Below is an email exchange between me and an SMB Reader, who is a pretty good trader. We discuss how to improve his Breakout Trade attack. This blog post ends with related past posts.
SMB Reader
Mike,
The Thursday after you visited the big CT hedge fund you very briefly mentioned, “They play all breakouts the same way, paying up over levels.”
It’s been replaying over and over in my mind lately.
Is the risk the breakout level?
@mikebellafiore
You want the stock to work, move away from the resistance and hold above the breakout price.
Trade well.
SMB Reader
Mike,
Is there a “last thing” that traders have to push through to get there? I feel like it’s at my finger tips now. WTF can I do to just get it?
I see taking stops. I see levels and price action. I see patience. Why am I not ready to take the trade at 1620.25 today? Or get in short at 1632. I loved both of those areas.
Maybe it’s focus? Can you throw me a rope?
Thanks.
@mikebellafiore
2. Visualize making them
3. Determine how much risk you will take on them
4. Build individual filters for breakout trades that work best for you
5. Then sit and meditate on how if you see this trade you must take it because this is your trading system
Stop worrying about being right. That is not your f****** job. Your job is to manage your risk. Not taking a good risk/reward trade is not managing your risk and thus not doing your job.
You can be better tomorrow than you are today!
Related posts:
What is Your Mission Statement?
Ten Takeaways From a Top Trading Coach on How to be a Successful Trader
The Misunderstanding of the Conviction Trade
Understanding Market Structure
Mike Bellafiore
