December 19th, 2017

This week, James Hogan of Optionvue Systems, International will be discussing how to use Optionvue software to identify trading opportunities consistent with a trader’s directional or non-directional bias.

Options Tribe meetings are generally free to the public and are held every Tuesday at 4:30PM ET. If you wish to register to this meeting, please click here.

We look forward to seeing you at the meeting!

Seth Freudberg
Director, SMB Options Training Program

The SMB Options Training Program is an eight-month program designed for novice and intermediate level options traders who are seeking an intensive training process to learn how to trade options spreads for monthly income. For more information on this program contact Seth Freudberg: sfreudberg@smbcap.com.

No relevant positions
Risk Disclaimer
Futures Risk Disclaimer

Options traders can often be despondent after experiencing a losing month. That’s because they have lost perspective on why they are successful in the first place. In this video we talk about why periodically losing is actually necessary for a successful options trading strategy to thrive long term.

* no relevant positions

December 26th, 2017

This week, Options Tribe member Dave Freitag will be returning to the Options Tribe to present “The Save Trade”. We’re excited to have Dave back on the Options Tribe and we hope that you can join us!

Options Tribe meetings are generally free to the public and are held every Tuesday at 4:30PM ET. If you wish to register to this meeting, please click here.

We look forward to seeing you at the meeting!

Seth Freudberg
Director, SMB Options Training Program

The SMB Options Training Program is an eight-month program designed for novice and intermediate level options traders who are seeking an intensive training process to learn how to trade options spreads for monthly income. For more information on this program contact Seth Freudberg: sfreudberg@smbcap.com.

No relevant positions
Risk Disclaimer
Futures Risk Disclaimer

January 2nd, 2018

This week, Dan Passarelli, President of Market Taker Mentoring returns to the Options Tribe to share his view of what  2018  will bring for the markets as well as describe his planned options strategy for the coming year showing attendees exactly how to follow it. We looking forward to seeing you there!

Options Tribe meetings are generally free to the public and are held every Tuesday at 4:30PM ET. If you wish to register to this meeting, please click here.

We look forward to seeing you at the meeting!

Seth Freudberg
Director, SMB Options Training Program

The SMB Options Training Program is an eight-month program designed for novice and intermediate level options traders who are seeking an intensive training process to learn how to trade options spreads for monthly income. For more information on this program contact Seth Freudberg: sfreudberg@smbcap.com.

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Risk Disclaimer
Futures Risk Disclaimer

I had lunch with two developing traders today and asked them their PnL goals for 2018.  I was really curious to hear their responses.  My sense was they were a bit surprised to field this question from me.

At SMB we focus on process goals to drive results.  What are all of the things you need to do to hit your goals for 2018?  And when you do all these things, we find those with talent often surpass their goals.

PnL goals are often not a focus, as that depends on opportunity, trader talent and a trader’s personal learning curve.  One might be making excellent progress, without the PnL coming.  One trader at the firm was improving each month, setting himself up for his best year ever, without the PnL coming.  One developing trader might take longer to see PnL progress, but be right on track.  So a focus on PnL can often impede our overall goal of developing consistently profitable traders and then better.

But I have found that adding a PnL goal works for our traders.  I remember challenging a few of our 7-figure traders in 2017 to hit 30k in PnL for the month 4 years ago.  My sense is that challenge jump-started a new level of progress for these traders.  Our traders are so strong in process that adding this PnL goal often does not impede their progress.  It frames all the work that they need to do daily to reach their goals.

One trader at lunch thought 100k was the right goal for 2018.  Now with that goal he can work backwards.  What are all the things that I need to do, so that next year at this time, I can hit those numbers?

• What do I need to do with technology?
• What should my Team be doing to help me improve?
• How can I lean on Dr. Steenbarger to hit my goals?
• What review work must be done?
• What trades do I need to trade bigger?
• What health routine ought I to follow?
• What time should I get to bed?

Expectations can be a powerful driver of trading success.  Setting your sights on 100k might be an important step and motivating to do all that is necessary daily to recognizing your goal.

Just thinking you can make 100k won’t lead you to.  You do need the PlayBook and skills as well.

But seeing yourself as a 100k trader at the end of the year is important to your development as well.

Oh and to that trader who thinks they can hit 100k in 2018.  You’re damn right you can!

Your comments/feedback are always appreciated- mbellafiore@smbcap.com.

*no relevant positions

Adopting a Daily Report Card sparked the biggest improvement to our firm’s trading results in 2017.  Flatly, our firm had a very strong trading year.

Thxs to Nate from @InvestorsLive, and more importantly @Traders4ACause, for the shout out on how this has helped him.

