SMB Chart Summitt 2017

Visit smbu.com/dailyvideo, email info@smbcap.com or call 646.560.5953 for more information
5 Lessons from the Prop Desk
Mike Bellafiore, Co-Founder
SMB Capital and SMB Training
Author, One Good Trade and The PlayBook

SMB TRAINING is NOT a Broker Dealer. SMB Training engages in trader education and training. SMB TRAINING offers a
number of products and services, both electronically (over the internet through smbtraining.com) and in person.
SMB TRAINING also offers web-based, interactive training courses on demand.
The seminars given by SMB TRAINING are for educational purposes only. This information neither is, nor should be
construed, as an offer, or a solicitation of an offer, to buy or sell securities. You shall be fully responsible for any
investment decision you make, and such decisions will be based solely on your evaluation of your financial
circumstances, investment objectives, risk tolerance, and liquidity needs.
This material is being provided to you for educational purposes only. No information presented constitutes a
recommendation by SMB TRAINING or its affiliates to buy, sell or hold any security, financial product or instrument
discussed therein or to engage in any specific investment strategy. The content neither is, nor should be construed
as, an offer, or a solicitation of an offer, to buy, sell, or hold any securities. You are fully responsible for any
investment decisions you make. Such decisions should be based solely on your evaluation of your financial
circumstances. Such decisions should be based solely on your evaluation of your financial circumstances, investment
objectives, risk tolerance and liquidity needs.
SMB Training and SMB Capital Management, LLC are separate but affiliated companies.
No relevant positions
Please note: Hypothetical computer simulated performance results are believed to be accurately presented. However, they
are not guaranteed as to accuracy or completeness and are subject to change without any notice. Hypothetical or
simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated
results do not represent actual trading. Since, also, the trades have not actually been executed; the results may have
been under or over compensated for the impact, if any, of certain market factors such as liquidity, slippage and
commissions. Simulated trading programs in general are also subject to the fact that they are designed with the
benefit of hindsight. No representation is being made that any portfolio will, or is likely to achieve profits or losses
similar to those shown. All investments and trades carry risks.”

Benefits to you
• Introduce some SMB traders trained from new to High
Performing Traders and why they have succeeded
• Share some of the strategies they use to succeed
• Share my favorite setup
• Learn my new favorite trade to teach
• Answer any of your trading questions
• Offer a perspective from a unique seat in the trading
community
• Introduce our free daily video as a new trading resource
for you
• Reveal: The $million trader trading formula

Mattel Changing Fundamentals-
My favorite trade
Denis
MAT
Date of Trade (Jan 26, 2017)

Lesson 1: Trade Strategy
a) stock gapping down
b) stock with a negative news catalyst
c) fight on the tape where the seller wins
d) holding below VWAP
e) no longer term technical support in sight
f) staircase stepping down visually on our charts
g) hold short for a real move

Big Picture

Intraday Fundamentals
• Reported earnings per share of $0.92, compared to reported earnings per
share of $1.08 in the prior year; and adjusted earnings per share of $1.06,
compared to adjusted earnings per share of $1.27 in the prior year.
• "And while our sales at retail remained strong, the slowdown triggered
elevated retail promotional activity and decreased shipping, all of which
had a significant impact on our gross margin.“
• Gross margins from 50.2% to 47%
• Red flag
•ATR- 1.12
•Avg Vol- 4.47mill
•Rvol- 8
•Short Float 12.6%

Long Term Technical Analysis

Blog post about this in real-time-
(smbu.com/blog)

Intraday Technical Analysis

Trade Management

Lesson #2:
My new favorite trading setup to teach
• Our risk/reward is remarkable (1×10 and better)
• You know exactly where you are wrong in the setup so your exit
is clearly defined
• This trade does not require many trade decisions mid-trade
• You see this setup daily
• It an easy trade for students to understand
• This trade has spurred floundering new and developing traders to
become 7-figure traders

CSX- 3RD DAY PLAY
Bryan B
CSX
1/24/17

Big Picture
• SPY WAS INCREDIBLY STRONG TRADING ABOVE
227 AND UP TO 228.08 BEFORE PULLING BACK A
LITTLE ON THE CLOSE.
• CSX CONTINUES TO BE SUPER STRONG

.
CSX Corporation, together with its subsidiaries, is a transportation company. The Company provides rail-
based transportation services, including rail service and the transport of intermodal containers and trailers.
The Company serves three lines of business, such as merchandise business, coal business and
intermodal business. The Company's merchandise business consists of shipments in diverse markets,
such as agricultural products, phosphates and fertilizers, food and consumer, chemicals, automotive,
metals, forest products, minerals, and waste and equipment. The Company's coal business transports
domestic coal, coke and iron ore to electricity-generating power plants, steel manufacturers and industrial
plants, as well as exports coal to deep-water port facilities. The Company's intermodal business combines
the rail transportation with the short-haul flexibility of trucks and offers long-haul trucking.
• ATR- 1.948
• Avg Daily Vol. 15M
• RVol- ~ 1.1
• Short Float- 1.5%
• Float 934M

