{"id":5099,"date":"2010-05-30T12:28:42","date_gmt":"2010-05-30T16:28:42","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=5099"},"modified":"2023-04-27T08:49:38","modified_gmt":"2023-04-27T12:49:38","slug":"ten-mistakes-by-bp-a-trader-should-never-make","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/ten-mistakes-by-bp-a-trader-should-never-make","title":{"rendered":"Ten Mistakes by BP a Trader Should Never Make"},"content":{"rendered":"<p>1. No Exit Plan. \u00a0There was no exit plan for if the rig (RIG?) exploded. \u00a0Before every trade we must decide where and how we will exit BEFORE entering the trade.<\/p>\n<p>2. Live to Play Another Day. \u00a0It is not definitive that BP is a viable company going forward even with 6.08 Billion in quarterly profits. \u00a01) When will the spill stop? 2) They have a larger rig whose safety was questioned on 60 minutes. 3) What will be the economic penalties imposed on them by the surrounding states whose ecology and local economy they have ruined? Will they pay tens of billions in economic penalties under federal law? \u00a0The workers who lost their jobs?\u00a0\u00a0The future illnesses they have created? \u00a0This is two decades of lawsuits ahead. \u00a04) Why would anyone buy a BP product after the ruination they caused through their incompetence and greed? \u00a0Will we all really forget this spill? \u00a0I know I wake up with a touch more stress first wondering if BP has minimized the spill. \u00a05) Will the spill find Florida? \u00a0A new round of political invective will hit if this occurs.<\/p>\n<p><a href=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2010\/05\/BP-wilting.png\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-5102 alignleft\" title=\"BP wilting\" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2010\/05\/BP-wilting.png\" alt=\"\" width=\"131\" height=\"191\" srcset=\"\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2010\/05\/BP-wilting.png 486w, \/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2010\/05\/BP-wilting-206x300.png 206w\" sizes=\"auto, (max-width: 131px) 100vw, 131px\" \/><\/a><\/p>\n<p>3. Attention to detail. \u00a0Now there are reports that 12,000 barrels a day are leaking from the blow out and not the 5,000 first reported. \u00a0Do you think a trader would be out of the money in a position and not know how many shares he needed to dump?<\/p>\n<p>4. A lack of assistance from the oil community. \u00a0Why the (insert very angry expletive deletive here) (and repeat this very angry expletive deletive as many times as you wish while discussing BP, the oil industry as a whole and the spill) isn&#8217;t EVERY expert from EVERY oil company, EVERY useful piece of equipment to clean the spill down in the Gulf RIGHT NOW?<\/p>\n<p>This is a national emergency. \u00a0This spill is a war on North America. \u00a0The spill is destroying our ecosystem. \u00a0Just today there is a new article with evidence from a local professor finding patches of oil beneath the surface yet to inflict harm but certain to with the next hurricane. \u00a0As traders we form alliances, mentor\/mentee relationships, friendships with like-minded individuals, and partnerships so we are all stronger. \u00a0The oil community is just one big solo trader on an island with only one set of ideas.<\/p>\n<p>5. Where is the hedging? \u00a0So the top kill didn&#8217;t work. \u00a0That was an all-in strategy. \u00a0Why aren&#8217;t there supertankers in the Gulf trying to suck out some of the oil right now as a hedge?<\/p>\n<p>6.\u00a0Transparency\u00a0and Risk Control. \u00a0At your trading firm could you have hidden positions 10 times the risk known to your firm. \u00a0Today there are reports there is a second leak that is spewing 120,000 barrels a day into the Gulf.<\/p>\n<p>7. Overanxious. \u00a0The drillers moved too quickly. \u00a0This created the spill. \u00a0As traders we wait for our set ups where our risk is one and reward is five. \u00a0We never enter a trader too early.<\/p>\n<p>8. Lack of backtesting. \u00a0Drilling so deep underwater needed more backtesting. Back testing is required for all new trades.<\/p>\n<p>9. Responsibility. \u00a0After you make a horrible trade you must accept responsibility. \u00a0When the hacks from RIG BP and HAL went before Congress they fell all\u00a0over themselves\u00a0placing blame on the other. President Obama scolded: &#8220;I have to say, though, I did not appreciate what I considered to be a ridiculous spectacle during the congressional hearings into this matter. You had executives of BP and Transocean and Halliburton falling over each other to point the finger of blame at somebody else.&#8221;<\/p>\n<p>As traders we look in the mirror identify our mistakes, journal about them, discuss them with our peers, visualize a better approach, and improve. \u00a0Blaming the market makers, algos, trading platform, firm, the guy who sits next to you, does not make us better traders. \u00a0If we engage in this lowest common denominator behavior the market will eliminate us.<\/p>\n<p>10. Purpose. \u00a0BP (and too many other companies) have decided like\u00a0soulless, amoral, selfish, irresponsible, incompetent, small, insecure, greedy,\u00a0unintelligent, visionless hacks that \u00a0their only purpose is to make money for their shareholders (corporate executives?). \u00a0Today I read this quote from an energy CEO: &#8220;What I worry about as an energy CEO is what effect this will have on energy policy,&#8221; he said, noting it may lead people to look more seriously at electric cars, or complicate plans to pump carbon underground. &#8220;This BP thing has tentacles.&#8221;<\/p>\n<p>They still do not understand. \u00a0How about if an energy company&#8217;s purpose was to provide clean energy so as to preserve the planet entrusted to us, mainly through technological advancements driven by a revolutionary company, at a low cost improving the economic purchasing power of most citizens, and for the benefit of their shareholders. \u00a0Now that would be a company everyone would want to work for and would dominate the energy sector.<\/p>\n<p>As traders our job is not to make money. \u00a0It is to become an elite performer, which then leads to profitable trades. \u00a0As traders we seek to maximize our moments as the best of ourselves improving the quality of our lives. \u00a0This is our purpose for trading.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>1. No Exit Plan. \u00a0There was no exit plan for if the rig (RIG?) exploded. \u00a0Before every trade we must decide where and how we will exit BEFORE entering the trade. 2. Live to Play Another Day. \u00a0It is not definitive that BP is a viable company going forward even with 6.08 Billion in quarterly profits. \u00a01) When will the &#8230; <a href=\"https:\/\/www.smbtraining.com\/blog\/ten-mistakes-by-bp-a-trader-should-never-make\" class=\"more-link\">Read More<\/a><\/p>\n","protected":false},"author":144,"featured_media":5102,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,10],"tags":[507,1023,1038,1032,469,618,108,1037,1039,30,50,519,18,664,144,38],"class_list":["post-5099","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general-comments-2","category-mike-bellafiore-bellas-blogs","tag-a","tag-bp","tag-bp-spill","tag-by","tag-good","tag-make","tag-mistakes","tag-never","tag-president-obama","tag-prop-trading","tag-proprietary-trading","tag-should","tag-smb-capital","tag-ten","tag-trader","tag-trading"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Ten Mistakes by BP a Trader Should Never Make | 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\/ten-mistakes-by-bp-a-trader-should-never-make\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Ten Mistakes by BP a Trader Should Never Make | SMB Training\" \/>\n<meta property=\"og:description\" content=\"1. No Exit Plan. \u00a0There was no exit plan for if the rig (RIG?) exploded. \u00a0Before every trade we must decide where and how we will exit BEFORE entering the trade. 2. Live to Play Another Day. \u00a0It is not definitive that BP is a viable company going forward even with 6.08 Billion in quarterly profits. \u00a01) When will the ... 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