I challenged the trading community, as a guest presenter, at this year’s Traders4ACause charity event:

What if at the end of each trading session, you posted a trading Report Card, and not just your trading PnL?

Dr. Steenbarger suggested that traders share a Daily Report Card with him and me after each trading session to spark improvement.

It has worked!

(Dr. Steenbarger offers a large contribution to the trading community in his new TraderFeed site here.)

Here is how it works, if you would like to adopt for your trading in 2018:

As we plan our goals for 2018, consider how you can give back, like to charities Traders4ACause.

Coach Pop of the NBA San Antonio Spurs said it well:

We may not be “rich as hell” like Pop, but for those with more than we need, the spirit of his thoughts apply.

Happy New Year!

I am grateful for your comments/feedback- mbellafiore@smbcap.com.

*no relevant posts

Here are the top 10 blog posts of 2017 from SMB:

This retail trader just crossed 100k in trading profits

The Failure Rate of a Proprietary Trader

Relative Volume (RVOL) Defined and Used

STP Vs. ECN

The End of Volatility

This trader is “killing it” as a scalper

Traders ask: VWAP?

Beginner’s Guide to Call Options: How They Work and What Happens after You Buy

What I Learned From The Best Trader at Citibank

Why this trader is “crushing it”

We appreciate your feedback/comments at info@smbcap.com.

*no relevant positions

January 9th, 2018

This week, Terry Liberman returns to the Options Tribe to discuss how traders can increasing their proficiency in using and capitalizing on their ability to whole-brain think, learn and practice, process information, make better decisions and plan in multiple time frames. You won’t want to miss Terry’s valuable wisdom on trader improvement, so we look forward to your attending!

Options Tribe meetings are generally free to the public and are held every Tuesday at 4:30PM ET. If you wish to register to this meeting, please click here.

We look forward to seeing you at the meeting!

Seth Freudberg
Director, SMB Options Training Program

The SMB Options Training Program is an eight-month program designed for novice and intermediate level options traders who are seeking an intensive training process to learn how to trade options spreads for monthly income. For more information on this program contact Seth Freudberg: sfreudberg@smbcap.com.

No relevant positions
Risk Disclaimer
Futures Risk Disclaimer

You want to trade better in 2018.

You develop goals and feel ready to improve.  Let me offer perspective from my seat managing a trading desk.

Each year our Floor Manager and I meet with all firm traders to review their yearly goals.  We are week 1 into this process this year.

Some best practices have arisen.  Common areas that need improvement have visited.  I share this post, with lessons we are being taught during these reviews, to help you develop more constructive goals for 2018.

I want to trade bigger!

This is a common goal of traders in our community and firm.  What does it take to do so effectively?  One of our consistently profitable traders created a wonderful template for us to emulate.  First, you must indentify the trading setups that you trade best.  You should measure them and demonstrate outperformance in PnL.  They ought to have names, these setups.  You should be able to describe in detail the variables that make up these trades.  And you ought to have a book of examples from 2017 trades of these setups.

One trader listed his 7 best trades and then developed a risk plan to trade all of them bigger.  Let’s build on this idea.

Next, develop a risk plan to trade your best setups bigger.  How much do you risk on these trades now?  How much do you want to increase your risk next month? What is your goal for end of year risk on these trades?  Map all of this out for your best trades.

*What if you are a new trader?  Well, then you are in the experimentation stage and should be most focused on trying different types of trades and showing PnL edge.

I want to be more consistent!

Great.  So far this is just and idea written on paper, next comes the action taken to realize your goals.

How do you become more consistent?

You trades your best setups more often and bigger.  You decrease the frequency, risk, and losses in your lesser trades.  This is an excellent area to track in daily reviews.  You spend a small percentage of each day researching new sources of edge and deploying small amounts of capital until you prove edge.

The most thoughtful reviews encompass a holistic plan for improvement in 2018.  Sleep.  Workouts.  Heath.  Diet. Fun. Relationships.  Family.

2018 will be defined by the daily intensive and effective work you do (best practices turned into habits), that compounds, trading, studying and researching setups with edge best for you, in the right culture for you.

Your feedback/comments/questions are welcome- mbellafiore@smbcap.com.

*no relevant positions

Your trading plan for 2018 is vitally important to your improvement as a trader.

A great plan can help you fulfill your potential. A poor plan can be self-sabotaging.

