Thursday, April 29, 2010

One Good Trade: One Good Trading Book by Mike Bellafiore of SMB Trading

Kudos to Mike Bellafiore, one of the principals at SMB Trading, for his forthcoming book One Good Trade. I recall when Mike first talked with me about writing about a book covering the proprietary ("prop") trading world. I thought it was a fantastic idea. Prop trading firms have traditionally been quite secretive about what they do and how they do it. Mike has lifted that lid, offering a variety of lessons that new and experienced traders can benefit from.

One Good Trade is filled with anecdotes of real traders facing real challenges in learning and mastering markets. Mike covers the fundamentals of trading success, from discipline and hard work to keeping daily work plans and mastering basic trading plays. He also explains how traders are hired at prop firms and the mistakes that lead many of those traders to fail.

Intraday traders will benefit from the hands-on trading material that describes selecting stocks "in play" and reading the tape to gauge when supply and demand come out of balance. The latter portion of the book covers what traders need to do to sustain their development, including training innovations that SMB has pioneered.

The book is written in an engaging way and, hands down, is the best inside look at intraday prop trading that I have encountered. I've had the pleasure of working with Mike and partners Steve Spencer and Gilbert Mendez and can attest to their commitment to training traders. Some of the work they are doing in video-based training is, in my opinion, state of the art. But best of all, One Good Trade offers uncommon trading wisdom. From Mike:

"There is nothing to 'get' as a trader. What works one month may not the next. Trading set ups you crush one year may be extinct the next. As prop traders our job is to recognize present patterns and exploit them. But we also must have the humility to accept that these patterns might change at any moment. And when they do we must find new patterns. We must adapt."

One Good Trade is one good resource for adapting to markets.

Note of disclosure: No one at Wiley or SMB requested this review or knew what I was going to write in advance. I do not accept reimbursement for the reviews I write. According to the Wiley website, One Good Trade is scheduled for release in August, 2010.