Top Senior Trader on what it takes to become a successful trader

let's say you want to become a successful trader but you're not sure who to listen to or what to do to become successful you fear you're learning the wrong lessons or you're listening to the wrong people this can be extremely frustrating particularly for those who want so badly something that's important to them well that's why we made this video in this video our top senior trader sits down with our newest hires at our trading desk in New York City and tells them what it takes to become a successful trader stick around and get some quality advice from one of the top short-term traders on the street [Music] hi I'm Mike bellifiore managing partner of SMB Capital a proprietary trading firm located in midtown Manhattan I'm also the author of the trading classic won't go trade and the playbook click our subscribe button so you don't miss any of our trading videos produced for the trading community in this video our top trader on our trading desk in New York City one of the best short-term traders on the street shares what it takes to become a successful trader and the shredder answers questions from our newest hires at our trading firm on trading and covers topics from trader psychology to trading setups please pay special attention to this traders ultimate goal it may very well surprise you if you want to learn 3 more real-world setups that our top traders use including the simple setup that we teach all of our new traders and the setup that turned one of our traders into a seven-figure big money earner check out our free webinar that we're currently running just go ahead and click this link to sign up for the free webinar right now you're gonna learn more in a couple of hours from this trading workshop then from years of online education I wanted to talk to you guys about you know starting out and kind of what it takes and the attitude you need and that sort of thing because you know I think it's easy for Bella or Carlton or someone that you hear every day but I think I can give you a good perspective on those things so you know if you guys look around the room you're in a class of what 10 12 people you know the reality of the situation is everyone thinks that they're gonna be you know the biggest best baddest trader but only maybe two of you guys are gonna be around in two years and that's just the truth so you know if you want that to be you you know you really have to put in the right amount of work and you have to have the right kind of approach to to the thing no one's gonna come in here and make a lot of money right away it's just not going to happen whatever has and you know no one ever will and it's gonna take a lot of everyday work and getting better every day's cliches that is in a lot of screen time and experience you know to make it really so you know you see the a lot of the experience guys in here coming in right before the clothes you know they leave it for but you know the knee you know the reality is that's habits that had been formed over years and years and when we were all here at the beginning and I was I was in here at 7:38 and I was staying till 5:30 6:00 every day reviewing doing anything I can to get better journaling reading everything I could get my hands on and you know now almost like an athlete if you're Roger Federer or something you're not gonna be practicing ten hours a day because your body can't handle it Metheny that's really you know you want to be the person that's working the hardest and and the amount that you put in is is gonna pay so that's number one you know number two about focusing on on what you should be learning about you know learning setups and trading bull flags bear flags reading the tape and all that will come with experience it's not rocket science trading is not as far as an intellectual thing you have to be smart enough but it's not like you have to be an MIT grad or anything to be successful it's really psychology that's 80% of the difference with with people that make it and people that don't so I recommend you know reading everything you can about trading psychology you know Stan Barger who's in here has a number of good resources Mark Douglas as a few books you know other books such as how we decide you know books on decision making and peak performance and that sort of thing I highly recommend that way you can really put your your head around what you know the decision-making process your emotional awareness your emotional intelligence and and those are the things that successful traders have over over the don't make it so the other thing is you might see me or you see swing or a for new traders on the desk and you know I want to be them I want to be them but you know everyone has a different personality and you should be taking from us what you see that works and if it works for you that's great and especially at the beginning yet you should be emulating some of the people that are making money but eventually you're gonna really have to think about what works for you what's your time frame are you a quick thinker you a slow thinker do you like research you know maybe you like filters and technology maybe you like more discretionary trading and you're more of a feel sort of sort of guy like I am and and that sort of thing you really have to learn about what you like and what works for you so copying people is good to do at the beginning but it's never gonna get you all the way so that's another another piece of advice what else I guess I don't really have too much I will open it up for you guys as far as questions about starting out about certain stocks whatever you want and then maybe we can start a little bit of a discussion that way so anyone Bueller so I'm pushing about my socks after I see how best people can't be shorties it's fall off we keep making awesome I water ski mr. eshton a recent argument so like what's the all-time like assault process behind it's like when this stuff doesn't show anything we can say these are general ready pilots but I keep just trying to shorten yeah I guess there's a few thoughts you know for that one it will be eventual short and the way I'm approaching it is I've kind of been scaling into it and I've been buying calls to head you out my risk so basically I've kind of been shorting it 80s into today and then in building a position and then I have kind of a half-size position and then in today when it ever breaks down I'll try to add a lot more size so you know these are the sort of stocks I'd do well