{"id":51689,"date":"2022-12-24T08:50:36","date_gmt":"2022-12-24T13:50:36","guid":{"rendered":"https:\/\/www.smbtraining.com\/blog\/?p=51689"},"modified":"2022-12-24T08:50:36","modified_gmt":"2022-12-24T13:50:36","slug":"taking-a-rip-in-tesla","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/taking-a-rip-in-tesla","title":{"rendered":"Taking a Rip in Tesla"},"content":{"rendered":"

\"\"<\/p>\n

We shared that we have been hawking a potential Bounce Trade in Tesla.\u00a0 I spelled out Four Keys for a Tesla Bounce Trade<\/a>.\u00a0 Some on the desk pounced on a Bounce Trade in Tesla after SEEING it.\u00a0 They took rips as the trade failed.\u00a0 Let’s discuss an important reality to being a professional trader.<\/p>\n

Taking losses is part of the business.\u00a0 Taking rips will happen.\u00a0 Trading is a game of probabilities.\u00a0 Some (many?) trades will not work and are still be worth taking.\u00a0 Even the best traders experience large rips in our game.<\/p>\n

One star trader, and I mean star trader, sent me a Gchat after taking a rip.\u00a0 He wrote that two other star traders and he bought Tesla with size after SEEING the trade and took a rip.\u00a0 I responded positively:<\/p>\n

\"\"<\/p>\n

One of my partners called after the firm took heavy losses in the Tesla trade.\u00a0 All he wanted to know was whether traders stayed inside of their guardrails and whether the trade was worth the risk.\u00a0 I replied it was and everyone stayed withing their risk limits.\u00a0 My partner replied positively, “Okay as long as they are taking a good trade.\u00a0 Losses happen.”<\/p>\n

(How to Develop Winning Trading Strategies (with real-world edge)<\/a>)<\/p>\n

Another trader at the firm, who also took a big rip in the Tesla bounce sent over a recording of a key moment in the tape.\u00a0 Man I love that!\u00a0 This trader used his Tape Reading skills to spot price action that was now most likely bullish.\u00a0 This trader and his team bought.\u00a0 This trader and his team held.\u00a0 And the trade didn’t pan out.\u00a0 In this trader’s words:<\/p>\n

I wanted to share a very special moment I saw in TSLA yesterday. A lot of nuances added up together to make this a great trade. The trade didn’t end up panning out how I wanted it to, but I know for a fact that the spot I saw on the tape can be a huge trade the day it works.<\/p><\/blockquote>\n

My response to this trade was… *very positive*.\u00a0 He did his job.\u00a0 He was again doing his job by reviewing.\u00a0 This is what professional traders do.\u00a0 He took a good trade.\u00a0 The trade didn’t work out.\u00a0 He reviewed his work.\u00a0 He is better for the experience.\u00a0 In my words, I responded positively to this trader:<\/p>\n

\n
thxs for sharing<\/div>\n
I love this best practice of recording and replaying these special moments<\/div>\n
this will make you a much better tape reader<\/div>\n
and help you enter at much better prices and improve your win rate and thus allow you to trade bigger which<\/div>\n
leads to making more<\/div>\n<\/blockquote>\n
\n

(For more on Tape Reading see: <\/span>Two Variables that lead to an A+ trade<\/span><\/a>)<\/span><\/p>\n

Now none of this feels good on this Saturday AM after the rip for these traders and the firm.\u00a0 Not for the traders.\u00a0 Not for me.\u00a0 Not for the firm.\u00a0 And we all have to consider our Bounce Trade strategies, particularly taking profits in a bear market.\u00a0 But I am not even sure that was warranted given the immense sell off in Tesla.\u00a0 We could very much conclude that all the losses were acceptable.\u00a0 We could conclude we would do it all over again and in the same way.\u00a0 But maybe not.\u00a0 We will do the review work to scrub our Bounce Trade.<\/span><\/p>\n

But I do hope the lesson from this experience for the reader is\u2026professional traders take losses.\u00a0 This is part of the game.\u00a0 This is the game we signed up for.\u00a0 They will never go away.\u00a0 They don\u2019t for star traders.\u00a0 They don\u2019t for a professional trading firm.\u00a0 They won\u2019t for you.\u00a0 They won\u2019t for me.<\/span><\/p>\n

Hey next trade.\u00a0 Next One Good Trade.<\/span><\/p>\n

Bella<\/span><\/p>\n<\/div>\n

\n

Important disclosures<\/a><\/strong><\/p>\n

Mike Bellafiore is the Co-Founder of SMB Capital, a proprietary trading desk, and SMB Training, which provides\u00a0trading education<\/a>\u00a0in stocks, options, and futures. Bella is the author of\u00a0One Good Trade<\/em>\u00a0and\u00a0The PlayBook<\/em>. He welcomes your trading questions at\u00a0mbellafiore@smbcap.com.<\/p>\n<\/div>\n

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 <\/p>\n","protected":false},"excerpt":{"rendered":"

We shared that we have been hawking a potential Bounce Trade in Tesla.\u00a0 I spelled out Four Keys for a Tesla Bounce Trade.\u00a0 Some on the desk pounced on a Bounce Trade in Tesla after SEEING it.\u00a0 They took rips as the trade failed.\u00a0 Let’s discuss an important reality to being a professional trader. Taking losses is part of the … Read More<\/a><\/p>\n","protected":false},"author":144,"featured_media":51691,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5463],"tags":[1779,30,5600,1354],"class_list":["post-51689","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bella-daily-update","tag-bounce-trade","tag-prop-trading","tag-tesla-trade","tag-trading-coach"],"yoast_head":"\nTaking a Rip in Tesla | 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\/taking-a-rip-in-tesla\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Taking a Rip in Tesla | SMB Training\" \/>\n<meta property=\"og:description\" content=\"We shared that we have been hawking a potential Bounce Trade in Tesla.\u00a0 I spelled out Four Keys for a Tesla Bounce Trade.\u00a0 Some on the desk pounced on a Bounce Trade in Tesla after SEEING it.\u00a0 They took rips as the trade failed.\u00a0 Let’s discuss an important reality to being a professional trader. 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