{"id":49165,"date":"2019-10-28T14:45:56","date_gmt":"2019-10-28T18:45:56","guid":{"rendered":"https:\/\/www.smbtraining.com\/blog\/?p=49165"},"modified":"2019-10-28T14:45:56","modified_gmt":"2019-10-28T18:45:56","slug":"everything-you-need-to-know-before-you-place-a-trade-in-a-stock-assuming-you-want-to-become-a-successful-trader","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/everything-you-need-to-know-before-you-place-a-trade-in-a-stock-assuming-you-want-to-become-a-successful-trader","title":{"rendered":"Everything you need to know before you place a trade in a stock (assuming you want to become a successful trader)"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-49166\" src=\"https:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2019\/10\/training-room-spencer.jpg\" alt=\"\" width=\"598\" height=\"444\" srcset=\"\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2019\/10\/training-room-spencer.jpg 598w, \/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2019\/10\/training-room-spencer-300x223.jpg 300w, \/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2019\/10\/training-room-spencer-100x74.jpg 100w\" sizes=\"auto, (max-width: 598px) 100vw, 598px\" \/><\/p>\n<p>We were in our training room in Midtown Manhattan during our 11AM mentoring session, reviewing TSLA from the opening session.\u00a0 Kinda a big trading opportunity for those following markets lately.\u00a0 One new trader had traded it, but not particularly well.\u00a0 I asked him why he chose TSLA.\u00a0 And he rattled off what he thought was the news catalyst in the name.<\/p>\n<p>But the new trader&#8217;s description of the news catalyst was not complete.\u00a0 It lacked important details related to TSLA&#8217;s potential upside.\u00a0 This could have contributed to his premature sale, which he was lamenting.<\/p>\n<p>Candidly from my seat, I really don&#8217;t get how you miss things like this as a new trader.\u00a0 Remember they have taken <a href=\"https:\/\/tradingworkshop.com\/\">SMB DNA<\/a> and sat in on numerous AM prep meetings by now.\u00a0 But it is even simpler than that.\u00a0 How could you trade a stock and not know in detail the news is in the stock you are trading?\u00a0 How could you miss important information and trade the name?\u00a0 Why would you think you will get better if you are trading off of an incomplete understanding of the news catalyst?\u00a0 As I explain in this video, <a href=\"https:\/\/www.youtube.com\/watch?v=VzfBlY7SOI4&amp;t=76s\">good is not good enough<\/a>.<\/p>\n<p>But it happens.\u00a0 It happens during every new class.\u00a0 And frankly is pisses me off every damn time.\u00a0 Sigh.<\/p>\n<p>I instructed all in our new trader class and our fall interns to gather after our mentoring session and create a list of everything a trader needs to know before you trade a stock.\u00a0 We need to get this right and right now.\u00a0 I chose a trader to lead the discussion and develop the list.<\/p>\n<p>Below is what they came up with.<\/p>\n<p><b>What do I need to know before entering a trade:<\/b><\/p>\n<ol>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">News<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">RVOL<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Above below VWAP<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">ATR<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Average volume<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Long Term Chart (Where are we in the Daily\/Weekly)<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Major ETF movement and strength<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Understanding the catalyst (news, technical, etc)<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Tape\/Confirmation<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Short interest<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Stock Float<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Institutional Ownership<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">SPY (Where are we overall with the market?)<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Where am I right\/wrong on this trade?<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Entry, Stop, Target\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Gap% (if there is one)<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Who is in control\/how is the stock trending<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">What kind of trade am I making (PlayBook trade?)<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Time of day<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">How far has the stock come?<\/span><\/li>\n<\/ol>\n<p>We will discuss their list tomorrow and release this discussion on our <a href=\"https:\/\/www.youtube.com\/user\/smbcapital\">SMB Capital YouTube<\/a> channel.\u00a0 I will suggest some additions.\u00a0 But, overall, this is a strong list and solid work by them.<\/p>\n<p>Do you have a list?\u00a0 What would you add to the list that is important to your trading?\u00a0 These lists will differ by trader, but what should not differ is having\/creating such a list of information that must be known before each trade.<\/p>\n<p>If you trade with incomplete information in a trade, you are not gaining the proper experience.\u00a0 It is vital for you as a developing trader to gain trading reps with complete information and full prep.\u00a0 Or else you are just getting a look at your trading ill prepared. That is very dangerous for your progress as a trader.\u00a0 In fact, this alone could be the reason for underperformance.<\/p>\n<p>You must obtain the right kind of experience as a new and developing trader.\u00a0 Consistent preparation with a comprehensive list like above will start giving you this right kind of experience.\u00a0 With such information, you can build.\u00a0 With complete information, you can improve.\u00a0 With proper preparation, you can start to build valuable trading experience and intuition to make good trade decisions.\u00a0 Without it, you will just be flailing around as an underperforming trader headed soon for failure.<\/p>\n<p>*no relevant positions<\/p>\n<p style=\"text-align: center;\"><a href=\"https:\/\/www.smbtraining.com\/blog\/smb-disclosures?inf_contact_key=86e68ad95cfd2835f919c6dd5a8f153af651f238aa2edbb9c8b7cff03e0b16a0\"><strong>Important disclosures<\/strong><\/a><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>We were in our training room in Midtown Manhattan during our 11AM mentoring session, reviewing TSLA from the opening session.\u00a0 Kinda a big trading opportunity for those following markets lately.\u00a0 One new trader had traded it, but not particularly well.\u00a0 I asked him why he chose TSLA.\u00a0 And he rattled off what he thought was the news catalyst in the &#8230; <a href=\"https:\/\/www.smbtraining.com\/blog\/everything-you-need-to-know-before-you-place-a-trade-in-a-stock-assuming-you-want-to-become-a-successful-trader\" class=\"more-link\">Read More<\/a><\/p>\n","protected":false},"author":144,"featured_media":49166,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5463],"tags":[30,299,5414,1193,4418],"class_list":["post-49165","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bella-daily-update","tag-prop-trading","tag-stock-selection","tag-successful-trader","tag-trader-education","tag-trading-preparation"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Everything you need to know before you place a trade in a stock (assuming you want to become a successful trader) | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/everything-you-need-to-know-before-you-place-a-trade-in-a-stock-assuming-you-want-to-become-a-successful-trader\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Everything you need to know before you place a trade in a stock (assuming you want to become a successful trader) | SMB Training\" \/>\n<meta property=\"og:description\" content=\"We were in our training room in Midtown Manhattan during our 11AM mentoring session, reviewing TSLA from the opening session.\u00a0 Kinda a big trading opportunity for those following markets lately.\u00a0 One new trader had traded it, but not particularly well.\u00a0 I asked him why he chose TSLA.\u00a0 And he rattled off what he thought was the news catalyst in the ... 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