Silver has been on a tear. Yesterday during our AM meeting we discussed some prices that offer excellent risk/reward opportunities. Experienced traders know when something is about to happen. When a stock will really move off of a price. We might not know whether the stock will go up or down. But we know this is the moment. This is the catalyst for a major move. And when we see it we get big. And when the tape offers us protection we get very big.
I was making my rounds on the Open talking with some traders.
“SLV cannot hold above 46.85,” said a trader who initiated a short position.
I looked at his position size.
“You need to get bigger,” I said.
I could tell the developing trader was a bit confused. He might have been thinking Bella I do not want to rip up too much money in this trade. I am not that great on the open. I might get slipped and take a rip. And I would have been thinking right back Yeah but your job is to do the right thing. And this is the moment. And that 85c is giving you protection. SLV has a lot of room to trade lower if you catch it.
Sensing the stock is about to move is such an underrated trading skill. I see very few who can spot these moments. Even some guys who have been trading for 3+ years just cannot sense these spots. But if you do and you have protection on the tape you must get big.
Do not tell me or think to yourself that you are not comfortable getting big there. I do not want to hear and you shouldn’t be thinking that you weren’t sure which way the stock would trade. Your job is to make excellent risk/reward trades. Not be right. Your job is to be big there.
Mike Bellafiore
Author, One Good Trade
5 Comments on “Use the Tape to add size (SLV)”
So simple yet so hard to do. I always find myself struggling to get bigger in situations where the risk/reward is very favorable. Need to definitely work on that
The statements that you don’t know which way it’s going but you have protection from the tape seem a bit contradictory.
even for a terrific set up your win rate might be 60 percent. trading is a game of risk/reward. when the risk/reward is in your favor and protection from the tape you add risk. thxs for the question.
Big talk after the fact. Let’s see you call these realtime.
You’re like a coach telling a linebacker to ram them hard, then when he breaks his neck, you send flowers.
as is mentioned in the blog post I suggested the trader get bigger in real time.