Customer Reviews

One Good Trade: Inside the Highly Competitive World of Proprietary Trading (Wiley Trading)

5 star:		(61)
4 star:		(8)
3 star:		(5)
2 star:		(5)
1 star:		(6)

 

 

As several other reviewers have indicated, this is "not just another book on technical analysis." While that's completely fine -- there are lots of other good books out there if you want a book on any individual topic, like technical analysis or trader psychology, and I've read dozens of them -- I think this book swings too far in the opposite direction. The book fails to give any but the barest details about how an individual might go about applying the principles and methodologies that have supposedly worked so well for the author's firm. We hear over and over again about trading "stocks in play." What does that even mean? All we are told is that stocks in play are those for which there have been recent news releases, and have "good order flow" and "enough volume." Perhaps I'm part of a dumb minority for whom the meaning of these vague terms isn't completely obvious. However, my claim is that the author simply doesn't elaborate on any of his claims in enough depth to make them useful for the unwashed masses who don't already work in a prop trading firm. He has an entire chapter dedicated to describing what kind of people get hired at firms like his, and yet he somehow manages not to say anything more substantive than "firms look for people who are a good fit for their culture." Wow, what a revelation. Bottom line: I'm not looking for someone to hold my hand through every minute detail of the trading process, but I find it ridiculous that a ~$40 book with great reviews on Amazon would do nothing more than make broad generalizations about how to achieve consistent profitability. The book is reasonably consistent in reminding readers that success is derived from discipline and process rather than gut feelings or even innate trading talent, but there are plenty of other books that convey that message (and do it more concisely and/or more concretely).

My second major beef with this book, besides its lack of specificity, has to do with the writing style. The book is written in a very colloquial style, with plenty of bad grammar, irritating redundancy, and a deficiency of structure. That may not bother some people, and it may work fine if you're presenting in a trading seminar, but I find it cliched and unprofessional in a book with this topic and price point. On a related note, the author spends a lot of time giving sports analogies -- not a problem per se, though they're not terribly original and start to get old after you've read them multiple times over the course of the book -- and generally touting the skills and achievements of himself, his partner, and a subset of the traders who work at his firm. A few anecdotes about real-world traders and scenarios are great to give color to any discussion of trading topics, but I didn't buy this book just to hear about so-and-so and how he joined your firm -- particularly if you're not going to give me any useful guidance about how I can replicate that person's success.

In the end, if you want to read a lot of vague blather about SMB Capital and how a handful of its traders have done well for themselves, go ahead and buy this book. But if you want something a little more focused and relevant for the real world, I'd recommend looking elsewhere.

I don't often write reviews, but I really liked this book. I read this book in two days. I first heard about Mike Bellafiore through Dr Brett Steenbarger's blog, "Traderfeed".

The title, "One Good Trade" refers to a process as taught by SMB Capital, a proprietary trading firm which Mr Bellafiore owns with a partner. The process entails following the seven fundamentals taught by SMB through the entry and exit of a trade and then going on to the next trade and following those fundamentals again and repeating this process for the rest of your trading life. The seven fundamentals are detailed in the book. Mr Bellafiore's emphasis is on this process. He states that making and losing money on any specific trade is not the focus, but following this process IS the focus and making one good trade after another by following these fundamentals is the essence of good trading. You can lose money on a trade, but if you follow these fundamentals and this process, your profit and loss statement will ultimately take care of itself. He compares this to sports teams and the way they practice the fundamentals over and over and then execute those fundamentals in the game. There are plenty of sports analogies here with the implication that an elite trader must go through the same kind of rigorous and disciplined training that successful athletes go through. Having played sports in high school and college and now trading full-time, I have to agree. The book begins with the explanation of this process and the principles of this process are felt throughout the book. Mr Bellafiore is not here to teach some new technical analysis technique, thank God. He basically states that his firm already knows those techniques. That's the easy part, the difficult part is training traders to FOLLOW and trade the patterns that he already knows are successful. This reminds me of the statement made by Paul Tudor Jones that you can give most people tomorrow's Wall Street Journal and they will STILL lose money. It's the difference between hitting perfect shots on the driving range and then executing those same shots in a competitive round of golf. The emphasis here is on the psychological side of trading which, for me, is really all there is. It doesn't really matter how well you can call markets if you are exiting trades with a .20 cent profit, because you are so exited about being right and making a little bit of money, when the target on the trade was a dollar, The emphasis is NOT on being right in your market forecasting skills, but on building the skills to execute each trade correctly. So Mr Bellafiore is stating that being right in and of itself is NOT enough, the trading process is MUCH more than calling markets correctly. Being right has much more to do with ego and pride than making money. So paying attention to the fundamentals and their execution rather than bragging rights about market direction is, for Mr Bellafiore, the STARTING point. And executing these fundamentals is MUCH more difficult than one anticipates and requires YEARS of dedication, sweat and hard work. No wonder there are so few elite traders or, for that matter, elite anything. It's not that correctly calling markets is not important, it is, it's just that forecasting becomes secondary to skill building and discipline.

The book is sprinkled throughout with stories of traders, both successful and unsuccessful. I found these stories very interesting and I recognize one of the successful traders from Mr Bellafiore's blog. (A blog that, in my opinion, is worth your time). In one chapter, Mike Bellafiore describes the hiring process at SMB and how difficult it is to choose a person that will succeed as a trader. A Prop firm funds traders that they train and the firm makes money based upon the success or failure of these traders.

