At SMB we share the PlayBooks of each of our traders. When a trader adds a new play to their PlayBook they shoot me an email with a description of the trade and the trader’s attack plan. Below is a portion of a trade description sent to me from Shark for an Opening Drive Play in SBUX. My feedback is in bold.

Name of play: Opening drive play with held bid at techincal level
Intaday Fundementals: CEO announced that the compnay would be very aggressive in next year aquiring companies to compete in single brew coffee sector.
Technicals: 34 was an important long term level.

– Arrow 1: held bid at 34, buy aggressively: 2 tiers
Maybe buy just one lot because the bids from the Tape below the 34 level were shaky right?
– Arrow 2: Stock holds at 20 cents, buy another tier and hit out of 2 tiers if he drops
Now maybe buy two more lots.
– Arrow 3: Take off most of the position into the strength but hold one tier for possible trend
Again you said sell into strength. What does that mean very clearly to you? Does that mean sell when the stock is too vertical? What would that specifically look like for you?
– Arrow 4: Flat when the stock breaks below 50 cents.. 50 cents is the last place it broke out, below the pullback low, and v wap… so a good place for a stop.
Makes sense. I like this stop a lot.

Mike Bellafiore
Author, One Good Trade