Written By: DragonFly Capital
Each week I post the performance of the stocks that were given to subscribers the previous Sunday. All performance is measured against the plan given […]
One scalper on our desk proudly wrote to Dr. Steenbarger and me about his progress recently:
Had 3 personal best this week:
1) Best day: 167K net
2) Best month: 601K net
3) Best year: 1.5M net
$ 601,000 in net profits is a sensational trading month!
A scalper is a trader who makes very short-term trades. He is active. He focuses mostly on price action and reading the tape. His skill is in placing bets on where the stock is to trade next. And not where the stock or trading vehicle will be on a longer time frame.
This trader had developed goals with Dr. Steenbarger at the start of the year and hit them. Mostly he has worked on trading his edge bigger. That edge is scalping. Where before he might have scalped 5-10k shares in a trade, he is now up to 50k shares in some names.
The firm does not upcharge for trading commissions. We are a PnL firm. So in the case of this trader, he executes at a base rate of 70 cents per thousand shares. There are many prop firms who do mark up commissions, some to as much as $ 7 per thousand and some even more. This trader is able to recognize enormous net profits because of the firm’s commission structure.
What can we learn from this trader?
You can make real money scalping. I am puzzled at times with statements made in and at the trading community that you cannot. I have read things like: Scalpers earn “crumbs”, while swing traders make real money. You can make real money as a swing trader. Here is a recent post about a firm trader we would describe as more of a swing trader: Why this trader is “crushing it”. Also, and this trader above shows, you can make real money as a scalper.
Play to your strengths. When this trader takes his check to the bank for deposit, they will accept it. They are not going to sit him down and ask him how he made his money. They are not going to refuse the check because his profits were not from fundamentals analysis, trend trading, global macro plays, or swing trading. They are going to accept these “crumbs” at their bank, gladly. He is a great scalper. A winning day trader. So he continues to scalp with larger and larger size.
Embrace Team trading. This trader has also embraced Team Trading. Building a Team where junior traders help him express his edge in markets. Junior traders, who have built technology for this trader, so he can make more of and on his best trades. And with Junior traders who get to learn from a great trader to improve their chances of becoming a successful trader.
Work intensively and purposely on your trading game. Year 2 of his trading career, this trader was consistently a 4-8k a month trader. His results were very consistent as a scalper. Today he remains just as consistent as a trader. But he has worked intensively and purposely to increase his size consistently, with his trading edge. He shows the trading community that if you get to a point in your trading where you can consistently bank 4k a month in trading profits, you can grow a career from there.
Be one of the good guys in the trading community. We are often inspired to work harder for our trader because of his gratitude:
Keep raising the bar for the goals you wish to achieve. We will meet with this trader and his Team this month to discuss goals for 2018. Both for his trading personally and his Team. With opportunity, they will expect to do even better, trade even bigger, and hit their new goals.
For those who have an edge in markets, but feel they should be making more or feel they are never going to make enough, perhaps this trader will inspire you to continue forward and achieve your goals.
As always, your comments/feedback are welcome.
*no relevant positions
It is important to study the traders who are succeeding and learn from them.
In his Daily Report Card, that this top trader shares with Dr. Steenbarger and myself, you can see he is “crushing it”:
entry quality 9/10
Great finish to a great month – think I netted around 775k for the month. Pretty staggering considering my best month was 350k just last month. I did a great job of using my momentum and my profits to scale up as the opportunity was there and I had great focus and consistency throughout.
What is even better perhaps, is this month really pushed me past some bigger goals I had – making a million dollars of income on a year from trading, being the top guy at the firm (not sure but I think I am there). These goals didn’t seem attainable even after last month but sticking to the process got me there in the end.
Yes these results are staggering.
What we can learn most from this trader is: “sticking to the process got me there in the end”. This trader was working on sizing intensively, middle of the year. He was not breaking out to new highs in PnL. We could see his improvement, but the PnL was not skyrocketing relative to his improvement.
He kept working on sizing. Specifically being patient AND aggressive. This is a tough thing to do as a trader. You want to trade bigger and it’s hard to wait. Getting in early causes sloppy trades that can find your stops.
