Yesterday we explained a trading algorithim on more desks that may explain why swing traders, retail traders, long-term investors/traders are getting stopped out more on their positions. Today we will explain another part to the algorithm that eliminates one possible adjustment. So as we discussed, say we are long at 30 with a stop at 29.84. One way to combat the algorithm that is … Read More
Why Am I Getting Stopped Out More?
One of our new trainees noticed with frustration in his voice that he was getting stopped out more in his swing trades. Adam Grimes and I sat in my office discussing more little trades we were getting stopped out on intraday. I read about this complaint in the blogosphere and all things Twitter. Let me offer a potential reason. So you … Read More
Traders Ask: How Do You Determine Your Risk/Reward?
Hi Mike, Just finishing your book One Good Trade with this take away. I am determined to master the skill of ‘reading the tape’, believing that to be the golden key to my future success as an intraday trader. Thanks for infusing me with new motivation. One question. I’m a little confused about how to actually measure the risk/ reward going … Read More
Frustrated Trader (VMW)
I traded VMW on the Open. Home of the impossible 5 million shares and no liquidity. If anyone is into the whole HFT conspiracy/they are evil dogma replay this tape. Let’s see if we can learn from this rip. 83 was a level from the open. It was a level from the premarket and afterhours trading. There was resistance on … Read More
The Psychology of Sizing (Guest Blog)
Below is a wonderful contribution to our learning/growth shared by an SMB Blog Reader and professional trader. **************** For the past 4 months I’ve been battling with risk management. It’s been my Achilles heel. Its has completely destroyed my consistency. I’ve made big and I’ve also lost big. I’d say that 80% of my trades have good technical structure and … Read More
Three Good Trades in CLDA
1. Buy 23 with a stop of 22.89 There was too much buying near 23 on the bid. The buying was VERY different on the tape. CLDA was still firmly positive for the day. Was this the possible bottom? I kicked some out at 23.60, some above 24 and sold the rest below 23.80. 2. Buy 23.60 with a stop … Read More
Exercise and My Trading
Before I started SMB I could be found after work for hours playing pickup basketball at the exclusive Reebok Club in NYC. I loved the competition, the guys who played regularly, and trying to get better in my early thirties at a sport I enjoyed. It also left me in remarkable physical condition, just a few pounds from my high school … Read More
In a Perfect World
Say a billionaire approached you and asked: in a perfect world what would you need to be your best trader? Assume you worked at a prop firm so any of this would also be available for your fellow traders. He would offer an open checkbook. You would trade and focus only on growing your P&L. Here is my partial list: 1) … Read More