Mike Bellafiore’s (Bella’s) Blogs

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Should I Use Fibonacci Levels?

Jun 16th, 2013 | By | Category: Mike Bellafiore's (Bella's) Blogs
Mike, I'm wondering if you can answer a question that I have given some thought for some time. Do you find Fibonacci retracement useful? Has it worked for you or SMB in the past (and beyond what could be from simply random chance)? I can't find any studies with RELIABLE statistical analysis. Good luck tmrw! Thanks for your time. @mikebellafiore I do not use Fibonacci levels. GMan will (see passage below). Most of the traders on our desk do not. But some use pivots. There is no right answer to using or not using them. Some swear by them others do not use them. We teach all of our traders to consider long-term and intraday technicals with each Read more [...]

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How Reading the Tape Helped Me Play the Bounce in LULU

Jun 15th, 2013 | By | Category: Mike Bellafiore's (Bella's) Blogs
Dear Sir, It is great what you are doing at SMB. Caught some glimpses of it on Wall Street Warrior and some YouTube videos. Also, I have read your first book. Thank you for opening up your world to wannabe traders like us. It is an awesome treasure. I do have a question. I have been learning reading the tape for some few weeks now. Nevertheless, I am still puzzled about a few things. However, I think getting an answer to this question will help clear my vision. When you watch the tape, what is (are) the question on your mind? What specifically are you watching out for? Most especially when you see big bids thrown left (on the bid) right (on the offer). Thank you sir for a kind consideration Read more [...]

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A Recommendation for a Trading Psychologist

Jun 14th, 2013 | By | Category: Mike Bellafiore's (Bella's) Blogs
Bella, I really enjoyed One Good Trade and I'm excited to get my hands on my pre-ordered copy of The Playbook. I've been looking at the markets my whole life (got a solid 20 shares of INTC from Grandma when it was at 10) and began trading at a prop firm right out of college. This was in summer of 2008, and after eight months and multiple rounds of layoffs I and the other remaining three traders decided it was not going to be something we could pursue at that time. From there I went onto a fund where I continued to paper trade and started working on attaining my CMT. Basically I took the demons that I had and disguised them under the auspice that I needed more education to "show the market Read more [...]

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Why I Bought TSLA Today at 98

Jun 10th, 2013 | By | Category: General Comments, Mike Bellafiore's (Bella's) Blogs
I sat down at my trading desk at 7:45AM and noticed TSLA was down off of the negative article in Barron's, near a nice technical level at 98, and I bought it. I shared this with the trading community. As TSLA started to work from this 98 level I added. I shared this with the trading community in real time. As TSLA approached my target of 102 I scaled out of half of my position. I shared this with the trading community in real time. Last week TSLA acted very well and showed me strength into Friday's close. The Barron's article provided me with a buying opportunity in a strong stock. When a stock has been strong, buying on a negative news article at an important technical level Read more [...]

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Were You Too Bearish After the Jobs Report?

Jun 9th, 2013 | By | Category: Mike Bellafiore's (Bella's) Blogs
Were you too bearish after the jobs report this Friday? Let's set up the scene for Friday's trading.  We had bounced from 160 SPY to 163ish before the report.  Then the pundits and traders began to battle at the 163.50 level.  At first it appeared the buyers had won sending the market towards 164 SPY, but as traders we knew this was an important technical level.  So a move up to here was not yet confirmation it would be a trend higher day.  We needed to clear 164 SPY as well.  SPY seemed to double top just in front of SPY 164 R (resistance) and then broke below 163.40, a level it failed to crack multiple passes on the open.  Was this a shorting opportunity? On most trading days Read more [...]

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Trading Off of Levels: How a Real Trader Works

May 18th, 2013 | By | Category: Mike Bellafiore's (Bella's) Blogs
There is this developing trader, who sends me a summary of his trading at the end of every week. I asked him to do this so I have data on whether we should hire him for the desk. He's not quite ready but I love to see his progress. Mostly I want to see how he handles success and failure and how he rehearses, practices, and thinks about his craft. In short, mostly I want to learn if he fits our culture. Guys who do and who have a passion for trading are worth my time and capital. The Financial Media Entertainment Complex paints a trading/investing game of picks and predictions. In the real trading world real traders struggle, lament, tweak, re-tweak, and search for improvement. The email below Read more [...]

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The Swing Trader’s Breaking News Dilemma

May 12th, 2013 | By | Category: Mike Bellafiore's (Bella's) Blogs
Hi Mike, I am a beginning stock trader. As I have another job to support me during my learning curve, I cannot trade intraday and instead I focus on swing trades that can last a couple of days. My problem is that during those couple of days, you can have all kind of news that can reverse the trend and make the trade fail. What I am struggling with is when to change my initial plan and when to just leave the trade with its initial stop loss/target profit? (I can amend a trade just after the open and a bit before the close.) BTW, I loved you book! Before that I didn't know there was a difference between a prop trading firm and a hedge fund :-). And also, it's good to know what the benchmark Read more [...]

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How Do You Think This Trader is Doing?

May 12th, 2013 | By | Category: Mike Bellafiore's (Bella's) Blogs
Good evening Bella! I wanted to fire off a quick email to you, and if you had time to respond or post it, I would greatly appreciate it. I just need some input from someone who has observed intraday traders for years, to gauge where I'm at. I started prop trading last August, so it's been nine months. Before that I had dabbled in the markets with a focus on daily charts and pattern recognition. I do a lot of the "hustle plays", i.e., archive trades, trading journal, go thru charts, news, etc., and that all adds up to lots of time. OK, since last August I haven't made money. August thru December was consistent losing. I climbed a big mountain back so far this year, and am basically at break-even  Read more [...]

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How Do I Trade the Breakout Trade Better?

May 12th, 2013 | By | Category: Mike Bellafiore's (Bella's) Blogs
Below is an email exchange between me and an SMB Reader, who is a pretty good trader. We discuss how to improve his Breakout Trade attack. This blog post ends with related past posts. SMB Reader Mike, The Thursday after you visited the big CT hedge fund you very briefly mentioned, "They play all breakouts the same way, paying up over levels." It's been replaying over and over in my mind lately. Is the risk the breakout level? @mikebellafiore Yes. You want the stock to work, move away from the resistance and hold above the breakout price. Trade well. SMB Reader Mike, Is there a "last thing" that traders have to push through to get there? I feel like it's at Read more [...]

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The Technology Edge of Proprietary Trader Steve Austin

May 11th, 2013 | By | Category: Mike Bellafiore's (Bella's) Blogs
CNNMoney came to visit us this week to do a spot on our desk's NEW technology edge.  I am the guy showing off the balding back of my head.  You may have read recently about our JV with KTG in Midtown NYC of late that breeds this new technology edge.  I wanted to explain in more detail the importance of this technology edge during this most opportunistic era of discretionary proprietary trading.  It will make all the difference for your trading. I keep hearing that many in proprietary trading are struggling.  A good example of this is Tier 1 prop shop firing many of their traders recently.  (We are hiring by the way.)  There will be markets where we should struggle as traders (2002). Read more [...]

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