Author: Mike Bellafiore

Learned optimism – Martin Seligman
Diary of a professional commodity trader – Peter Brandt
The art and science of technical analysis – Adam Grimes
Technical Analysis using multiple timeframes – Brian Shannon
One shot one kill: precision trading using technical analysis – John Netto
Mindset – Carol Dweck
The daily trading coach
Enhancing trader performance
Trading in the zone
Market mind games
The talent code ✅
🧑‍💻The failure rate of a professional trader – author
The inner voice of trading – Michael Martin
Market mind games – Denise Shull
Talen is overrated – Geoff Colvin
Flow – Mihaly Csikszentmihalyi
alphatrends.com
SMB blog
The big picture
Mish
Jeff Miller
Abnormal returns
Steven place
the Kirk report
Seeking alpha
Kass
Tickerville
Dr. Brett
Enhancing trader performance – Dr. Steenbarger
The happiness advantage – Shawn Achor
Dr. Seligman
Bounce – Matthew Syed
The Trading Book – Anne-Marie Baiynd

Love is a powerful motivator.
→PN: There seems to be a common theme among traders who changed into successful traders due to having their backs against the wall and no other choice but to shapen up their act such as having a baby on the way.

>You must get better every day.

>Even though trading is so very challenging, you can do it!

But the right path to success does matter. The daily rehearsal, daily practice, daily thinking, daily trade talking, and daily review are critical.
→You must embrace the mindset to improve every day, build from your strengths, and develop your PlayBook.

☕We should absorb difficult events and learn to look beyond the hardship to recognize those moments in our life that appear catastrophic and to embrace them as opportunities to open our minds for the good that could follow next.

After each trading session, I ask the players on our desk(and now you?) to archive a trading setup that made the most sense to them during that day. They archive this play in a template form, which we share; the SMB PlayBook. This exercise brands their winning trades in their trading brain, synthesizes the most important market patterns for them to study, and helps them internalize their best trading setups so that they trade them instinctively in real-time.

I do encourage you to develop a similar system of archiving your best trading setups that makes the most sense to you in the format that works best for you.
If you have not developed your PlayBook, you should.

>All traders should build a PlayBook

To be a pro, you must learn first to think like a pro.
The PlayBook
“Use whatever works, and take it from wherever you can find it.” – Bruce Lee

The PlayBook is a series of archived trades that make the most sense to you.
The idea is for you to build from your strengths and minimize your weaknesses.

We make trading decisions based on 5 indicators, or checks:
1. The Big Picture
2. Intraday Fundamentals
3. Technical Analysis
4. Reading the Tape
5. Intuition

Many novice pedestrian traders focus on the next position. Consistently successful traders focus on the process and care little about the outcome of the next trade. The distinction is enormous.

Trade Strategy: Trend Trend Short
Trade a stock in play the day after it had negative fresh news.
∙Determine the most important intraday levels from day one of the Stock In play.
∙Find the intraday low and the prices where increased volume was done. These prices can be used for a powerful trend trend short Second Day Play.
∙Look for stocks that have moved ±5% on day one, trended down, and closed near the bottom intraday.
∙Short when the stock holds below an important technical price from day one and hold until there is a Reason2Cover.

Top 10 ways the PlayBook can help your trading:
1. Find the best setups *for you.*
2. Eliminate the trade not worth your intellectual, emotional, and financial capital.
3. Get bigger in your A+ setups.
4. Hold your trades for the real move.
5. Sidestep those annoying HFTs.
6. Accelerate your learning curve.
7. Lower your trading stress and pull the trigger.
8. Take the first step toward developing auto strategies.
9. Think through your trades like a pro so that you can adapt when the market changes.
10. Align yourself with the future of trading.

Taking the time to archive your best setups for each trading session will speed up your learning curve.

