3/16/2025 - In this series of posts, I will address questions that traders posed during my recent group coaching session with Agnieszka Wood and Alex Serzhanovitch.  If you have trading questions you would like me to address, please feel free to reach out to me via Twitter/X. The first question is:  "Given that markets constantly change, how can traders develop the psychological flexibility needed to adapt their strategies without falling into emotional overreaction or hesitation?"  Brett's response:  This is a great example of a situation where improvements in ..read more

  3/11/2025 - Before I respond to the questions of those who attended my recent webinar, I would like to share the fruits of a discussion I had with an experienced and insightful trader.  The basic idea is that we experience emotional disruptions in our trading, not because we lack discipline or are overcome with greed or frustration, but because we are trying to trade in a way that doesn't leverage who we actually are.  When we don't play to our strengths, trading can be frustrating and unfulfilling.  The best path to wealth in trading is to draw upon the wealth of talents ..read more

  3/4/2025 - One thing I've learned from working with portfolio management teams for many years is that they think thematically.  They don't just look at individual charts and decide upon entries and exits.  Rather, they scour a variety of markets and see how they are moving relative to one another.  In the patterns of strength and weakness, themes emerge that are very relevant to economic growth, stability, and weakness.  The first way of identifying themes is in the relative movement of various stock market sectors.  For example, take a look at the consumer disc ..read more

  When we study our successful trades--and especially the processes that are part of our most successful trading--we gain insight into what we do well in markets.  No amount of work on our emotions can ground us in our strengths.  If we are not explicitly focused on our best practices, we cannot possibly trade at our best. In this post and subsequent follow-ups, I'll share a few of my best trading practices.  Together, these form a template that not only guide my trading, but also anchor my efforts to be my best self. The first best practice is to be extremely explicit with ..read more

  Every one of our cats has had a story to tell.  I've written about Molly Ruth and making a fresh start in life.  We've also encountered Mia Bella and the importance of finding opportunity amidst adversity.  Naomi taught us about overcoming trauma, and now it's Shay's turn.  Shay (above) is one of our four rescue cats and the latest addition to the family.  He was in an animal shelter in southern New Jersey, after losing his home when the homeowner passed away.  He was treated well in the shelter, but was stuck in a small cage most of the day.  For a la ..read more

  *  Margie and I celebrated our 41st anniversary this weekend.  We met at a singles event in Ithaca, NY, during which I had way too much to drink.  When I got home, I wanted to sleep in and was concerned that the morning light would wake me up, so the idea came to me to sleep in my walk-in closet.  I woke up hung over, stumbling out of my closet.  I knew that Margie was special, and I knew that I would have to grow the f*ck up to be in a great relationship with her, especially given that she had three children by her prior marriage.  What I couldn't do for m ..read more

  Over the years, I've been struck by how many top performing discretionary traders don't have win percentages of much over 50%.  Most of their trades are relatively small winners and relatively small losers.  They are *very* good at risk management and so they have very few large losers.  But they are also good at recognizing their best opportunities--what we might call their A+ trades--and making the most of these.  In his book One Good Trade, Mike Bellafiore of SMB Capital stresses that, "Consistently profitable traders obsess about making One Good Trade and not mon ..read more

  In warfare, you assess the enemy's strengths and weaknesses and you develop a strategy for exploiting the vulnerabilities and avoiding the strengths.  That strategy is implemented with a variety of tactics, from ground assault to air and sea attacks; from spycraft to guerilla warfare to coordinated amphibious actions.  Similarly, a football team will assess their own strengths and weaknesses and the strengths and weaknesses of the opponent and will develop a game plan--a strategy for victory.  That strategy will be carried out tactically through specific plays and defense ..read more

  Suppose you could only trade once per day, but at any time of the day? With only one bullet to fire, you would have to make sure the opportunity was outstanding.   What information would you gather to identify the one good daily trade?  Knowing this constraint, you'd have to study, study, study the best trades that could have been placed each day and generate a creative plan for exploiting the single best opportunity.  How would you size the daily trade?  What would you need to see to add to your position?  What would you need to see to take profits?  ..read more

  By transforming our trading, we can transform our trading psychology. So much effort goes into trying to predict what markets will do next.  Confidence, however, comes from understanding.  When we understand what is going on in markets, the right trades come to us. In a recent video for SMB Capital, I explained how the perspectives of active investors--such as those managing capital at hedge funds--can benefit short-term traders.  This is because portfolio managers don't just look for trades:  they identify themes that connect a variety of markets.  A good examp ..read more