One Good TradeThe 7 Fundamentals

Mike BellafioreAuthor of One Good TradeCo-Founder of SMB Capital

Co-Founder of SMBU

The 7 FundamentalsProper PreparationHard WorkPatienceA Detailed Trading PlanDisciplineCommunicationReplaying Your Important Trades

1. Proper Preparation

“Failing to prepare is preparing to fail.”

John Wooden

A Trader’s Day- The Open

Midday and the Close

After the Close

The Power of Professional Trading ToolsPreparation toolsScanning FiltersIdea generation

SMB Scanner

SMB AM Meeting

SMB Real-time

SMB Radar

2. Hard WorkWatching the Level II and Times &

SalesWatching price action at your levelsImportant intraday Prices?

3. PatienceIf your entry price is 30 then where

do you enter?An upside of 5 and a downside of 1Chasing is for dogsAffects your exit if you enter at a bad

priceHard to get big from a bad priceWin rate declines

4. A Detailed Trading Plan

For if the stock trades in your favorFor if the stock trades against you

My Favorite Teaching ExerciseTap a trader on the shoulderWhy are you in this trade?Where will you exit?I expect an immediate answerIf not then kicked off the trading

deskCome back when you plan on

being a pro

5. DisciplineWhat do you do if your stock trades

against you?What do you do if your stock hits your exit

price?What do you do if your stock hits your

criteria for exiting?

GET OUT!!!!!!!

SNDK – 11/21/2005Intel Teams With Micron For

NAND Flash ProductionSanDisk in this spaceSNDK down 16%

SNDK

SNDK

Who is not a Trader- The Blow ups

Jon Corzine MF Global John Meriwether Long-Term

CapitalThe London Whale 5B in lossesBuzz Weinstein other side of the-

now famous London Whale trade.

6. CommunicationSharing information with communityStockTwitsChat roomsInternet trading communitiesCreate your own trading communityI have traded solo…………………….

7. Replaying Your Important TradesSMB Playbook Trades that make the most sense to

youBuild from your strengthsGet bigger in the plays that make the

most sense to youFind more of themTrade them with more sizeThis is how you become great

The PlayBook

The PlayBookTitleStrategy DescriptionBig PictureIntraday FundamentalsLong-term Technical AnalysisShort-term Technical AnalysisReading The TapeTrade ManagementTrade ReviewTrade Idea

What Is Your Job As A Trader?

One Losing TradeIf you make a losing trade is that

One Bad Trade?

A Professional TraderA professional trader takes losses

all the timeControl their riskDo the right thingIf I make this trade 1000xs will it

work?@sspencer_smb, “A professional

trader takes many small losses.”

7 FundamentalsIf you have followed all 7Whether you make $ or notThen that is One Good TradeThat is your job!Sustaining, consistently

profitable trader

SMB MantraMake One Good Trade and then

One Good Trade and then One Good Trade

Coach K at Duke

Questions?

Feel Free To Contact Me

www.facebook.com/smbcap@MikeBellafiore

mbellafiore@smbcap.comwww.smbtraining.com/blog