One of the greatest hurdles a new trader faces is that of consistency. Consistency on SMB’s desk is defined as being profitable a minimum of 80 percent of the trading days each month. The majority of our desk achieved this level of consistency in the month of August. This was mainly a result of the opportunities in the leveraged financial … Read More
Generating Trading Ideas for Tomorrow
Into the Close I recognized that one of the stocks I was long was stronger than all the others. That was DNDN, which will now be the first stock I consider to trade as I prepare before the Open tomorrow. Let’s discuss. Into the Close I was long LVS, DRYS, AIG, and DNDN. SPY broke from its tight range and started an upmove … Read More
Reading the Tape with Gman: Longer Term Setups
Gman, head trader at SMB Capital, wrote an excellent article for Wall Street Cheat Sheet about using tape reading skills to enter into and exit out of longer term trades. Gman discusses how learning this important skill helps traders limit their risk on a trade while maximizing profits. You can read the full article here.
Should I be Short or Long?
If a stock has fresh news prior to the market Open it may gap up/down a large amount from the previous day’s closing price. My first instinct as a trader is to be long stocks that gap up on news and short stocks that gap down on news. My experience tells me that the majority of the time there is … Read More
Anticipating The Change
In September and October of 2008 the young traders on our desk put up ridiculous numbers. Their aggressive instincts were rewarded by the unusual level of volatility. But then their aggressive instincts were severely punished in the months that followed. They were slow to adapt to changing market conditions. By December of 2008 it no longer made sense to make … Read More
Your Job is Not to Make Money
What do all of these things have in common? We took down our leaderboard at our firm a few months ago. Today one of our traders left early because he got stopped out. The other day I was interviewing a candidate for our desk who defined a good trading day by how much he made or lost. What is your … Read More
Our Approach Makes the Most Sense (Really)
When I began trading in 1996 we identified the stocks we were going to trade from something called the “ticker”. This window that appeared on our trading platform identified stocks that were moving. We were taught to get long stocks that were going up and short stocks that were going down. We were momentum traders with state of the art … Read More
A Last Week in August to Remember – AIG
I wrote last week that the last week in August is historically uneventful. I went on StockTwits TV and said the same thing. I wrote in my blog “Vacation….Chop!” that you ought to take a break. I suggested that the last week in August or the first week in September are generally excellent weeks to vacation. I have some new … Read More