Here are three pro tips on proper planning for traders:

#1 Set two types of goals. While it’s fun to daydream about hitting big Performance goals. It’s the Process goals that will allow you to actually accomplish your performance goals. Spend A LOT more time on Process goals than you do on performance goals. You should review and journal about your Process goals each day. Maybe a few times per day…

#2 Realize that you may not know what is realistic in terms of performance goals. If you set unrealistic performance goals, you may feel like a failure when you are actually making good progress. Many traders abandon a great path to Consistently Profitable Trading because they don’t have someone to reaffirm that they are actually on the right path.

#3 Have an objective and impartial view of your trading strengths and weaknesses. Self-diagnosis is rarely a good idea. Not with health problems and not when you are deciding how you can fix your trading challenges.

For the rest of January, we are offering 2018 Private Trade Plan Consultations for a greatly reduced rate.

Click here to learn more about these personal consultations and the six ways they can benefit you.

These five pillars will help your trading consistency, which should be your ultimate goal.

Interestingly enough, the 5 pillars of trading success have nothing to do with the actual act of trading or even analyzing markets. They involve the work that goes into developing into a trader, as well as developing as a trader. The trades you end up making are simply a culmination of your preparation and your process for doing so. I challenge you to stop along the way during this article and challenge your own routines and processes. For those that haven’t already moved on to find the next sexy indicator for sale, let’s dive in.

1. Premarket Prep – Can you imagine any great endeavor in the world where prepping immediately before the activity is not necessary? Do you want your surgeon prepping before operating? Do you want your pilot prepping before takeoff? Your trading should be no different. So many “traders” wake up, grab a cup of coffee, and fire up the charts. This is very sad. How serious are you about prepping everything from your charts to your self?
2. Journaling – If you agree with me that it’s human nature to protect our own ego and self-worth, then you’ll agree with the following. Really be open minded here: If you do not have a documented account of what you were thinking, feeling, considering doing, or doing at any given point during the trading session, then the majority of the truth of what happened will be LOST to you. At the end of the session you will not remember things, your mind will even attempt to prevent pain and avoid facing truths. You will justify things, use hindsight to your advantage, and ultimately lie to yourself. Journal what you’re thinking and feeling. Journal why you do everything you do. This will become as valuable as gold to you I can assure you. Timestamp the journal entries. Do this and grow tenfold.
3. Review – Remember all those performance activities that prepped prior to their time to perform? Guess what, they also review afterwards. As a tennis player, I can’t tell you how eye opening and helpful it was to review film of myself playing. NFL teams gather after game day to review film. Things are starting to come together now. Remember that journaling we need to do? Oh yeah. Having that timestamped account of what we were actually thinking and doing at the hard right edge of the chart… that’s going to start to pay dividends as we review our session. What did we do well? Don’t forget that positive one- many traders only focus on the negatives. Know what you’re doing well. Also look at what you did poorly, what were you thinking at the time? What was your rationale at the time? What was your mind focused on? What should it have been focused on? How can you structure your trading going forward to help keep you focused on the right variables? Not only should we review good/bad decisions made, but also consider if we missed any opportunities. Don’t just look at a chart that went up a lot and say, “Oh yeah, I should have been long!” No no. Remember we must have a higher standard, we must not lie to ourselves about what we can and cannot do. Was this particular up move an opportunity according to how you define trade opportunity? There’s a big difference between a true missed trade versus a market move that was simply not a trade for you. Review your sessions, and grow twenty-fold.
4. Statistics – You are keeping at least basic stats on your trading right? You do understand that trading comes down to having a statistical edge right? You do know that an edge is derived from two main things… how often your trades are right (win percentage), and the ratio of your average winning trade to your average losing trade, right? It’s the tug-of-war between Win% and Win:Loss ratio that tells us just about everything we need to know about our trading performance. Have an understanding of these two things. Know how they evolve over time, over decent sample size. How these drift over time tells you exactly what is going on with your trading, or how markets are changing. Don’t get attached to any stats as an intraday trader of less than a 20-trade sample size. Keep your stats basic until you have shown through journaling and review that you are at least in control of your trading.
5. Process – This is a biggie. Process permeates through each of these. Imagine a big PROCESS in the middle and then preparation, journaling, review, and stats all around. In one sense we can have a process for doing each of the prior 4 pillars. In another sense, we can say that our trading process is a set of guidelines, checklists, rules, etc for making trading decisions. This is true and of utmost importance for a discretionary trader. It’s a form of mental toughness really- it allows me something to lean on for decision-making when my emotions could be running high. There’s a third way we can use the term process for a trader though, and that’s where I want us to focus. For me, process in trading is more of a way of life. It’s a mentality. It guides each and every day by the use of process goals – something I want to get better at and execute well this day, not tomorrow, not someday, but today. I’m sold out to this way of trading. 95% of traders out there just want to be better, but they do not come up with a way of practicing and putting extreme emphasis on specific skill development. Having a daily process goal will fix this immediately.

