Traders Ask- How Do You Choose What Trades to Focus On?

Sep 2nd, 2010 | By | Category: General Comments, Mike Bellafiore's (Bella's) Blogs, Traders Ask
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Thanks for a great job on the blog. Also love Mike’s book.

I just left a prop firm where i could only scalp Eurostoxx 50 futures (like dax or S&P500 futures) to trade stocks in play for my own money, since there are almost no props here trading stocks.

I live in Stockholm (Sweden) and the Nordic equity markets are not yet that “algorized” which also makes me beleive I will have a bigger edge trading the equitys.

Im a tapereader so when I focus on a stock I usually get a idea of what it is doing, but the problem for me is where to place my focus since I suddenly have so many options.
I am trying to find 2-4 stocks in play, but I find it hard know where to place my focus since there might be other plays that I miss, on for example my B list.
How do you guys do it? do you only focus on for example one or two stocks and dont care about the rest?
You of course have the luxury of having more eyes on the screen, but I was hoping you have some recomendation for me since my focus is shattered between all the opportunity around me, making me miss the trades in front of me!!

Do you work with some mindset, rules or method around this problem?

Bella Responds

Great question. Terrific question identifying an area you need to improve. Love how you are working on your game here.

Develop a Trading Road-map before the open. Before the open visualize possible trading scenarios. Identify the set ups that make the most sense for you. Actually rehearse how you will trade the open.

Prepare you mind to be ready for the best set ups for you. What is the stock(s) that are best for you. What are the best prices? What are the best set ups? Visualize the plays you most want to be in with your top ideas. Consider your third, fourth and fifth stocks. Where would you really want to be in with them? What set up? Consider if my third stock is at this price under what conditions will you leave my primary stock.

Rehearse the open. This will help you focus on the best set ups and stocks for you.

Keep working on your game. We all have areas of weakness. There is always a solution. With practice and work comes improvement.

Mike Bellafiore
Author, One Good Trade: Inside the Highly Competitive World of Proprietary Trading

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  1. Thanks for your teriffic answer Mike.

    This is going to be part of my morning routine.

    I think the lack of proper preparation was the key here.
    I figured that part of this problem was also to many stocks to choose from.

    So what I have also done to tackle this problem was to sit down during the weekend to handpick the “best” stocks right now with the proper volume, volatility, pricerange etc + some of the recent In Play unusual volume stocks.

    This list of about 40 stocks will make a good starting ground for me.
    I will evaluate this list every day, set alarms, draw levels, add new in play stocks etc.

    Stockholm (Sweden)