When you make a trade in real-time, that is one rep. When you take the time after the close to archive that setup, that is another rep. When you review that setup, that is another rep. When you share this trade with your desk and discuss it with another trader, this is another rep. From past research we can conclude, your brain makes no distinction between trading live and thinking of a trade as live. All of this adds trading experience for your trading brain. All of this increases your chances of making it in the game.

What is the future career path for a trader? It’s to be a multi-market, multi-product bionic discretionary quant trader, all made possible by the PlayBook.

Trade like a Shark
The hard part about these reviews is the ability to do them in detail every day no matter what your mood or energy level after the close.

The greatest value to this work is that with each successive day, the work compounds, leading to slow but meaningful improvement.

The recording of your best trades helps you trade these setups better in real-time. You are starting the slow process of internalizing your best setups and building intuition, the gift possessed by only the experienced trader. You make these trades your own so that you can instinctively execute them in real-time.

Focus on the following during your trade review:
•What setups worked best for them?
• What did the setup look like that worked best for them? Was there a catalyst before the big move in their best setup? If so, we want the trader to replay this by archiving exactly what the stock looked like before the big move.
• Where could the trader have been bigger responsibly?
• What is not working in his trading and should be eliminated?
• What stocks are they trading well?
• What stocks do not fit their trading eye? (I can’t trade SNDK. I trade GS worse.)
• Are they trading better during the open, midday or close? If so why? And what adjustment should be made to correct timeframe underperformance and maximize time frame over-performance?
• Are they trading efficiently by adding enough liquidity? Are they bidding and offering to buy stock or just hitting the bids and taking offers? The latter is sign of bad trading.
• Are they keeping their losses small?
• Overall, how can they improve?
Take away the importance of developing a detailed trading review after every close.

Trading Checklist
• Was I in control of my trading?
• Did I manage my risk correctly?
• Did I stay with my winners?
• Did I add to my winning trades when they started to work?
• Did I have enough size in my conviction trades?
• Did I break any of my trading rules and, if so, why?
And they also keep a psychology journal.

Psychology Journal Example
What I Am Working on This Month and Where My Focus Is
This month is the first month of the trading year and the first month that I take my game to a new level as a trader. I am entering my tenth month and I am ready to start making consistent money. This month I am focusing heavily on deliberate practice in everything that I do, and I am devoting everything that I have to mastering my craft and improving my trading. My mind has never been this right and ready for something. I hear from people that sometimes you just “know” when you are ready, and I have that feeling. I am ready to let myself be successful and become the trader that I know I can be. I am focusing this month heavily on trading psychology and am working on acquiring the ideal trading mindset. This will take time and a lot of hard work and self-observation, but I am ready to look at myself in the mirror and ask myself the hard questions.
This Week’s Goals
•Take every trade that I identify as having an edge in.
•Add and hold on to my winnings.
•Work on getting more size on my initial entries within my risk parameters.
•Improve trading around a core.

>Improve every day.

📝When you make a great trade, you must go back and review it, focusing on how you could have been bigger responsibly.

You do have to find a way to review your work that make sense to you. It’s this review process that helps you internalize your trading, which will get you to perform better. Without it, there is no increased P&L.

Example of Daily Routine
Morning:
• Wake up and check quotes of indices.
• Come in and check news via seeking alpha/smbscanner.
• Look at volume advancers from day before.
• Look at chart for every stock that trades 1 million average volume and above 50c average true range.
• Journal: Write down my goal for the day; free-write about how I’m feeling. Anything else that might affect my trading and ask myself the best strategy to do well for the day.
After close:
• Chop tracker routine I send you while looking at execution bubbles on my chart.
• Journal: How I did on my goal/what I did well/poor/different/my game plan for tomorrow, and a few annotated charts of things I messed up on.
• Separate journal about my general thoughts or how I felt about the day or anything else really I feel like writing.
• PlayBook: Usually about a trade that I should have done better.
• Sometimes I watch tape (used to do it more when I first started).
• Watch Brian Shannon’s video/daily recap when I’m at the gym or at home.

