What Does this Trader Do Now?

Hello Bella,

I read both those books and started a few more. The myelin concept got me thinking that I should be reading more every day so I don’t fall into the habit of being lazy with reading in general. Then on the flip side part of me thinks I should limit the reading and focus more on reviewing trading footage and charts. What time allocation do you recommend for a rookie trader like myself hours per day wise amongst:

1)reading investing and accounting books

2)reading trading books

3)reviewing charts and trading footage

4)reviewing trading journal and trading notes

5)working on financial modeling and valuation skills

6)reading general market news

7)researching specific companies

@MikeBellafiore

Listening to $P, catching a ride to #Stocktobfest on $DAL, connected with $GOGO as I answer.

Reading investing and accounting books I would place at the bottom of your priority list.  You are a trader not an investor and certainly not an accountant.  I can think of ways they could add value I would just prioritize your time.

Shark is the biggest proponent of reading trading books as you are developing as a trader.  He has read numerous trading books (perhaps even mine).   Many would want his trading career.  This is a best practice to make into a habit.  Let’s say 1 hour.

We created a Trader’s Day, a document with all the things a trader should do daily.  Reviewing charts is something traders should do each day.  We recommend developing a basket of stocks to review each night.  We also run scans for stocks for which we want to review charts.  Let’s say 30 minutes here because of advancements in chart review efficiency.

Journaling is a best practice Dr. Steenbarger has written extensively about.  Since he coaches some of the largest traders in the world, let’s add this to our daily work.  SMB uses The SMBU Performance Center Powered by Tradervue.   We have also automated importing of data so this process should not take more than 30 minutes,

Working on financial modeling is not my expertise.  We do not do this.  We are short-term traders so this is more for value investors.

I read Bloomberg.com before going to bed each night.  I check the overseas markets and futures.  This takes me 20 minutes.  Also I mentor some Asian traders so helping them helps me prepare.

We do not research specific companies- we are not fundamental analysts.  We do know the story of the stock before we trade it.  And we do know the other stocks in the sector.  For example, when Ebola hit we knew all of the Ebola stocks to trade.

There are news patterns we trade.  We love trading stocks that beat/miss for Full Year guidance as an example.  There are reports where we have a news edge because we have traded a similar news release.  In the end we are summarizing how a majority of market participants will react to news reports as opposed to what we think ought to happen.

The first thing I do premarket is run the SMB Scanner.  In an instant I know what stocks I want to learn more about before the  open.  I populate my charting area and read the news releases about companies gapping up/down 3 percent.  Then I do a deeper dive into whether I want to trade these stocks in the market session.

Also we hold the SMB AM Meeting where Steve Spencer gives his guidance on the best stocks to trade, levels, setups, and his reasoning why.  My premarket preparation with such technology is as short as 30 minutes on most mornings.

One last thing…traders should allocate time each day to building trading filters and automated strategies, and yes especially if they are discretionary traders.

I hope that helps.  Excellent question.

What did we miss?  What else should we spend time on?

tradeearnings

*no relevant positions

 

One Comment on “What Does this Trader Do Now?”

  1. All good points but I would add that work on yourself is key as well. Reading books about psychology and risk management I believe will serve you more in the long term even more than books on trading. I recommend daily workout and meditation practices as well. I have been getting into this lately. Hope this helps.

Leave a Reply