in over time and it's not going to be an overnight thing but if you're trading it in today there's nothing wrong with going along them and if you see the momentum for me something that's come the way I'm looking at it is more of a bigger picture trade and not like a 1 minute 5 minute 10 minute trade because you know this thing I peeled at $20 about two months ago and if IPO near your fair value and now it's worth seven or eight billion dollars and it's just not gonna stay up here and it's it's a big short squeeze so it's a matter of time and and I'm kind of structuring it so I have a few weeks for it to play out basically so but that's that said you know there's nothing wrong with you see intraday a little consolidation there's short strat and go long and and write it out a little bit if something's up to three days in a row I just wouldn't be hanging on to it if it goes against you this that's the only thing anyone else yes can you try to talk about like trading psychology as it relates to like when you're looking at a stock and it seems like let's just say it closely it's gonna break out and it just pops and fails how do you like get your head around like that kind of think the other way and realize like that might happen or like do you realize that did you know who like causes those moves and like it just seems like a training a lot of things what do you think something's gonna happen and it's like so they exact opposite things have happen to get the changer mind sure I know a few things for one whenever you're getting into a trade you know it's never it's never gonna work out how you want the the nature of trading is you you are the casino so you want to make high probability bit bets that have high expectancy so something that's gonna work forty percent of the time but it gives you four to one reward is still a good bet if you do it a thousand times so a lot of your trades aren't gonna work and so you don't want to get into attitude of thinking it's gonna work perfectly and then that gives you a little bit of a bias to how it should should act so for one you want to have if-then situations for a variety of number of things and you know where you're wrong on every trade and and just because it breaks out and goes down doesn't mean it's immediately gonna be a short and so that's fine if you're playing a breakout pattern it doesn't work you know there's it could be a really good trait you know and when you're evaluating your trades at the end of the day you should praise yourself for taking that trade and not beat yourself up because you lost money so yeah you want to have multiple scenarios and don't don't get a you know sometimes your if-then scenario could be like well you know if it goes above the level I'll buy it and hit out right below it and then if it gets above that high again I'll buy it again and I'll give it a little bit of water stop at half half size and that could be your plan so you want to have a more detailed plan is probably my answer to that can you think of any example where you find yourself developing like that in your tree and possibly how you overcame not sure that's a good question um yeah I have bad habits and I think the good thing about that is I'm aware of them and I and then I can nip them in the butt as they happen so the way I'm kind of finding out my bad habits is just reviewing all my trades throughout the day then all of a sudden two or three days in a row you see oh I made the same mistake and and it's costing me a lot of money well then I'm gonna end up making that my goal for the next week or two and every day I'm gonna evaluate myself on it and I think about I'm gonna think about it throughout the day I'm gonna think about it before the day in that way as it's happening and as you practice more you're gonna be more and more aware of you doing it and then you'll be able to kind of change your habit and you know give yourself a reward if you're doing if you're doing good on it so one of my bad habits is trying to trade out of a position you know basically ad scale out or average in or whatever just to kind of get out of the position and and and it and taking that one step further just starting my scales and things too early if I have a strong idea so you know over time I've gotten better I'm still never gonna be perfect but I'm aware of those because of doing the reviews and journaling every day so that that's the way that I would try to get better at that so you're really good trading day and you feel like that day you've seen everything clearly made money mm-hmm and I everything just went well and then you come the next day some complete ups and you feel like you didn't execute anything correctly couldn't see anything clearly how do you sort of handle that situation well it becomes a lot easier when you have a lot of experience for one but how do you handle that situation well you want to think about now every day especially the really good days and especially the really bad days you always want to view that as an opportunity to learn you know if you leave a day and you're like kicked ass you know there's always gonna be a better day you can't be too high on it and if you you know have your worst day ever you know that's not gonna be your worst day ever you're probably gonna have a worse day so trading is about kind of keeping yourself not too high not too low and above all just learning from the situation so if you had a terrible day and you couldn't see things well why well you're not focused did you not get enough sleep what happened throughout the day were you down money and then you tried to make it back in revenge Jade were you up money and trade it too tight and you got desk by thousand you know it's it all comes back to what I said before you know what are your patterns and behavior and if you're if your journaling them every day you should get better at making those days less frequent because you'll notice the patterns throughout the day that lead to that so you know more than anything a losing day you can view as kind of tuition to the market and and that's how you want to look at it and there's a lot of information in it so some of your best days for your development can be your worst days and at the time they don't feel great but that's what takes you to the next level you know I had a day where I lost you know three hundred thousand dollars in one day and that sounded you know that was a terrible day but you know when I came back from that I was so much more resilient and I could trade so much more sighs