He was close. We could see it was coming. But he needed to stick to the process.
And then heightened opportunity visited. He was ready. His trading muscles had been developed during those months were he was improving, but the PnL was not cooperating.
It all came together in October with a personal best.
And then last month, with even more opportunity, he made a new personal best for the month as you can see above.
Bitcoin, other cryptocurriences, and blockchain are offering multiples of opportunity in the market. Opportunity met preparation for this trader.
One developing trader on our desk has found inspiration from watching traders like him “crush” the markets. That trader wrote:
Was really cool watching some of the guys have monster days today. Really was quite inspiring and motivational. It gives hope that someday that will be me. The more important aspect of today was the lessons I learned from these traders and the takeaways from why they were so successful today. I need to study what they did to understand why they had such fantastic days.
Perhaps this trader will inspire you as well.
Just four years ago he was a 10k a month trader. Last year he was a 7-figure trader. This year he is even better. In four years? Who knows? Expect that he will be much better.
I end The PlayBook with, “You can be better tomorrow than you are today.” This trader above is Exhibit A.
As always your feedback/questions are welcome- email@example.com.
*no relevant positions
Charlie Rose has been suspended by CBS News after becoming the latest media figure to be accused of sexual harassment when eight women came forward to describe unwanted advances, including lewd phone calls, parading naked, and groping their breasts, buttocks or genital areas.
Rose, 75, whose eponymous show airs on PBS, also serves as a host on CBS This Morning and as a correspondent for 60 Minutes.
“I have learned a great deal as a result of these events, and I hope others will too. All of us, including me, are coming to a newer and deeper recognition of the pain caused by conduct in the past, and have come to a profound new respect for women and their lives.”
In short, it didn’t occur to him that it might be painful for others to witness the naked parade of his nearly 75-year-old body! Maybe his next stop will be Burning Man?
[Thanks to Jonathan Graehl for brightening my day with this one.]
A reader asked:
I have been involved in trading for a number of years and follow your youtube channel with interest.
A quick query when you have some time.
Going back a few years, the main ‘focus’ for trading (mainly using the tape) was on the open and the first hour of trading. Then also the last hour before the close.
I’m just wondering if this is still the case in today’s markets. The open is still obviously important, but with regards to the last hour before the close, is this still a viable time to trade in your view?
I seem to be getting more of a ‘lunch time’ vibe in the final hour, where it seems that the main move has happened early on and now we are in sideways chop with not much in the way of ‘tape signals’ to guide you if you want to trade in the last hour before the close.
Would be interested in your view on this when you have some time.
I would agree with your observation for tape readers/scalpers. On the open offers the best opportunity to scalp as there is more volatility. I do notice our best scalpers profiting midday, trading the stocks most In Play. I do notice less of this type of trading into close, but still opportunity for the best tape readers. Overall, there does appear to me to be less opportunity to tape read and scalp into the close than in the past.
There are different strategies that work well into the close that traders gravitate towards. There are positions to be managed for swing traders. There is stock movement to be watched for setups for the next trading session.
You make an important observation for your trading. You do an excellent job seeing the different business plans you might build for the different trading time frames- open, midday, close.
As always, I welcome your questions/feedback- firstname.lastname@example.org.
*no relevant positions
I’m so excited about this opportunity to share with you the lessons – good and bad – from my 18 years as a swing and intraday trader.
Our featured webinar with Mike at Futures.IO will take place this Thursday right after market close:
It’ll be both an introspective look at my trading journey – most likely paralleling your journey along the way – and will include specific lessons I’ve learned that I wish I knew earlier.
My goal is to assist you at whatever point you are currently in your trading journey by sharing what’s worked, what hasn’t worked, what’s important, and what’s not from my 18 years in the markets.
Go ahead and register now and grab a notepad!
Thank you to Mike and his team for this introspective educational opportunity and we can’t wait to see you there with us live!
This past week, we experienced yet another horrendous terrorist attack in New York City. And, amazingly, just like what occurred after several other terrorist attacks that have been experienced over the last year, the market rallied right after the attack. It has almost gotten to the point that people now expect the stock market to […]
Slope of Hope