This Thursday I will speak to aspiring traders at Pace University. As I prepare for my discussion, I have been thinking of a Trader’s Trading Path From A-Z. A. Read about the markets when you are young. If you enjoy reading about markets, then read more. B. Start playing with putting together trades in simulation. C. If you find some … Read More
The First Step to Systems Success
Risk. This is the first and most important metric for a systems trader to track and improve. When learning about a system or strategy, most people first ask about the returns. Imagine you had one program that generated 21% per year on average and second was doing 35%. For some, the analysis is over because they just want higher returns. … Read More
SMBU Trade of the Week: Facebook
Mike Bellafiore, author of the “trading classic” One Good Trade and The PlayBook, talks about his SMBU Trade of the Week in $FB. Even though he thought $FB was going to trade lower, when it broke out to the upside, he followed the price action and captured an excellent risk/reward opportunity. Highlights from this trade: 1) You do not have to predict where … Read More
Trading Education: Will Adobe Correct Through Price or Time?
Steve Spencer, partner at SMB Capital, discusses an ADBE trade he’s been in for a couple of months. Highlights from this trade: 1) Stocks correct through price or time. 2) Signals to enter a counter trend trade. 3) Knowing when to get out of an extended stock. Steven Spencer is the co-founder of SMB Capital and SMB University which provides … Read More
What a Successful Trader Would Never Do
Mike, This was kind of a mixed week. Good. 1. I find the 2nd day trade makes the most sense to me. I pick the strongest stock of the day and then find two levels of support and outline my entry price, stop price, target, and size. So far so good. 2. I also found that I don’t pay as … Read More
Order Flow for Validation
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Seven Steps to Systems Success
Most platforms that run automated back testing and trading systems have extensive reporting capabilities to analyze performance. In these reports the software developers have included seemingly every possible statistical metric they could find. Reading these line by line quickly becomes information overload and can often leave the systems developer with more questions than answers. So we have narrowed down the … Read More
Losing Trades are Good for You?
One of the most overlooked opportunities in the speculative world of trading is the valuable information hidden within trading losses. Less experienced traders usually have a hate/hate relationship with losing trades and don’t want to spend much time thinking about them. We are conditioned to be winners! Losing trades are part of doing business, a necessary expense or as many … Read More