4 Crucial Ingredients to Add to Your Trading Recipe
Many developing and new traders struggle with comprehending the difference between the trades that will work from the trades that will not work, so veteran trader Mike Bellafiore of SMB Capital suggests they spice up their smart trade ideas with these four extra ingredients.
Here's what I see from my seat as the managing partner of a proprietary trading desk in NYC with underperforming experienced traders. Add four ingredients to your trades.
They do a wonderful job of developing trading ideas. They have many of them and many of them work. But too many of them do not work. And they mostly just trade their ideas, without overlaying other ingredients to increase their trading edge.
And worse, they fail to understand the difference between the trades that will work from the trades that will not work.
Many developing and new traders struggle with this same issue.
So how do we improve?
Sprinkle four ingredients onto your smart trade ideas.
- Trade ideas that also have a news catalyst. Is there a news catalyst that will excite others to see your idea? A news catalyst attracts big money traders that can reward you with outsized moves.
- Wait for price confirmation. You are one trader, with one set of ideas. You do not move the market. Develop a thesis and then let price action confirm your thesis.
- Fight for price. It makes a very large difference what price you enter. This determines your stops. This determines the risk:reward in your trades. To read the entire article click here.
By Mike Bellafiore of SMB Capital