Each trader must develop his own list of Reasons2Sell.
Reasons2Sell examples:
•The stock breaks its uptrend.
•Breaking news.
•Overall market resistance.
•Technical resistance in the stock.
•The selling pattern dissipated.
•Breaking news in the market.

The most common Reasons2Sell:
•Stock hits your price target.
•Intraday uptrend is broken.
•Breaking news about the stock.
•Market is at an important technical resistance level.
•Breaking news in the market.
•Unusual seller on the tape.
•Clear buying pattern dissipates.
•Time clock goes off in your trading brain.
•Too steep.
•Too much of a pullback.

Review your work after every close, be prepared every open, spend the day immersed in getting better every day.

🔥If you are not spending 30 hours a week on something to improve your craft, then winning at something is to satisfy your own ego.

>Your P&L as a trader is determined by the work you are willing to do after the close.

Traders often talk about their intuition. Well, you do not build intuition without screen time and purposeful practice.

It was his pre-open thought preparation. It was his after-the-close review of the stocks he chose. It was quietly thinking about his trading. Hours of journaling. It was talking to some other traders and getting their feedback. And now he has improved.

One of the great ways to improve as a trader is to think about your trading after the close.

🧠Our brains develop circuitry for our skills. Your brain, developing this wiring, makes no distinction between doing and just thinking about doing.

Doing a daily PlayBook trade is one way you build trading connectivity in your trading brain. You can do a PlayBook trade daily to just get it done. Or you can do a PlayBook trade with all your effort so you get the most out of each trading day.

What does it mean to compete as a trader?
• Review your trading/trades.
• Think trading.
• Watch film of your trading.
• Talk trading.
• Review the trades of your mentor.
• Talk with your mentor about trading.
• Watch film of trading in a group.
• Archive a setup that made the most sense to you in your PlayBook.
• Keep a trading psychology notebook.
• Ask questions about the day to a trading partner.

📈📈📈When a trader starts, I feel strongly that most should begin with the Second Day Play, and then the Trend Trend Trade(T3), and then the Bullish Flag Trade.
→These are the three easiest trades to start with as a new and developing trader. Become proficient and profitable in one trade, demonstrate that to your mentor, and then and only then should the new trader move to the next trade.

Find the product, trade strategies, and the timeframe that works best for you.

📈First master the Reversal Trade pattern if you want to add a Fade Trade to your quiver.

📈First learn the easy trades and then build from there.

📈The big money is in catching the real move.

>The trading truth is that most winning trades start to work for you quickly.

A good intraday trader ought to strive to pull money out of the markets four out of five days a week. If you are negative two days in a row, you ought to hold an emergency trading summit with yourself.

A typical pattern for the successful beginning trader:
•Lose money.
• Lose less money.
• Flat.
• Slightly positive for the month.
• Consistently positive.
• Find more opportunities in the setups with which you are consistently profitable.
• Expand your PlayBook with other trades.
• Add size to your best trades, which grows your P&L.

I generally do not see much from a trader in their first four months relating to results. What I see is them working hard every day. What I see is them doing a daily review, going through their work, doing a PlayBook trade every day to archive, finding out which plays they like the most and why.

>It’s not how much you made, but how you traded that matters most.

Rules to have:
•Have a time stop
•Be *ultra*-selective
•Cover risks
•Internalize “the second rat gets the cheese”

Things to remind yourself:
•If you get stopped out a lot in a stock, ask what’s the real stop? Is the bias wrong?
•Always know what time big/important economic numbers come out.
•If you see SPY touching too many prices, and you weren’t making money on both longs and shorts, you should slow down and see where the market now is in longer time frame.
•Consider how you could have traded the bounce better.
•To add to above, you should always have a time stop.
•Look for a level to hold during mid day.
•Find something that can trend for the rest of the day.

