Steven Spencer (Steve’s) Blogs

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Questions on Consistency and Scalability

Jun 17th, 2013 | By | Category: General Comments, Steven Spencer (Steve's) Blogs
Steve- Thank you for a great presentation on Tesla last week. I subscribed to the blog for a few months now, but your class was my first real exposure to SMB. It is refreshing to come across a professional trader, not just a professional instructor. I have a couple big picture follow-up questions from the class I hope you will clarify: You mentioned you take about 40 trades per day roughly. Do you mean 40 distinct trades with multiple entries/exits. Or is it closer to about 5-10 trade setups and multiple entry/exits increase the trade total to 40 or so? You mentioned that consistency and scalability are two major criteria the firm considers when evaluating traders. What is consistent and Read more [...]

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Recording: Training Session with Steve Spencer: Three Trades on TSLA

Jun 11th, 2013 | By | Category: General Comments, SMB on TV, Steven Spencer (Steve's) Blogs, Technical Plays, Trade of the Week, Trading Lesson
The price action in TSLA from the past several trading days does a nice job of demonstrating three distinct types of trades. Not all trades makes sense to all traders. But if you can figure out which of these trades fits your personality best and then build a detailed trading plan on how to attack it next time it occurs you can start to improve your consistency. Trade 1 (May 23): Consolidation Break Swing Trade Trade 2 (May 29): Momentum Reversal Trade Trade 3 (May 29-May 31): The Range Trade If you missed this presentation yesterday, where Steve went over in more detail the execution of these trades, you can watch it now. The cost of the recording is $19.95, with proceeds going to the Read more [...]

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Training Session with Steve Spencer: Three Trades on $TSLA

Jun 10th, 2013 | By | Category: General Comments, Steven Spencer (Steve's) Blogs, Trading Lesson
The price action in $TSLA from the past six trading days does a nice job of demonstrating three distinct types of trades. Not all trades makes sense to all traders. But if as a trader you can figure out which of these trades fits your personality best and then build a detailed trading plan on how to attack it next time it occurs you can start to improve your consistency. Most of the experienced traders Bella and I have interviewed over the years who are struggling do not have a well defined playbook and this is the primary cause of their widely varied results. Trade 1 (May 23): Consolidation Break Swing Trade Trade 2 (May 29): Momentum Reversal Trade Trade 3 (May 29-May 31): The Range Trade Today, Read more [...]

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One Stock, Three Trades: $TSLA

Jun 5th, 2013 | By | Category: Steven Spencer (Steve's) Blogs, Trader Development
(This post was written on June 1, 2013) The price action in $TSLA from the past six trading days does a nice job of demonstrating three distinct types of trades. Not all trades makes sense to all traders. But if as a trader you can figure out which of these trades fits your personality best and then build a detailed trading plan on how to attack it, next time it occurs you can start to improve your consistency. Most of the experienced traders Bella and I have interviewed over the years who are struggling do not have a well defined playbook and this is the primary cause of their widely varied results. Trade 1: May 23 -- Consolidation Break Swing Trade. After three hours of consolidation Read more [...]

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Trade Review: $DDD

Jun 3rd, 2013 | By | Category: SMB on TV, Steven Spencer (Steve's) Blogs, Technical Plays
This trade review video of DDD discusses a "momentum reversal" short trade Steve made on May 14. To watch the video please sign up below: If you would like Steve Spencer's Trade Review videos to arrive directly to your inbox as they become available, please subscribe HERE.   Steven Spencer is the co-founder of SMB Capital and SMB University and has traded professionally for 16 years. His email is sspencer@smbcap.com. No Relevant Positions Read more [...]

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My Thought Process: $SPY Selloff

May 22nd, 2013 | By | Category: Steven Spencer (Steve's) Blogs, Trader Development, Trading Lesson
One type of price action that puts me on alert for a hard down move in the market is unusually large gyrations in quick succession. That is what is what we saw during the first few hours of trading today. Points 1&2 on the chart show up and down moves larger than the ATR of the SPY. This type of signalling usually occurs on the daily time frame. For a good higher time frame example check the SPY chart from January 2010. Point 3. The SPY was at 167.80 and sellers started to take control as the pattern of higher lows was broken. At this time SPY 167 Puts were being purchased. Point 4. More traders on the desk jumped into the SPY short. Point 5. The short trade is working Point Read more [...]

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Trade Review: $RAX

May 20th, 2013 | By | Category: General Comments, SMB on TV, Steven Spencer (Steve's) Blogs
To receive Steve's Trade Review videos via email as they become available, please sign up below. You will receive his latest trade review on $DDD where he discusses a "momentum reversal" short. Steven Spencer is the co-founder of SMB Capital and SMB University and has traded professionally for 16 years. His email is sspencer@smbcap.com. No Relevant Positions Read more [...]

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A Well-Priced Deal: $DDD

May 17th, 2013 | By | Category: Steven Spencer (Steve's) Blogs, Trader Development
Publicly traded companies sometimes choose to raise capital by issuing more shares. This allows them to have more working capital without the burden of taking on debt. The better run companies tend to do “secondaries” (according to Wikipedia “secondary” is a misnomer and this type of deal is a “follow on” offering) when their stocks have run up quite a bit. By issuing new shares when their stock is at higher levels they can raise more capital with less dilution to current shareholders. As short-term traders we can profit from these secondaries in several different ways. The first is by receiving an “allocation” from the underwriter in a secondary, which if priced “correctly” Read more [...]

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Trade Review: $CLF

May 13th, 2013 | By | Category: SMB on TV, Steven Spencer (Steve's) Blogs, Trading Lesson
In this video snippet from the May 10th morning meeting I discuss a Second Day Play in CLF that was traded the prior day and advise our traders to look for this setup again. To watch the video please sign up below: If you would like Steve Spencer's Trade Review videos to arrive directly to your inbox as they become available, please subscribe HERE.   Steven Spencer is the co-founder of SMB Capital and SMB University and has traded professionally for 16 years. His email is sspencer@smbcap.com. No Relevant Positions Read more [...]

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My Stupid Trade in $QIHU

May 11th, 2013 | By | Category: Steven Spencer (Steve's) Blogs, Technical Plays, Trader Development
A few days ago my trading clerk asked me to take a look at QIHU. It had exploded above its ATH on heavy volume. I didn't take a trade in it on Day 1 but made a note of the 36.50 pullback low after its Opening Drive. On Day 2 after a stock has broken out I like to get long if it consolidates above this level. On Day 2 I got long a quarter position at 36.65 in the late afternoon as it was clearly being bought above the 36.50 support. I was risking about 20 cents on the position with the intention of swinging it for the next leg higher. From a measured moved perspective if it broke out from the Day 1 high a reasonable target would be around 40.60. On Day 3 it opened flattish then drove up Read more [...]

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