because I had come back from it and and in the end it actually was a beneficial experience to me so that's the perfect example of that discretionary free and how do you get rid of your trips and each overtime but the I mean that is my very often what I mean since you're taking so little trip somebody go and by the end of the year then you mister wonder and realized hey well I'm not necessarily a long-term trader I you know most of my trades are within a week you know no longer than two or three weeks on rare situations but you know you you should be plugging your trades into trader view and then uh developing your database of trades I we used to have a few proprietary systems where we could spit out some numbers which I'm actually gonna probably try to get back but uh but yeah a trader view is a good way to you know look at your stats I always look at my stocks which stocks I'm making money in which stocks I'm losing money and thinking about why and what were the characteristics do they share some characteristics and you know I had quite frankly I should be better about stat crunching and just over time I've kind of little comfortable but you guys should be putting all your trades in traitor view especially as you're starting and don't jump to to too many conclusions from a small sample size but as you kind of have six months of experience there a year of experience you know look at what stocks you do well what's the liquidity what's the price you know what's the range of them what's the our ball how are you doing on small cats market stocks earnings plays that sort of thing yeah you want to attract attract those sort of things with Internet clusters are you used to use then just really recent you know I have such I don't think that there's a I'm not like a set into one trade so basically how I look at is I kind of have a bag of tricks you know 15 or 20 different tricks and the market environment is constantly changing and it's all about adapting to what's working to the market environment more than my edge just disappearing so more so I'd be kind of paying attention to oh maybe for a week this trade that I'm making is not working you know all breakouts are failing and I'm looking through charts every night and I'm seeing certain patterns that just aren't working anymore and and then I'm trying to adapt to the next patterns that are so it's more so that then you know other other traders for example are very reliant on like imbalanced trades and you know that's an edge that can disappear for sure I you know I don't really look it like that I'm more of a flow trader with kind of the market environment so it's a little different how do you separate a different session of the day like at one fitting day my deeds of mornings like normal trade work that are usually watched tiny endoscopy what's a long search yeah in the morning you want to be a lot quicker taking profits you can do more tape reading you know things touch a lot of prices so you can move around a lot more in stocks and then you know as you get through the morning and into the afternoon usually I'd probably have a few ideas that worked in the morning that I'm leaving trailers on and I might be recycling shares in them so if they're dipping it's a long I might be buying some back and selling them on rallies in that sort of situation and then you know playing less breakouts not paying highs or hitting lows in the middle of the day doing more with the trades already on and not as many new trades probably and then as you get into the clothes things tend to tent trend into clothes so last hour the day you don't want to fade anything that's spiking in the middle of day on the other hand if something gets you know really far from view app on either side you might want to think of a mean version trade so yeah over time you know you kind of break those day and you have different kind of playbook for different times in the day basically so I would just wouldn't do too much momentum and tape reading and reading into every little tick in the mellah day you tear yourself up okay so me just have like any morning because it sends out good traits in the morning then towards like 12 and on if you've everything back sell over trading sir so you're probably you know you like probably momentum and all that stuff and certainly there's a lot of traders that do 90% of their trading in the first hour of the day and there are times where things are completely dead in the middle of day and you know again you want to use that as information so the same trade you're making in the morning that look like the same trades in the afternoon actually aren't probably because of the time of day and the volume and the pace so just try to trade things that have more pace in the in the Box like you know things are fluttering more and more volume and and yeah that's certainly a possibility but I think you know as you're starting out you can just use that as information and try to get better and try to figure out what works in the middle of the day and maybe use that as journaling or other things that can kind of make you successful and not necessarily trading all the time just because you want to trade ya know trade is sometimes the best trade so anyone else outside of you know I was never motivated in trading by money you know that is as cliche as it sounds you know yeah I've seen everyone that comes in that wants to you know drive a nice car or do this or that it just doesn't work out for that mom so I like the challenge I've always liked playing games and I like the fact that trading you can always be a better version of yourself and so you know there's no ceiling you can have these goals and you can always set goals and be being the process of chasing them and it's it's definitely very fulfilling to to you know set a goal and work at it every day and then finally get there and then you said another one in that the whole process of the chase is really what's what's great so yeah that that motivates me and anymore I want I want to be the best trader like you know how best short-term trader there is and that what motivates me now and the money just happens if I'm successful at that basically just in there for me repair my situation I think I think from you guys and I'm just starting out with this like a year veteran like I have only loved three hours of the US market so from one sure it's right and I am here because I want to really find out if it's realistic for me to try try to close so if you're in my setup or every step a step or something