Posts Tagged ‘ Trading Lesson ’

Impossible Market Timing?

Mar 12th, 2017 | By | Category: Steven Spencer (Steve's) Blogs, Trading Lesson
Wouldn't it be great if we had a tool that gave us a heads up when market was making a short term top? What if that same tool could be used to time the bottom in market pull backs as well? If we had something like this surely we would make many millions of dollars if not billions in the market each year? Market participants spend a lot of time analyzing various data points to help time market turning points. Sentiment, money flows, momentum are a few that come to mind. Every morning we hold an "AM Meeting" where I give an overview of the broader market indices before we discuss the In Play names of the day. In large part my analysis Read more [...]

The End of Volatility

Feb 17th, 2017 | By | Category: Steven Spencer (Steve's) Blogs
During the first three years of my trading career I participated in a stock market that seemed to move 1%+ almost every day. That market was built for short term traders. But during that same time period regulators pushed through a series of market structure changes that I believe laid the foundation for a long term decline in stock market volatility. I now believe those structural changes as well as other technological developments make it unlikely the price gyrations that were once common place will ever return. Structural Changes In 1997 the SEC approved the alternative quotation networks known as ECNs to offer competing Read more [...]

Sometimes Good News is The Best News To Short

Feb 2nd, 2017 | By | Category: Steven Spencer (Steve's) Blogs
Recently, an inexperienced trader asked me about a stock that traded lower after reporting great news. As any experienced trader will tell you, often that is a great opportunity to get short. Yesterday, Facebook reported amazing earnings with a slew of positive metrics. In the after hours it traded to a new all time high above 137. Yet, I got short in the after hours around 137 and then added to the position in the pre-market below 135. In this morning's video I discuss my trading plan for the day and possible patterns that Facebook might follow. Facebook has a history of gapping higher initially following a strong earnings report Read more [...]

Misery–Nothing Worked Today $CREE $STX $EAT

Jan 26th, 2017 | By | Category: General Comments, Steven Spencer (Steve's) Blogs
(1/25/17) Things didn't work out so well today. Technically, EAT trade idea worked perfectly but I forgot to enter my "trading script" pre-market so I missed the short at 46, which worked perfectly trading down $2 to our first support area. It's actually my second favorite setup for a stock reporting earnings: poor EPS & guidance that pops to well defined resistance right on Open and fails. No excuses for missing this one. Nailed the levels perfectly. Finished our AM Meeting at 9:10AM so had 20 minute to enter all my scripts prior to market Open. The next two stocks: STX & CREE are a different story. Got stopped Read more [...]

Three Opening Trades–Review BABA MMM VZ

Jan 25th, 2017 | By | Category: Steven Spencer (Steve's) Blogs, Trading Ideas, Trading Lesson
Yesterday, I made the below three trades on the Open based on our morning game plan and strategies we teach on the prop desk. It is important to spend time reviewing your trades each day to determine if you followed your trading plan and identify possible improvements on execution. BABA (win)---good #s. With large recent runup no great setup but expect some initial profit taking before any bounce. Look for failure at 104. Didn’t get short off on 104 failure as wasn’t on desk. Got long flush near 101 w/ stop below 100.50. Not huge confidence in this trade because Chinese name so anything possible but $3 from resistance Read more [...]

Trading lesson learned from a large loss

Dec 9th, 2016 | By | Category: General Comments
I am proud of a trader on our desk. He got stopped out in FNSR.  In a trade that he should not have made.  The trade is too fast for him. (Learn more about trading edge in this video.) He violated his stop loss. He got caught like a deer in headlights as the trade went against him. That is a pretty tough down move for a stock that appeared to have good news before the open. Bella, why are you proud of this trader?  He appeared to do so much wrong. He learned very valuable lessons from this trade, as he specifically communicated to me in a closed-door review. This trade does not fit his personality. Read more [...]

Understanding Market Turning Points

Oct 14th, 2016 | By | Category: Steven Spencer (Steve's) Blogs, Trading Lesson
Short term traders make thousands of trades each year. But not every trade is of equal importance to our bottom line. We develop a trading plan for every trade regardless of how large or small the opportunity, but with experience we begin to identify the trades that offer the greatest upside and the best risk/reward. I have found in my 20+ years of trading that identifying potential turning points in the market can make a dramatic difference in your trading results each year. On these days the risk/reward is magnified for making broader market trades, and many individual names will establish important short term tops/bottoms Read more [...]

When A Stock Is Crushed

Oct 8th, 2016 | By | Category: General Comments, Steven Spencer (Steve's) Blogs, Trading Lesson
When a negative catalyst causes a stock to gap lower 20% or more it attracts a lot of attention. Should we look for a bounce? Should we stay short and look for more downside? Here are some things to consider Steven Spencer is the co-founder of SMB Capital and SMB University which provides trading education in stocks, options, forex and futures. He has traded professionally for 20 years. His email address is: [email protected] Read more [...]