For the February 7th installment of our Webinar series, The PlayBook with Mike Bellafiore, Mike discussed Reasons2Sell: Getting The Most Out of Your Trades. If you missed this presentation go to www.smbtraining.com/blog

1. Reason2Sell
Getting The Most Out Of Your Trades
Mike Bellafiore

3. Pre-order at Amazon

4. Regret
• I sold too early

5. Move2Move or Trade2Hold?
• Determine what the trade is
• Then judge whether you sold too early

6. Develop Exit Rules
• You determine your exit rules
• From Your PlayBook
• If you don’t then don’t complain

7. No Regret
• If you follow your rules then the move after
is of no matter
• If the stock trades higher, so what?
• Your job is to do the right thing!
• It’s not to take every penny from a move

8. One Good Exit Strategy

9. Most Common Reasons2Sell
Hits your price target
Intraday uptrend broken
Breaking news in the stock
Market is at important technical resistance
Breakings news in the market
Unusual seller on the tape

10. Most Common Reasons2Sell
 Clear buying pattern dissipates
 Time clock goes off in your trading brain
 Too steep
 Too much of a Pullback
 Trading day ends 
8/13/12

11. 1. Hits Your Target
Have a target or set of targets before you
enter a trade
Follow your plan and hit out when your
target(s) are reached

12. Consolidation at the
43.00 level provides
short entry with a
41.50 price target
Prices reaches 41.50 target,
then pulls back into the Close

13. 2. Intraday Uptrend Broken
Zoom out to the 5 minute or 15 minute
chart after 10AM
Ifa series of higher lows is broken, hit
out

14. ...after sharp down
move, it fails to make a
new low, providing a
clear signal that the
downtrend has ended
GNC begins clear
downtrend off the Open,
and short opportunity is
provided when a 38.45
buyer drops...

15. 3. Breaking News In The Stock
Ifunexpected news suddenly comes out, hit
out and re-evaluate
Itcould mean a huge fundamental change in
the company

16. ...however, after breaking
down through range, JCP
A held offer appears at CEO announces better than
22.00 in JCP, providing a expected store sales for May,
short entry opportunity... leading to a quick reversal

17. 4. Market Is At Resistance
Most stocks follow the overall market
Ifthe stock and the market are both nearing
big resistance, higher probability of a reversal

18. SPY reaches technical
resistance area that it
has failed to hold above
for the past several
days...

19. Simultaneously, BAC
reaches 7.70 resistance
area…
…but sells off
when the
market fails at
resistance

20. 5. Breaking News In The Market
If
a big event occurs and causes the market to
move erratically, hit out and re-evaluate
Can be an economic number, Supreme Court
decision, terrorist attack, etc.

21. ...at 14:00, FOMC
announcement is
released, and the
statement is bearish
for stocks, leading to
an immediate selloff
into into the Close
On 8/1, CAT begins to form uptrend after
11:00, providing an opportunity to get
long...

22. 6. Unusual Seller
Ifthe stock tries to get above a price several
times and fails, hit out
Ifyou notice a lot of selling at a level and the
seller steps lower, hit out

23. ...unusual seller appears at
69.50, a signal that longs
should exit their position and
re-evaluate
FOSL begins clear uptrend in the
morning, with several opportunities
to get long...

24. 7. Buying Pattern Dissipates
Ifa stock is showing a distinct buying pattern,
but it disappears, hit out
This can be a set of consistent pullbacks, a set
of consolidation flags, etc.

25. ...once the buyer
disappeared above
50.25, the buying
pattern was clearly
gone, and the stock
After ranging off the Open, a
pulled back to the
massive buyer appeared on the
original price
tape at 49.54, driving the price
of the stock up over .70c very
quickly...

26. 8. Time Clock
Ifafter a specified amount of time the stock
hasn’t done what you expected, hit out
Wait for the stock to give you more
information before getting back in

27. Seller appeared above
21.00, offering excellent
short opportunity…
FMCN was strong
off the open due to
strong earnings
news from other
Chinese stocks… …however, was not able
to move away from the
price and stayed there
for several hours – a
signal to exit the position
and re-evaluate

28. 9. Too Steep
If a stock goes down or up too far and too
fast, it will likely bounce right back
Take some off into the move and look for a
place to re-enter

29. ...however, a move of over 1
point in 30 minutes is quite
steep for this stock, a signal
that a pullback is likely to
follow...
CVS drove higher off the
Open the day after being
sold off on earnings...

30. Too much of a Pullback
8/13/12

31. The Principles of Elite Performance
• Add nuance to your rules
• You are not good at exits YET
• Practice, rehearse, think, talk about them
• Training, coaching, and mentoring
• Purposeful practice!

32. Contact
• mbellafiore@smbcap.com
• @mikebellafiore