“It’s not good enough to sit at your desk on Monday, scrambling to figure out what to trade and do. Gentlemen, that’s not good enough! Over the weekend, you must be thinking: If we bounce, what would a bounce look like? Above what S&P futures price will you get long market stocks? And which ones? And at what prices? Above what SPY price? And you must not stop there guys. What kind of an open makes it more likely we will bounce? What if we open, tank, and this appears like a blow-off bottom? What is we open and hold above an important technical level in the market? And then gentlemen, you should be mapping out, the stocks you would trade, the prices you would trade them at for each possible market iteration. You should be prepared to trade each market iteration.”

📈A sign of strength for a stock is when it gets above resistance and then moves away from this price quickly.

📈When a stock fails at technical support, we assume it will continue to the next technical support area.

“What would cause you to do the enormous work necessary to be a top CEO, Wall Street trader, jazz pianist, courtroom lawyer, or anything else? The answers depend on your answers to two basic questions: What do you really want? And what do you really believe?”

If you cannot daydream about trading, how can you expect to be an elite trader?

So you think you have a passion for trading? What can you do to improve your chances to become a great trader? And what can young traders do to advance their chances of success that too few are doing?

You need to focus on learning the craft of trading and to not worry about making money. When your skills are in place, the money will take care of itself.

📈Always check the ATR before trading a stock. You will learn to use this as an indicator to tell how far a stock might move intraday.

📈Trading strategy for a bounce in a stock: Let the stock stop going down, let it hold higher. Then get long with a stop below the low. Do not sell until a significant up move.

📈If you are making a bounce play, you must buy more when the stock holds higher. If you cannot, then eliminate this trade from your PlayBook. The math will not work for you then.

Be more consistent.
Do a PlayBook Trade every day.
Do a very detailed trading review.
Make notes about your psychology challenges.
Put together a good ten days of trading data.

1. Do not copy the trades of others blindly. See if you can make them your own and if so, then make them your own.
2. For all trades, first determine your stop if the stock trades against you. No one trade should ever so much as even stop you out for one day, let alone do serious damage to your trading account.
3. Trading ideas are ideas. If the market trends against your idea or in this case our ideas, then take the other side of the trade.
4. Never blame anyone else for your losses. Never.
5. After each losing trade, determine what you learned. Thank the market for its learning opportunity.
6. Judge your trades on the process and not on your results.
7. Do not get lost in an endless opportunity to find conspiracies in the marketplace.
8. If you spot a pattern, no matter how it develops, exploit it. If someone was fading our AM idea, then fade it as well. That would be awesome if that were the case since all you would then have to do is do the opposite. Think Opposite George from Seinfeld.
9. If you cannot control your emotions while you trade, then work on that first, and leave your money in your bank account.
10. One Good Trade, and then One Good Trade, and then One Good Trade.

When something consolidates within a few cents for more than 15~20 minutes, that is a death trap; these plays do not work.

💭”Never discourage anyone who continually makes progress, no matter how slow.” — Plato

When you sift through charts, develop a consistent system that makes sense to you. Repeat that system. This is how you will build skill relating to viewing charts for a trading edge. It is most important for you to be consistent. It is most important for you to develop a system of chart viewing that makes sense for your trading brain. As opposed to thinking there is some Holy Grail chart-viewing approach to the markets. There isn’t. It’s the daily and consistent work of viewing your charts that creates your trading edge using charts as an indicator.

📈VWAP is best is an indicator when it is curving to the downside.

💭“Do what you love. First, it’s hard to figure out what you love. But do that first. I had a passion for learning about the world, which I applied to investing. After you find your passion, then execute. Do all the hard work to become good. Maybe your passion is gardening. If so, start gardening. Open up a gardening shop. Then all around Asia will be your gardening shops. Do what you love doing. Then you will never do a day of work. You will wake up excited for the next day. That is my advice.” — Jim Rogers

You must first be ready to succeed as a trader before you can expect to execute consistently in real-time in the market.