that I could help in a research in advance and do the trade for the clothes yeah that date so I don't know radiation itself I thought that it would be possible but yeah I mean there are certain setups I think that you could gravitate towards I mean I think it's gonna be a difficult proposition to only be able to see a few hours of the market you know it takes a lot of experience and a lot of screen time to really make it work what I might recommend is just doing some swing trades basically and looking at daily charts and find things that are closing strong that aren't to extend it and looking for maybe continuation for a couple days and some multi day trading I think if you want to just sit down at the close and day trade for three hours you know that's just gonna be really hard and just being being brutally honest that's gonna be a difficult proposition but I think if you kind of do more swing trading and maybe you can log in for just a couple minutes at work on the open and manage your positions or put stops in I think I might look at alpha trends also as as a good resource for that sort of trading so I would recommend maybe maybe trying that out a little bit but you know yeah if you want to do trading imbalances and stuff like that then you might be able to do just too close and some of the people in Austin just trade the morning in the clothes but you know it's gonna be hard I think yeah yeah and if you want to stop by one of these days I can show you maybe some patterns that I think might work for you okay what's something that may be a type of trader could learn from the discretionary trader well I think that uh you know matching a discretionary Twitter and a quant is often a great thing because the discretionary guy can kind of come up with the patterns that the quant guy would kind of program so you know the discretionary trader says I'm looking at this this is and then the quant guys are oh I can tabulate that with this set up and then I can give you ideas to model basically rather than just kind of shooting fish in a barrel throwing numbers at so I think that's a good good mix yeah so how do you have just a mentality when you have a big idea it's like saying you think this let's make shorts I just keep going higher don't you in your house and you have big downside just kind of you thought I was like these I'm sorry about my decision like say my idea would be yeah well I mean for one I'm not just blindly shorting it you know I'm always gonna have a number where I could lose and I'm always gonna you know having a plan for if I'm wrong and I'm not gonna be stubborn about taking my losses like this particular trade in TLR why you know I'm completely hedged out if it gets above like a hum 103 or something I'll have my max loss on the trade and and I'm not necessarily gonna be adding to it at that point or certain my time frame so you know the it sometimes can be hard sticking with something but I think when you have enough experience and you've you've really nailed a few of those trades and you have a really deep understanding for them then it gives you a little bit more resilience to stick with it and I know you know this thing will be in the 60s at some point this year probably sooner rather than later and it's just based on experience of other other things but I could completely be wrong and I'll take my lickin and I'll move on to other things um so it's a hard balance of knowing when to give up I think as a newer trader maybe you want to have a three-strike rule or something along those lines you know I think that I when I see the gap between the fundamental price and the price that is trading and it keeps on getting wider you know it it just becomes a better setup and maybe you have to put a max loss on it or shorten your time frame like I said or hedge out whatever you got to do but I'm always gonna stick with those setups because they don't come around that often so would you feel like it's better to use like options to share those values no not necessarily I think more than anything you probably want to wait for you know a really good level to trade against so just maybe miss the first drop and then you'll have a good high to short against and you know in this case it seemed like the high was in and now it's back up there it's not often that that happens but just wait probably be tomorrow the next day let it have its first three four five six dollar drop and then try to find a way in that would be my advice rather than trying to top ticket without a plan that it's just adding with no because it's up too much it's never it's never a trade that's how you blow up hmmm else what do you get it I get on you get off and then the next day shows a direct but simple it was mystic doing the internet bubble you can post it also and maybe even take down after wasn't working very me yes so would you get it would you get into it oh sure I mean always getting stopped out of things and getting back in certainly a lot of times trades take three four or five times try as a lot of time you know as long as it's worth long as the set up is worth trying it that many times it's not like a earnings play and you're just buying the breakup hitting the breakdown and a little stupid intraday chart like that but like this TL ry for me is a a plus situation and I'm gonna try four or five times and I've gotten stopped out I've made a lot of money I had then I've lost a lot of money on it but I'm gonna stick with it and and try it with some tight stops until I get it basically um so yeah I'm never gonna try something once and I'm always going to allocate risk to have have to try it multiple times go ahead and click our subscribe button so you don't miss any of our trading videos produced for the trading community and please add your feedback in the comments section for what videos you'd like for us to produce next and what you found helpful from this video from all of us at SMB Trello [Music] [Music]

Channel: SMB Capital

Views: 324,714

Rating: 4.8463087 out of 5

Keywords: stock market, day trading, smb capital, trading, investing, markets, wall street, stock trading, options trading, options income, economics, finance, Top Senior Trader on what it takes to become a successful trader

Id: -pjZwJgqk10

Length: 27min 57sec (1677 seconds)

Published: Wed Sep 12 2018

Reddit Comments

[u/NGski86]

SMB has a TON of usefull content on YT. TONS

[u/NGski86]

Im about to order the books Mike wrote. Sounds like good traders everywhere have been able to pull a lot good knowledge out of them.