Solutions for improving your trading entries

Hope your doing well. I just wanted to let you know how much I appreciate your book, “One Good Trade”. I have the audible version and with my hour commute to and from work to (brokerage firm). I’ve listened to it countless times.

Yesterday afternoon I decided to listen to it after a rather disappointing month of trading and caught the segment “price matters”. I thought it was an answer to prayer to be completely honest.

Lately, I have been trading more on the long side on support plays (mostly a reclaim of vwap, consolidation, or pullback to it). One thing I’ve noticed is my entries have been poor as I am not getting an entry near as tight as it should be around my planned entry point.

Some of it is has to do with slight hesitation, but also just not fighting for price like you mentioned in your book. Listening to you expound on this subject and reinforcing how important it is if you plan to go long at 36 that doesn’t mean 36.18, etc… has made me understand what separates those at the top of the food chain and the wannabe’s.

My planned risk gets skewed which leads to getting shaken out of more plays than I should with a sloppy entry. I definitely have a major goal I will be working on this month thanks to you and even though I am not physically there on your desk you are actually mentoring me through your books and videos (SMB Premium) more than you could know.

I hope you have a great weekend and once again, thank you!
@MikeBellafiore

This trader seeks to improve his entries.  I agree with him that this is a *very* important skill for active traders.  It can be the difference between success and underperformance.

I really applaud this trader for finding a major goal to work on for the month.  This is an excellent best practice for improvement.  One that we employ on our desk, inspired by Dr. Steenbarger.

Many traders on our desk design a report card on a monthly goal.  Intensive study on one goal helps trader make the most progress possible on this one issue and their trading overall.  Solutions wrapped around best practices are also essential.

Last week, I had conversations with two traders on improving their entries.  One developing trader asked about dark pools for improved entry and exit fills.  Trader felt this was necessary for the next step forward in his trading.  I suggested to another *very* large trader to improve their bid/ask percentage so they could trade even bigger and not leave as much money on the table.  Traders met with a Senior Trader on how best to use our routes and technology internally and walked away with solutions.

Let’s tackle this one issue for the trader above with some possible solutions to consider:

  1. Increase your bid/ask ratio.  How often do you bid to enter and offer to sell?
  2. Study access to dark pools so you can improve fills for bidding and asking.
  3. Create entry rules on how far above price you will bid.  For example, you might not allow entry to be above 5c of your price.

The key is to find solutions to improve performance and focus intensively on them for the month.

As always, I welcome your feedback/comments/questions at [email protected]

*no relevant positions

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