It all comes full circle. In fact, this entire 5 pillar thing is so intertwined that I don’t know where the process begins or ends. Each morning my premarket prep involves preparing to execute according to my process goal which was set the prior day during my review session, which was largely derived from what happened in my journal that prior day during the session. The stats is akin to a car on a journey making a left or right turn, while the rest of this is more like the tiny adjustments we make constantly as a part of driving.

Use all 5 pillars in strong harmony, and watch your trading consistency blossom. Fifty-fold!

-Merritt

*No relevant positions.

January 16th, 2018

This week, SMB Capital Options Desk Trader John Locke returns to the Options Tribe to discuss the trades which comprise the Super Simple Spreads trading systems.

Options Tribe meetings are generally free to the public and are held every Tuesday at 4:30PM ET. If you wish to register to this meeting, please click here.

We look forward to seeing you at the meeting!

Seth Freudberg
Director, SMB Options Training Program

The SMB Options Training Program is an eight-month program designed for novice and intermediate level options traders who are seeking an intensive training process to learn how to trade options spreads for monthly income. For more information on this program contact Seth Freudberg: sfreudberg@smbcap.com.

No relevant positions
Risk Disclaimer
Futures Risk Disclaimer

Many traders make the mistake of trading in too many different styles, only a few of which have been sustainably successful for that particular trader. It’s much better to apply the majority of your capital to strategies that have been sustainably successful for you. In this video we draw an analogy to hitting in baseball and how swinging at the right pitches most of the time is the best formula for success.

2017 was a very strong year for our trading desk in NYC.

After such a strong year it is important to study what went well so we can do more of it in 2018.

So what worked well for our trading desk in 2017?

Team Trading

Senior traders who embraced building Teams made more.  Junior traders who were willing to assist learned more and sped up their learning curve.  This Team is an example.  

The Daily Report Card

The Daily Report Card sparked our biggest improvement in 2017.  You can find more about that here.

Trading Bigger

Responsibly and consistently increasing size, in measured edge and where trader has shown consistency, helped traders increase their trading size and make more. Here is an anecdote of a firm trader successfully trading bigger.  One firm trading manager in Austin says this well to traders by asking them to set risk per trade and the stop and using that to quantify if they are big enough.

Stock selection

Trading the right stocks.  Dr. Steenbarger said it well in this post about key ingredients to success in 2017 that he observed: what you trade is as important as how you trade.

Cryptocurrencies and Blockchain

Open mindedness to bitcoin, other cryptocurrencies, and blockchain opportunities was key.  For example, experienced and stagnant traders started trading these opportunities and seeing solid PnL improvement.    

Sticking to the process

Sticking to the process! Even if trader is not seeing PnL jump immediately.  One senior trader stuck to his process and then experienced new success levels.  

Doing more with technology

Weekly technology meeting for Teams is a best practice to build on in 2018.  Meetings once a week as a Team and discussing what can be built to help the Team make more and play more offensive with their best trades is an excellent best practice.

Improved trader training

New hires are much better versed in technology and modeling because of our revamped Trader Development.  Once a week our head automated trader in NYC held a class on technology and modeling.

2017 was a strong trading year for NYC.  We have challenged traders to develop trading goals for 2018, building from 2017.  And we have started meeting with traders individually to start planning their improvement for 2018.

We are grateful for your feedback/comments/questions- mbellafiore@smbcap.com.

*no relevant positions

It’s the end of the trading session. You’re a good boy- so you’ve definitely journaled and now you’re ready to begin your post-market review. This is where things get interesting for me as a mentor.

Let’s consider two traders: Overly Negative Nick, and Ignorantly Positive Pablo. They both made the exact same trade decisions that session, but let’s see how they review.

Overly Negative Nick’s review:

I just suck. I suck so bad. I ALWAYS make the wrong decisions! When I take a quick profit, the market runs, and when I hold for a big win, the damn thing turns on me! Agghhhh!!!!!!

My analysis was SO right. I totally knew the market was headed higher today. I was just a complete idiot trying stupid short ideas.

Ignorantly Positive Pablo’s review:

Didn’t make profits today, but that’s ok! I felt really good about my trading today. I absolutely did a great job managing risk and kept losers small enough.

Sure, I went against my premarket plans with a few short attempts, but that’s ok I won’t ever be perfect! This game is not about perfection! I have great resiliency and a great attitude that I will prevail. Another great thing was that my premarket analysis was spot on, I really saw what the market was looking to do that day (head higher) and it absolutely did that. Keep up that great premarket analysis.