Technical Analysis - 1 year

Technical Analysis - 3 Months

Exit
• Break of the trend line
• Vertical
• Trades to target price
• Something clearly different on the tape
• Breaking news that changes trade
• Reason2Sell needed before exit

ATI- EARNINGS
BREAKOUT LONG
AGAINST A LEVEL
Bryan B
ATI
1/24/17

Big Picture
• SPY WAS INCREDIBLY STRONG TRADING ABOVE
227 AND UP TO 228.08 BEFORE PULLING BACK A
LITTLE ON THE CLOSE.
• ATI WAS STRONG LIKE BULL

.
Allegheny Technologies Incorporated (ATI) is a specialty materials and components producer. The
Company operates through two business segments: High Performance Materials & Components and Flat
Rolled Products. ATI's products include titanium and titanium alloys, nickel-based alloys and specialty
steels, precision forgings, castings and machined components, zirconium and related alloys, precision and
engineered stainless steel strip, and grain-oriented electrical steel. Its standard products include specialty
stainless sheet and stainless steel plate. It is engaged in the production of titanium alloys, nickel-based
and cobalt-based alloys and superalloys, and vacuum-melted specialty alloys used in the manufacture of
components for both commercial and military jet engines, as well as replacement parts for those engines.
It also produces titanium alloys, vacuum-melted specialty alloys and stainless alloys for use in commercial
and military airframes, airframe components and missiles.
• ATR- .661
• Avg Daily Vol. 1.9M
• RVol- ~ 11
• Short Float- 24%
• Float 102M

Game Plan
• GAME PLAN WAS TO LOOK FOR A PLACE TO GET
LONG ATI
• I IDENTIFIED 20.20 AS A LEVEL THAT THE STOCK
COULDN’T TRADE BELOW AND PLANNED ON
GETTING LONG AT 20.30 OR AS CLOSE TO 20.20
AS POSSIBLE.

Technical Analysis -1 year

Technical Analysis 1 Month

Technical Analysis - 5 MIN CHART

Exit
• Need a Reason2Sell
• Wrote extensively about this in The PlayBook
• Break of trendline
• Breaking news that changes trade
• Vertical to upside where now too much risk to be long from this price
• Tape clearly changes
• Time

This is SWang

Scalpers can make real $$

Lesson #3: Trade your niche
• Tier 1 firm fires SMB
• Align your talents with a trading edge
• It’s not just about finding a trading edge
• Experiment, discover a niche best for your talents, trading
edge and then master that edge
• The politest trader I have ever trained
• Trader in The PlayBook

Lessons from Swang
• Trade your niche
• Trade a niche that highlights your talents
• Consistently and with a process push yourself to
trade bigger
• It doesn’t hurt to be polite to the managing partner
• High ability to process information quickly matters

SMB KTG- 4 years ago- So can you!

SMB Training home run- Finding Nadal

SMB College Training Program
• Nadal took the course
• In-House for 6 weeks
• Applied
• Showed edge with his results
• We got to know him in training
• Gained a set on our desk
• Had not graduated college yet

Lesson #4: Nadal trade - what are
low floats?
• Generally low floats are stocks with <10M shares
float
• High short interest >20% based on float
• Highly manipulative
• Wide spread
• Highly shorted and potential short squeeze

Holding multiple time frames

Takeaways
• This is one trade that works over and over in a
strong market
• Sector strength in strong market
• Strong intraday charts
• Strong daily charts
• Highly shorted = short squeeze
• >1-to-3 risk reward

Trade like a Shark

Lesson #5: Growth mindset
• Do you have any more children?
• Ivy league grad, D1 athlete, connected
• None of the above
• Growth mindset
• KBIO 350k loss and became even better
• Imbalances, automated trading, market plays
• Partners begin to admire their best traders
• Green $hirt

What is Vwap
• Price * Shares/(total shares for the day)
• Barometer of the average participant's price for
the day
• Used by big banks/funds as an execution strategy
and an execution benchmark

Swing Entry – Two Day VWAP

Lessons from Shark
• Growth mindset best for trader improvement
• Every trade is a gift from the market to learn
• Let trades come to you

The $million trader trading formula
• Growth mindset + passion + foundation +
experiment + niche + trading edge +
train + A+ setups trade big + talent +
bionic + patience + perseverance =
$million trader

SMBU.com/dailyvideo

#1 Market Lesson
• “You can be better tomorrow than you are
today!”- Mike Bellafiore, The PlayBook

Contact
• mbellafiore@smbcap.com
• smbu.com

SMB Chart Summitt 2017

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