“I sat down and reviewed my paradigm of trading, and found it pretty ugly. A frightened lonely rookie soldier was thrown into a battle field with only a knife in hand. (This is also the image the mass media or lots of trading books paint for us, a dangerous, scary, bloody war zone.) After I realized that I decided to play with it. I changed the perception of market from a battlefield into an ocean. I changed my self-image from a rookie soldier to a fisherman. To the fisherman, the ocean is a place he respects but also a huge resource he can use. Certainly he knows the ocean is dangerous. So he prepares each trip carefully. But he loves the ocean. He knows what to do when the storm comes. He also knows what to do when the fish come. From then on, trading became an interesting, challenging, and fun game for me. I told the fisherman’s story to myself every morning for about two months till I truly believed I was a fisherman. This simple change removed 60 percent of my fear while watching the market.”

Most beginners do not live strictly disciplined lives, understand the physical effects of greed, or know how to overcome sudden fear.
Years of dedicated effort toward training your mind to embrace the psychological effects the market imposes is a necessity.

📈Make a habit of judging every technical level you view from one to ten. This will help build your charting skill.

📈When you do your PlayBook trades, you want to be complete with your information. Not covering the Intraday Fundamentals is an incomplete PlayBook trade. Perfect practice makes perfect.

Understand what is going to get you out and then work on that every day.
→But, first, you need to be very definitive about what gets you out.

📈If you are playing a sort of market breakout, you want to find something that is above its longer-term resistance matched with the fact that the intraday market is now breaking to the upside.

4 important lessons of trading:
1. You must have guts to be your best trader and not suffer from “Trader Wuss Syndrome.”
2. Find the trading style that works best for your personality.
3. Have some fun while you are at this game, please!
4. Embrace the unavoidable psychological journey to reach the goal of CPT.
As a trader, you must not only construct your PlayBook and execute on your favorite trading patterns but you must also develop the skill to be big, loaded, committed, all-in, add size, or however else you want to say establish a large position.

💭”We become more successful when we are happier and more positive.” — Shawn Achor

The best traders find and implement a strategy that best fit their personality.
→Start with a personality test to determine what type of trader they are.

💭”Traders who watch movies while in longer-term trading positions make better decisions. She argued that a trader’s subconscious keeps the trader focused on the real trade, which is to say that a good trade is not short-circuited by overvaluing the ticks.” — Denise Shull

📈An Opening Drive Play is a strategy in which a trader gets long a stock that gaps up, in In Play, and trades for a momentum move higher right off the open.

If a stock is really weak or really strong, I should wait for either turn on the 15 minute or an exhaustion blow-off bottom or top move to get out of my core.

11-step process to taking on more risk with your trading is as follows:
1. Build your PlayBook.
2. Choose your favorite setups, or A+ trades.
3. Risk 30 percent of your intraday loss limit on your A+ setups.
4. Hold for the real move.
5. Trade a bigger account.
6. Invest in your trading advancement with higher price and bigger spread stocks.
7. Enter stop-limit orders for your biggest positions.
8. Commit to visualization exercises to improve your performance.
9. Trade options for your bigger swing trades.
10. Develop your All-In Trade.
11. Expand your trading time frame.

Build your PlayBook
→You have to know what patterns are best for you.

Choose your favorite setups, or A+ trades.
→Select the best of the best from your PlayBook.

Risk 30 percent of your intraday loss limit on your A+ setups.
→Place at least 30% of your intraday stop loss with your A+ trades.
So if your intraday loss limit is $1,000, you *must* add size such that if you lose on the trade you risked $300 in P&L.

Hold for the real move.
→Risk 30% of your intraday stop loss and hold for the real move, until there is a Reason2Sell for your swing trades.

Trade a bigger account.
→So let’s say that now you can risk 30 percent of your intraday stop loss and hold for the real move. Next you want to get even bigger. At this point, most incorrectly focus on adding share size.
This is a mistake. A better idea is to increase the size of your trading account, increase your intraday loss limit, and continue risking 30 percent of your intraday loss limit.
In short, think of your biggest positions in percentage terms and not share size or P&L.

