{"id":6224,"date":"2010-08-01T10:20:09","date_gmt":"2010-08-01T14:20:09","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=6224"},"modified":"2010-08-02T18:33:07","modified_gmt":"2010-08-02T22:33:07","slug":"hearing-trusting-and-trading","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/hearing-trusting-and-trading","title":{"rendered":"Hearing, Trusting and Trading"},"content":{"rendered":"

Huge HT to @traderinterviews, the place to listen to profitable, experienced traders share market lessons, for sharing an important video on trust. More specifically on trusting your teammates. Or to us on trusting our trading teammates. Please watch below.<\/p>\n

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Let’s walk through logically why it is so important as traders to develop the skill to gather trading ideas with your ears and then trust your teammates. I know this sounds funny. But your ears are an important skill to develop. Like your ability to read charts, read the tape, or discover patterns based on fundamentals. I can tell by the inflection in Spencer’s voice, my trading partner for the past so many years, how good the stock he is trading is. GMan cranked up the futures pit feed the other day because, “it helps me tell if the breaks are real.” One of our new traders chirped a few weeks ago, “Watch GLD Bella I just got short.” I got short. One of my better trades this year was a call out in TM by a brand spanking new trader. There is money to be made by hearing and then trusting.<\/p>\n

Now here is what happens to those with underdeveloped hearing and trusting skills. You hear valuable trading information. You place a trade. It doesn’t work. You get pissed. The next time you don’t make the trade. This does not make sense. Trading is a game of percentages. Of course sometimes when another firm trader, or trading teammate, shares information this will lead to a losing trade. Your job as a trader is to make One Good Trade and then One Good Trade and then One Good Trade. The results of a trade do not necessarily indicate that you made a poor trade.<\/p>\n

Your month is based upon how much money you make minus how much you have lost. For active traders the more trades we make where our risk\/reward is favorable then the more money we will make. Trading opportunities are our oxygen. And there are only so many we can find by ourselves. We need help. Being a part of the right trading team can ensure the most trading opportunities. Then we need to trust our teammates.<\/p>\n

It is not a one day process to develop this skill of hearing and trusting. You are not gonna go in Monday say I am gonna listen to Iceman or Lil Mike from now on<\/em> and start making more money. You must learn what audio you can use to make more money based on how you trade. For example there are trades Spencer squawks that are not right for me. I can just tell how he is talking about the stock. But that does not mean I do not need his audio. It means I must use this Spencer audio to my advantage, develop this skill of hearing and then trusting.<\/p>\n

When the markets are more difficult as they have been of late, desks get quieter. One successful prop firm owner made this comment about another prop desk he had visited this month, “It is as quiet as a church.” No one wants to belt out incorrect info. A few weeks ago I declaratively announced the market has just broken to the downside and I was focusing on only shorting. As if my comments cued the market the market reversed and finished near the high. But then again I also announced recently the strength in AMZN as it then bounced ten plus points, and the strength of CTXS as it finished at its high. You will be wrong with your call outs (though my intraday breakdown recent call was so bad I joked I was firing myself). Let your teammates decide what to do with that information. But as a trader learn who you can trust, what information will add value to your trading, and add trading opportunities to your P$L. <\/p>\n

One more thing….if you goal is to become the best trader you can. And hearing and trusting can add valuable trading opportunities for you. And you do not have a system for hearing, trusting and trading, then are you as good a trader as you can be? And if our goal is to be as good as we can as traders, then isn’t this underdeveloped skill an area to improve? <\/p>\n

Tip: Share actionable trading opportunities and not opinion. For example, BIDU is at an important long term resistance level of 76.50. I am short.<\/em><\/p>\n