Yuck! Both Overly Negative Nick and Ignorantly Positive Pablo are in trouble! Sure some of the above may seem silly, but I can assure you I see this type of talk frequently as I begin working with traders. What’s the real point we’re making here? Both of these traders are avoiding the truth.  They’re avoiding truths in very different ways, but ultimately it’s the same form of human nature to avoid the discomfort that accompanies truth. Do you recognize yourself in either of these traders? I would argue that this truth avoidance is really a coping mechanism in the face of stress/adversity. I think Dr. Steenbarger provides a great article on self-coaching with regard to improving coping.

 of these traders are really using their “reviews” to improve. They’re spitting out some general platitudes that do no one any good. They should be looking at what actions they took, why they took them, and how those actions compare with their PROCESS for trading. This should be done objectively. Traders of all personality types would be served well to quit seeing things so much as “good” and “bad”, but rather see actions made, and their rationale, from a more neutral perspective. Notice I said “using reviews to improve” which implies that the review at the end of the session is really the same thing as a beginning of something new. This is critical, and I’m reminded of yet another Dr. Steenbarger article on this cycle of growth from a self-coaching perspective.

You are on a journey of improvement. Errors will happen. They should not be totally avoided by being Ignorantly Positive. All negatives are not “negative”. It’s just your perception of them, or more importantly how you react to them. On the opposite end of the spectrum, you should not belittle yourself and continually talk down to yourself with regard to “negatives” as Overly Negative Nick did. Even myself and other traders on the desk that have access to the best coaches and mentors on the street ultimately have to self coach for most of our working day. Learning how to better self coach, is a talent within itself worth developing.

Ideally we want to be Balanced Bob. We need to objectively review performance. Balanced Bob doesn’t avoid the truth of mistakes and his shortcomings. Balanced Bob will readily admit negatives to himself without being overly critical of himself.

Use the mirror of negatives to reflect back and see a truth. Use that information to move forward with an actual plan for improving, armed with the truth. This lets you set a specific course of action for improvement next session.

Trade well,

Merritt

*No relevant positions.

January 23rd, 2018

This week, Dan Passarelli, President of Market Taker Mentoring returns to the Options Tribe to share his view of what 2018 will bring for the markets as well as describe his planned options strategy for the coming year showing attendees exactly how to follow it. We looking forward to seeing you there!

Options Tribe meetings are generally free to the public and are held every Tuesday at 4:30PM ET. If you wish to register to this meeting, please click here.

We look forward to seeing you at the meeting!

Seth Freudberg
Director, SMB Options Training Program

The SMB Options Training Program is an eight-month program designed for novice and intermediate level options traders who are seeking an intensive training process to learn how to trade options spreads for monthly income. For more information on this program contact Seth Freudberg: sfreudberg@smbcap.com.

No relevant positions
Risk Disclaimer
Futures Risk Disclaimer

Options income trades can be differentiated by whether the trades feature adjustment protocols or not. If the trade does not feature an adjustment protocol, in other words it is a “no-touch” options strategy, then it does not require any management other than closing the trade at a target profit, or a maximum loss. in this video we discuss why it’s a bad idea to adjust a trade that was not designed to be adjusted.

I will be presenting at the TradersExpo in NYC, which you can attend from Feb 25-27.

I will be presenting on a panel spearheaded by my friend John Netto- Profiting in the New Market Ecosystem.

I will also be presenting: Two Trades Working Best in Current Market Conditions.

We offer a unique perspective to those who attend.  We are a PnL proprietary trading desk, actively trading stocks, options, futures and engaged in automated trading.  We have a history of training traders from new to 7-figure traders.

The firm, a JV between SMB and KTG, provides all the capital and takes all the risk for its traders.

We share lessons that the market has taught us.  We share lessons from observing new traders become 7-figure traders.  Simply, our home-grown top traders are role models from which other traders can emulate to improve their trading.

Please come join us and stay around after to say hi, ask questions and talk trading.  My favorite part is meeting traders after a presentation.  We actually have hired traders after meeting them at the TradersExpo for our PnL proprietary trading desk.

From TradersExpo:

TradersEXPO, the largest and only conference designed specifically for active traders, is headed back to New York for the 16^th year featuring new topics on global macro, cryptocurrencies, and futures trading, more hands-on training, and even better networking opportunities.

Register now to secure your spot, and attend February 25-27 to improve your trading knowledge.

Visit NewYorkTradersEXPO.com for complete details.

We are grateful for your feedback/questions/comments- mbellafiore@smbcap.com.

*no relevant positions