SMB Options Tribe Meeting with Mike Bellafiore - 10.23.12


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Mike Bellafiore, author of One Good Trade and co-founder of SMB Capital and SMB U will be making a presentation on the principles of "One Good Trade" to the Options Tribe community

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SMB Options Tribe Meeting with Mike Bellafiore - 10.23.12

  1. 1. One Good Trade The 7 Fundamentals Mike Bellafiore Author of One Good Trade Co-Founder of SMB Capital Co-Founder of SMBU
  2. 2. The 7 Fundamentals Proper Preparation Hard Work Patience A Detailed Trading Plan Discipline Communication Replaying Your Important Trades
  3. 3. 1. Proper Preparation“Failing to prepare is preparing to fail.” John Wooden
  4. 4. A Trader’s Day- The Open
  5. 5. Midday and the Close
  6. 6. After the Close
  7. 7. The Power of Professional TradingTools Preparation tools Scanning Filters Idea generation
  8. 8. SMB Scanner
  9. 9. SMB AM Meeting
  10. 10. SMB Real-time
  11. 11. SMB Radar
  12. 12. 2. Hard Work Watching the Level II and Times & Sales Watching price action at your levels Important intraday Prices?
  13. 13. 3. Patience If your entry price is 30 then where do you enter? An upside of 5 and a downside of 1 Chasing is for dogs Affects your exit if you enter at a bad price Hard to get big from a bad price Win rate declines
  14. 14. 4. A Detailed Trading Plan For if the stock trades in your favor For if the stock trades against you
  15. 15. My Favorite Teaching Exercise Tap a trader on the shoulder Why are you in this trade? Where will you exit? I expect an immediate answer If not then kicked off the trading desk Come back when you plan on being a pro
  16. 16. 5. Discipline What do you do if your stock trades against you? What do you do if your stock hits your exit price? What do you do if your stock hits your criteria for exiting?GET OUT!!!!!!!
  17. 17. SNDK – 11/21/2005 Intel Teams With Micron For NAND Flash Production SanDisk in this space SNDK down 16%
  18. 18. SNDK
  19. 19. SNDK
  20. 20. Who is not a Trader- The Blow ups Jon Corzine MF Global John Meriwether Long-Term Capital The London Whale 5B in losses Buzz Weinstein other side of the-now famous London Whale trade.
  21. 21. 6. Communication Sharing information with community StockTwits Chat rooms Internet trading communities Create your own trading community I have traded solo…………………….
  22. 22. 7. Replaying Your Important Trades SMB Playbook Trades that make the most sense to you Build from your strengths Get bigger in the plays that make the most sense to you Find more of them Trade them with more size This is how you become great
  23. 23. The PlayBook
  24. 24. The PlayBook Title Strategy Description Big Picture Intraday Fundamentals Long-term Technical Analysis Short-term Technical Analysis Reading The Tape Trade Management Trade Review Trade Idea
  25. 25. What Is Your Job As A Trader?
  26. 26. One Losing Trade If you make a losing trade is that One Bad Trade?
  27. 27. A Professional Trader A professional trader takes losses all the time Control their risk Do the right thing If I make this trade 1000xs will it work? @sspencer_smb, “A professional trader takes many small losses.”
  28. 28. 7 Fundamentals If you have followed all 7 Whether you make $ or not Then that is One Good Trade That is your job! Sustaining, consistently profitable trader
  29. 29. SMB Mantra Make One Good Trade and then One Good Trade and then One Good Trade Coach K at Duke
  30. 30. Questions?
  31. 31. Feel Free To Contact Me @MikeBellafiore