→If you can think of trading in percentages, you become scalable.

→If you do not have a methodology to determine your best trades and how you will place risk, then. you are not scalable.

→An extra 20% for each 10 days of positive trading data is an effective technique.

**Develop your All-In Trade.**
→The concept of A+ trades is first you build a trading PlayBook of setups that make the most sense to you.
Then you ferret out the best of those trades, which we call A+ trades.
We set risk rules for these A+ trades. For the intraday trader, if you see an A+ setup, you must risk 30 percent of your intraday loss. If you are a swing trader, you must risk 2 percent to 5 percent of your trading account.

→I propose you risk your entire day. Risk your entire intraday stop loss.

→You are all-in for this trading session.

→You may only see this trade three times a month. These are special trades. These are the best of the best A+ trades for only when you really see it. If you think you see it once a day, we need to work on what this trade really looks like for you.

→The trade should start to work for you immediately.
If the trade doesn’t work immediately then you MUST start piecing out of the position slowly.

1. Successful traders have meaningful attachments or some other source of motivation and happiness outside of the financial markets.
2. Successful traders are proactive; they know what they need to learn, and they know what they need to do to execute. Being active alone is not sufficient.
3. Successful traders tend to be process driven; they develop and refine routines that turn good trading behaviors into habits and execute these routines habitually.
4. Successful traders have a unique signature; they have an edge that they execute consistently and improve constantly.
5. Successful traders treat every trade as a learning opportunity, especially losing trades.
6. Successful traders identify their A+ setups, best products, and optimal time frames that are most intuitive for them and work to maximize their production in those idea.
7. Successful traders avoid thinking in dollar terms; they standardize in terms of percentages to measure performance as well as put on risk.
8. Successful traders have a sniper mentality; they are prepared to wait for as long as it takes and ready to pull the trigger when a valuable targets appear in their scope.
9. Successful traders have a comprehensive set of measurable and challenging yet realistic goals; they regularly evaluate their progress and always ask what they need to do to make further progress toward their goals.
10. Successful traders use all their resources to improve, particularly other traders.

5 steps to improved trader psychology
1. We identify the problem.
2. We allow the trader to develop a plan of correction. First, let the student struggle with a solution. He learns more.
3. We offer a plan of improvement (visualization exercises; and again see Bruce Bower’s series on the SMBU blog, Parts I, II, III).
4. The trader does the work, the daily exercises, to improve.
5. If none of this is enough, we call in the psychology coach (sometimes two).

Trading is all about experience and screen time. When you train your mind and eyes to watch the market in a certain way, you start to see patterns. Over time, I’ve learned that when I see certain premarket action, then more likely there will be an opening drive.

If there’s something in the after-hours where there’s a lot of volume done at a particular price and it can’t get above that price, we can actually use that level when the trading session opens up.
The same thing goes for if the stock can’t get below a price but does a lot of volume in the after-hours or in the pre-market. We can use this level to trade off of when the market opens.

📈”I love range plays where there is a huge battle that ends with a clear winner. Follow the winner and play for the stock to trend.”

📈Switch to Trades2Hold, intraday trend swing trades, after the open.

If trading is your passion, why not give yourself the best chance to succeed? Why not really learn how to trade? Why not learn the work you must do daily to improve? Why not learn how good you can be as a trader? Why not surround yourself with other pro-traders who can offer mentorship?

📈Something that is counter-intuitive for most traders is that you are never entering at the bottom of the pullback. You are always entering when the momentum is on your side.
→When you try and buy the bottom, you are often wrong and get stopped out. When you buy the bottom and you are correct, you will always sell too early because of the recent memory about how bad the stock just was.

Opening Drive
Find stocks that are moving with above-average volume.

📈You need a powerful opening drive with above-average volume for the timeframe important to you.

