Finding the Right Trading Product and Style

Dec 4th, 2012 | By | Category: Mike Bellafiore's (Bella's) Blogs
Share on StockTwits


Mike-Great thought provoking post (The biggest question for a trader) as usual. Is there a way to determine what product and type of trading fits a trader? Does it really take trial and error? Has to be a better way….any insight here?

Thanks

BP

@mikebellafiore

Thxs for reading as always BP.

1) You can take a personality test and use that as evidence of best type of trader For You.  I have done this and actually learned some interesting things about myself.  For example I have the type of personality that likes to sort out the answers to problems myself.  This was very helpful for me to learn as a trader and coach. This also helps me to work better with my partners at SMB.

2) Developing traders want to get there too fast.  Where are you going? Perhaps the biggest contribution we can make as trading educators over the next five years is to better set your expectations.  You are not going to be good for three years.  Yes you can make some money, pay some bills, when you first start, but do not expect immediate financial success.  Too many enter our sport wanting to make a quick hit.  That is just not going to happen.

I write about this extensively in my last book, The PlayBook. The way most bring traders into our sport is completely wrong.  Careers are being ruined before they start.  I offer a solution, which my publisher will appreciate me saving.  But I ask you not to be in a hurry with your trading career.  Yes there are things we can do to speed up your learning curve and get you into the right product, but take a deep breathe please.  Great traders enjoy the journey.

3) What is wrong with a whole mess of trial and error?  Let’s take a young basketball player.  He might start as a Power Forward, then shift to Small Forward a bit later and maybe even to Point Guard as he matures.  But the play at PF helps him as a PG.  It wasn’t a waste.

Let’s expand this to a young athlete.  When we grow up we play multiple sports.  It was not until my Junior Year in HS until I quit one sport to focus on the other two.  It was not until college when I narrowed my choice to baseball.

Why aren’t we trading different products and markets, and learning and making errors and tweaking to in the end become our best trader?  It is because we want to get somewhere so fast.  Where are you going?  Nothing great is accomplished quickly.  Maybe an above average intraday trader quickly is worse than as an options trader slower and later For You?

I really enjoyed your question.  Keep working on your trading game!

Bella

One Good Trade

Tags: , , , , , ,
  • Nick

    Thanks for the post Bella.

    I am sure you have seen many new traders maturing in SMB to become consistent, experienced traders.
    What resulted in the faster growth of some traders compared to others? (e.g. Was it by chance that one of the early trading styles they tired suit them? Or because of somethings that they do differently from the rest?)
    What are the best ways to accelerate/shorten the learning curve of a new trader?

    Hope to hear from you on this.
    Thanks.

    -Nick

  • Jocelyn

    Thanks for the great posts and wise words again Mike.

    It’s absolutely true that as a new trader. there is always the urge to push. For me personally, I keep thinking that I’m not improving quickly enough… It’s good in that it keeps me motivated but too much can be discouraging too, it’s like leverage in a sense. So if I catch myself doing it, I always try to remind myself that I have already made progress from a week ago, a month ago, and as long as I keep moving forward, I’ll get where I want to be eventually.

    And if I may hazard a guess to Nick’s question, I believe it’s just the difference in the amount of work put in. It’s like when I learned golf, basically it’s just hitting tons of balls, everyday, all day. That’s the quickest way to progress at the beginning. I tape this to my monitor [100X = X; 100 as it feels like 100 more than 10 personally...], but with the goal of eventually turning it into X = 100X with the power of 10/10/10.

  • Bruss Bowman

    Mike,

    Excellent, thought provoking thread.

    Some thoughts from here:

    When you first start out, there is *no* way to know what kind of trader you are or what asset classes best meet your objectives. You are *so* ignorant that you can’t even fathom what you don’t know yet. The only way to find out is by exposing yourself to a wide array of knowledge, traders, trader style and asset classes…..go out and get as much knowledge as you can. What I’ve found is that most of the very *best* traders out there are humble to the core and *very* willing to share what they know and pay forward their abilities and knowledge. My personal opinion is that this humility comes from those that are far along the path of trading and know first hand just how incredibly hard it is. Run from those who tell you how great they are and how easy trading is, if you just follow them and a *few*, *simple* rules.

    In the beginning you also don’t know if you have the internal desire to trade. Trading is not for everyone. It’s crazy-hard and there are much easier ways to make money. If your desire to trade is driven by a desire for *easy* money, if you can’t handle a serious a** whipping, if you don’t live, eat, breathe, sleep trading and a process of continual (and never ending) improvement, if you’re not committed with all that you have and all that you are…then do yourself a favor and quit right now and go do something else.

    Trading ultimately becomes very simple (at least the rules become simple), however the path to that simplicity is anything but. After you get a wide array of knowledge and distill the information and determine who and what you are as a trader (a long process) when *you* and your *playbook* become inseparable to the point you don’t know where one begins and the other ends, then and only then does it become simple. Yet even in that simplicity there is another even more challenging task, execution. You have to turn all that knowledge into action and that has it’s own set of issues. Working on executing rules flawlessly and tweaking rules to meet current market conditions is where I am personally and it’s every bit as hard as the 1st stages of trading.

    Trading ultimately is an exercise in self knowledge…..the market is what it is, independent of your thoughts, wishes or desires. It is who you are and your ability to be present with the market, to follow its lead, regardless of outside influences that, IMO, determine success. Ultimately you have to follow your own path…it is following the path and process that is the ultimately destination, the holy-grail if you will.

    Like Robert Pirsig’s classic, ‘Zen and the Art of Motorcycle Maintenance’, in the process of trading as in maintaining a motorcycle, the *real* thing you are working on is yourself.

    #Food4Thought

    ….all that pedantry and I didn’t even talk about what/how I trade and why :-)

    ..that’s subject for another post.

    Best,
    Bruss

  • Bob S

    After reading I found a test and took it. Nailed my rut as a detailed trader and a strong caution on how this must be overcome. It was right on that I am more observant of my errors vs. my qualities as a trader.

smb newsletter
Options Risk Disclaimer    Forex Risk Disclaimer

1. SMB TRAINING is NOT a Broker Dealer. SMB Training engages in trader education and training. SMB TRAINING offers a number of products and services, both electronical (over the internet through smbtraining.com) and in person. SMB TRAINING also offers web-based, interactive training courses on demand.

2. The seminars given by SMB TRAINING are for educational purposes only. This information neither is, nor should be construed, as an offer, or a solicitation of an offer, to buy or sell securities. You shall be fully responsible for any investment decision you make, and such decisions will be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance, and liquidity needs.

3. This material is being provided to you for educational purposes only. No information presented constitutes a recommendation by SMB TRAINING or its affiliates to buy, sell or hold any security, financial product or instrument discussed therein or to engage in any specific investment strategy. The content neither is, nor should be construed as, an offer, or a solicitation of an offer, to buy, sell, or hold any securities. You are fully responsible for any investment decisions you make. Such decisions should be based solely on your evaluation of your financial circumstances. Such decisions should be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance and liquidity needs.

4. SMB Training and SMB Capital Management, LLC are separate but affiliated companies.

5. No relevant positions

6. Please note: Hypothetical computer simulated performance results are believed to be accurately presented. However, they are not guaranteed as to accuracy or completeness and are subject to change without any notice. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Since, also, the trades have not actually been executed; the results may have been under or over compensated for the impact, if any, of certain market factors such as liquidity, slippage and commissions. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any portfolio will, or is likely to achieve profits or losses similar to those shown. All investments and trades carry risks.

Log in | 80 queries. 1.377 seconds.