The trading exit is not what you want but rather what it should be

May 9th, 2017 A trader read yesterday's post Expectations poison good trading and remarked: I would like to focus on this savvy reader's observation: "I've sometimes used the standard of what I WANT the market to do. (how ridiculous is that!)" Well.... from my seat it is not too ridiculous at all.  I have been guilty of this.  I have seen profitable traders guilty of this.  I have seen many experienced traders particularly guilty of this.  It is a common trading mistake. So the good news is you are in good company making this trading error. But the proper exit is not what you want, but rather what the exit should be. For Read more [...]

Expectations poison good trading

May 8th, 2017 What is the market doing?  And how can I participate, while controlling my risk/reward?  Those are constructive questions to ask, while hawking markets. Even profitable traders can forget to focus on these questions. I had a conversation with a top trader, with whom I work, who recognized he was projecting expectations into this trading.  His month was off to a slow start.  It could have been better.  But he was getting in the way.  This trader thrives by being aggressive, but he also needs to be patient. This trader had thoughts about how markets would trade before and after the French election. This Read more [...]

It’s hard knowing the right trading process to follow

May 5th, 2017   I had lunch with a candidate for our September training class, who asked a really good question: "How did your past in sports and law influence your path as a trader?" Answer: Process To become successful in the past, I needed to follow and trust the process.  To be successful as a new, developing and even experienced trader you must trust and follow the process. Admittedly, the challenge for many in the trading community is following the right process for you.  And sometimes it's hard to know if you are following the right process as a trader. For example, a trader from another prop firm sat down with Read more [...]

Build trades around the direction of the real trade

May 4th, 2017 In a monthly review, a promising trader found an important area of improvement: build trades around the direction of the real trade.  The trader in his monthly review wrote: Before the Open yesterday, our top trader was fielding trade ideas from junior traders on his desk.  One junior trader offered an idea that was dismissed by the top trader.  He counseled, "The news is not good enough to be interested in that stock."  This top trader wanted something that could soar or dive intraday to make it worth his attention.  Looking at the big picture for this opportunity, it was not big enough. I was chatting with Merritt Read more [...]

Is it bad to sell options premium in low volatility times?

May 4th, 2017 In this video, we review the myth that trading in low volatility times is unfavorable. Most options traders complain when volatility is low because they are getting paid less well for options risk. But the evidence seems to show that low volatility times are actually more profitable than high volatility times. Read more [...]

5 trading lessons from monthly reviews

May 3rd, 2017 At the end of each month, firm traders are encouraged to complete a monthly review of their trading.  While reading firm reviews for April, 5 lessons stood out.  Let's discuss them. 1.Don't turn bad days into worse One developing trader is working on limiting losses on his bad days.  The thought is every extra dollar not lost on his bad days is money he will earn at the end of month, as they take away from profits. 2. Focus on the real trade One newer trader takes a step back before each trade and understands the bigger picture of the stock.  Where has the stock come from?  Where can it trade to?  Where is Read more [...]

I want my business judged on MY trades!

May 2nd, 2017 I have been mentoring a futures trader recently.  In a daily review (below), he provided feedback that mentoring encouraging him to focus on his best trades was powerful.   I am working with a developing equities trader, who is very profitable when he focuses on his trade.  He can tell you what it is.  He writes in his reviews that he wishes to wait for these trades.  Most recently, I suggested he place a post it on his trading screen: I want to be judged on MY trades! This is a simple exercise, yet powerful.  Try it. *no relevant positions   Read more [...]

From Our Desk to Yours: 5 Key Lessons from Our April Trade Reviews

May 2nd, 2017 Register now to attend our next online trading class, Wednesday, May 3, 2017 at 5 PM ET... Managing partner, Mike Bellafiore, will share 5 lessons the firm's monthly reviews. Each month, firm traders complete a monthly review on how they can improve. The work traders are doing can help inform you on ways you can improve. 〈 REGISTER NOW 〉 Read more [...]