1 Recognize the direction of the higher time frame trend.
If you are looking at a 15-minute chart, you make sure that the opening drive is in direction of the trend of, say, your hourly chart.
If you are using an hourly chart, make sure it is in the direction of the daily chart.
Similarly, if you are in a daily chart, make sure that it is in the direction of the weekly chart.

2 It should be a lower-volume pullback with at least four candlestick bars in the pullback leg. This is the key. A low-volume pullback must occur. Once you have a powerful opening drive with heavy volume and a lower-volume pullback, then you have a high-probability trade setup.

3 The bar has to close outside of the trend line to enter the trade. Make the trade when the stock is in the direction of the trend.

In general, this is what it really looks like. You have an opening drive. You have your pullback. And if the momentum returns in the direction of the trend, you are going to enter where I have circled Entry Area in orange. You are going to have the stop loss just below the swing low, which I indicate with the red line and “Stop right below swing low.” The first target is near the previous swing high. The second target is the break of the trend line. Now if you look at it from the downside, you have an opening drive to the downside. Then you have the retracement. When the momentum gets back to the downside, you enter to get short. Place a stop just above the swing high. Your first target is the previous swing low, and the second target is the break of the trend line.

📈The second entry and what it looks like. Meaning you make this trade and get stopped out.

Take the loss on the first entry. The stock resumes the downtrend, and we re-enter the position for a second try. Your stop is at the previous swing high. You have your first target, and your second target is the violation of the trend line.

The second try tends to be a higher probability trade.

The second try offers a better opportunity, a higher probability risk/reward.

For every five losses, there is a one winner. I really can make good money in the 20% of this trade that works.

📈Keep Fibonacci levels in mind.

Once I enter a position, I know where my stop is. Once I put the trade on, I don’t touch my entry and exit target ever. Once I am in, I am committed to the trade. Once it reaches my first target, I trail my stops using the bigger trend line.

It is better to make a trade more standard, particularly when first learning a setup.
How you make the most profit is you let it break your trend line.

The first target I don’t ever mess with it.
The biggest part about this trade is you have the highest probability from your entry to the first target, and what happens after that really depends.
But I don’t touch my position once I have entered the trade and until it touches my first target.

I don’t ever take a third attempt at this trade.

I risk more money on the second try because we have a better probability and a better risk/reward.

So, on the first test, I am only willing to risk 10 percent of my intraday loss, and on my second, I will risk 25 percent.

I work based on tiers. So for every tier, I am going to risk 5% of my daily stop. Tier 1, I am risking 5% of my daily stop; 10% for Tier 2; 15% for Tier 3; and 20% on Tier 4.

You use the previous levels established on the trade to start a feeler position, start your position early without gaining confirmation. Once you get the confirmation with the break of the trend line, you can add to the position.

Adding on tight consolidations near previous swing highs/lows

I like to trade on an hourly chart.

📈The positions that get to the first target quickly are usually the ones that have a good follow-through. And this is ideal for short-term swing trades.
With this trade, you can put them on and check at the end of the day or check on them every two or three days. This is the ideal setup. Entries can be better timed with a 15 minute chart.

Next is the 15 minute chart. I am watching some trades that are moving intraday. And these are mostly 2~4 hour setups.

It is very ideal for intraday swing trading. Your entry here is better with a 5 minute or 1 minute chart.

You always have at least four candles on the pullback.

The rule with trend lines is you redraw the trend line at the swing high through the high of the move where it makes a swing low.

If you are trading a 60 minute chart, you are better off waiting for the second try.
If you are trading the 15 minute, it is more like a coin flip.
I think for the 60 minute chart, the probability is more like 70/30 that you get a second try.
For the shorter time frames, you have to take the first entry.

I have been using this trade for a couple of years. But I wasn’t making good money with the trade. Only after spending time looking at my numbers carefully for a month, I realized that the key was the second entry.

