you do, but I haven't heard you mention it yet and I'm on chapter 8. It's got plenty of volume and movement so it would seem that it fits your trading criteria. Just curious about your thoughts on the ES. Thank you for your help! @MikeBellafiore Yes we trade Stocks In Play because they offer the most opportunity for short term trading.  A cheat sheet Read more [...]

Two Lessons from an Improving Trader

Jul 4th, 2014 | By | Category: General Comments
Hi Mike, I just wanted to take the time to say thank you. A friend of mine recommended your book 'One Good Trade' (so much so he had ordered it for me insisting I read it) and it has not only helped my trading in so many ways, but has also been very inspirational! If you don't mind, a little background about myself. I'm 22 and from the UK, having graduated from university with a degree in Architecture and after having pursued that career path for a little while, I decided it wasn't quite right for me, I'd always had an interest in the financial markets and figured I still had the time and resources to give it my best. I got Read more [...]

Finding and Increasing your Trading Edge

Jul 2nd, 2014 | By | Category: General Comments
One trader on our desk offers a best practice to emulate. This trader had been gross negative 3/4 past months prior to June.  He is a hard worker, focused on the markets, disciplined and well-trained.  He is one of the guys who can make it. Yet, while I wouldn't say it was a large deal that he was not yet positive consistently given his youth to trading others in his class are already consistently profitable.  He could do better. Prior to the start of June, I chatted with him in my office about his edge.  He brought everything else needed to be a CPT. Bella: Where do you have edge? He responded in specificity. Bella: Read more [...]

PnL as the Outdated Trading Stat

Jun 15th, 2014 | By | Category: General Comments
Will PnL be an outdated trading stat one day? Five years ago MLB pitchers were mostly defined by Wins and how many they had. Today this is seen as an outdated stat that does not tell you the real value of the pitcher. Sabermetrics has taught us there are more important measurements of a pitcher's contribution like: percentage of ground balls, percentage of pitches swung at and missed, home runs allowed per nine innings, batting average on balls in play, etc. In the Sabermetrics universe, if you make an argument that one pitcher is better than another based on Wins you are considered an uneducated baseball fan. In trading Read more [...]