You have to identify the time that works for you.
If you can’t do anything overnight, then the 60 minute chart is not good for you. The 15 minute is the best for you.

In our markets when a stock clears long-term resistance, we get long and probably make a Trend Trend Trade. A Trend Trend Trade means a stock in a trend on the long term and intraday charts. We follow this trend. We hold this position with the direction of the trend until there is a Reason2Sell. This is one of our most powerful trade setups, an A+ opportunity.

🧠See your trades as patterns.
→Trade the setup and then accept the result.
→Trading is not about being right. It is about controlling the risk.
→And finding patterns where your risk/reward for you is exceptional.

Fading a stock holding above long-term resistance is bad fundamental trading.

Second Day Play
This is a very powerful intraday trade. We use the most important prices from Day One. You have to start thinking about getting long right now. If it holds above there on heavy volume, what will you do? If it gaps above, what will you do? If it comes back to this price on light volume, what will you do? How you do tomorrow depends on the work you do tonight, the mental preparation you do to crush that opportunity tomorrow.

💭”Do not spoil what you have by desiring what you have not; remember that what you now have was once among the things you only hoped for.” — Epicurus

「Do two playbook trades a day.
Before each open review all of the trades you have added to your PlayBook.
And review the PlayBook trades of the others shared on the desk.
Do this for three months.
This will get you some serious reps looking at patterns that makes sense to you and others.」

>A Trend Trend Trade is one of the first trades you should learn in any timeframe.

A Trend-Trend Trade is a trade in which the stock is trending intra-day as well as long term. When these two technical trends are in alignment, the trade made in the direction of these trends becomes one with a high probability for success.
Trend-Trend Trades work well when a stock releases major news that confirms the direction of the trend.
Levels that are shared on the intra-day and long-term charts are very powerful to trade off of. Big moves may be made here, so set alerts at these levels.

Keep investing in your trading future. Let there never be an end to your trading education.

I am not impressed by natural talent, as trading is a skill developed through concentrated practice.

The PlayBook can be applied to all markets. No matter how tempted you might be to think otherwise, markets are markets. There’s a universal trading psychology that applies to all of them.

There is a solution to all of your flaws and focusing on your strengths is always the best way forward.
Or perhaps you need to take a time out and work on yourself first before you can succeed.
Or perhaps you just need a refresher in your trading fundamentals so start building a PlayBook of your best setups.
Remember that you will have to keep working to improve and adapt your trading methodology. For all the above, build a PlayBook that makes the most sense to you; after all, this is your business.

The future is to learn how to trade.
Take two years (where are you going?) and really learn how to trade.
Develop your PlayBook. Get big in your A+ setups.
Then slowly work on adding plays to your PlayBook with small size, while you are sure not to miss your A+ setups.
Then dabble, expressing your best trading setups with others products.
Then test your strategies in other markets (coming soon).
Next build auto strategies to add another revenue line to your trader P&L.
Develop a goal of never missing any one of your A+ setups by building these auto strategies.
Become a multi-product, multi-market, bionic discretionary quant trader.
The perfect path is to start young and build skill before you ever turn pro. This is the future path to becoming YBT.

Trading is about building from your strengths, doing more of what you do best.
Well, how do you know what you do best?
You start building a PlayBook of the setups that make the most sense to you. You do not do this just by replaying your trading day in your head or just banter with your trading mates and call it a day. You sit down and document in substantial detail the trades that made the most sense to you each trading session.
You start to compile *your PlayBook*.
If you haven’t started doing this reading this book, start now.
From your PlayBook, ferret out the A+ setups. Take these setups, place them in a binder, laminate them, and review them before each open. This is your business.

Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma, which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become.

Trading is a journey that will require many years to become competent.

Structure your trades with The PlayBook:
The Big Picture
Intraday Fundamentals
Technical Analysis
Reading the Tape
Intuition
Trade Strategy
Trade Management
Trade Review

How you think through trades is most important.

Trading is a game.