Later on the author details some of the strategies commonly used by SMB traders. On the surface, these are similar to patterns which I think most traders are familiar with. The difference is in the application of these strategies and for that I think one may need to go through the SMB Training. I started trading before Prop firms became as popular as they are today. If I was just starting out today, I believe this is the route I would take if I was fortunate enough to be chosen. The hiring process is VERY selective. Mike Bellafiore is big on traders getting out there and sharing and exchanging ideas. As most independent traders know, this is a lonely profession. It doesn't have to be, but most traders are in a room full of screens with only their own minds and a few internet feeds. For me, I am happy Mike Bellafiore took the time to exchange his ideas with us. I am currently reading the book for the second time. This is definitely a book worth adding to your trading library.

Naturally, after buying the book, I check out the SMB website and they are selling their training for $6000. For a mere $280 or so a month, you can watch them trade every day.
There is some good advice in this book but too many of the macho claims are off the charts. One trader has supposedly made a profit every single day for the past 2 years..and he is not their best trader. How about expanding a bit on how this was accomplished? Some detailed examples of actual trades?
In the beginning of the book we are lectured on trading "stocks in play", one or two every day that are active and volatile. Ok.
Near the end of the book, we learn about another SMB trader who can carry 30 positions at one time. Apparently, they change styles as the market changes. Sounds easy. Anything specific we should be looking for? If I don't know which style I am trading at the moment, what good is this book to me? Guess I have to subscribe to the website.

Having read more than a few books on investing, and being a full time trader (non prop), I was hoping to learn a few things or hear some unique ideas from Mr. Bellafiore. Alas, that did not happen. If you are looking for a book written by an ego maniac who has a few good stories, repeated again and again, while promising to teach you something, but then gets sidetracked by another 'cute' story, this is the book for you. If you are looking to learn more about the stock market, either technical wisdom or mental training to make you a better investor, don't bother with this one. Stick with Mark Douglas, Tharp, Sperandeo or Bulkowski.

Be prepared it is long, I would never write a review this long or one in general really, but I felt compelled to do this. Actually I think it was my duty to direct readers away from this book.

I have never read such dross in my life. Self-glorification, narcissism, fluff, delusional ideals, and unethical statements can describe this book. It is so unbelievably awful, the fact that this book is popular can only be explained in two ways, the readers are naïve or have no education about finance and markets (which is ok, everyone starts somewhere) and/or looking to get rich quick. Let's dissect the book to some lines I picked out that I was flabbergasted about.

Check out page 18. The author and his partner rip apart a recent college grad and it's now published in his book, not only that he mentions how they will make so much money off the kid. Wow are you kidding? You paint a nice façade Bella.

Page 41. The author says traders shouldn't work hard. Hah that is great, your right why bother trying to develop yourself and further your learning? And your athlete metaphor doesn't work because and athlete won't play w/o a multi-million contract

Page 49. The author decided to spare the reader the specifics of what is relevant information when it comes to day trading stock. Explain to me again, why are you writing a book?

Page 143. The author says he can "sense by the PENNY where a stock should be trading 98% of the trading day." No he cannot, this is just asinine, if you are rational and have a brain than you shouldn't spend more than 6 seconds analyzing that quote.

Page 148. Finally 148 pages in the first intelligent character emerged, CDT. This woman apparently was very smart, hence why she left after one month or two. She said a job to good to pass up came by. This means for the very short time she was at the authors firm realized that buying in front of size in the depth of the book is ridiculous and was applying to different areas of employment. But of course the author spun it to suggest she didn't believe, hah yea who could believe the moronic idea of buying thousands of shares on the premise that you think there is a buyer or seller.

Page 171. Bella say's "We will figure it out." Mind you, risk is being put into the market and they are just going to figure it out. This was said about trading a stock.

Page 172. The author admits to not even knowing what IRR (Internal Rate of Return) means. I almost threw the book into the trash at this point.

Page 185-186. The author writes that black boxes don't have really any effect just makes trading a bit more difficult. Then says laughable things like more black boxes fail than traders (source?). And programmers don't know how to trade, your right Bella I'm sure a person with a PhD in computer science couldn't comprehend buying in front of size, actually I don't think he could because its so idiotic. Trust me if Bella had the capital and the possibility to create a phenomenal Algo trading system, he would.

Page 194. The author laughs about how if you buy your traders food or beer you earn their loyalty. Also scattered through the book he nearly brags that pizza is bought every Friday. The funny this is there are thousands of firms that fully cater lunch and breakfast daily for their employees. Some even offer stipends for dinner if you need to stay late. Oh wait traders are not encouraged to work long hours. The prop world is a joke and the traders barely make a living that's why they love anything free.

Page. 206. The author says you can identify HFT trades and maintains that he can do exactly that. He also suggests some strategies that will phase out and be eliminated. This is just his convoluted mind thinking he knows it all and is correct. You will never EVER know who is on the other side. You may see some weird stuff happen in the book but that maybe be thousands of different HFT algos playing around.

Page 271. The author says that loses by traders are offset by profits of others. If the losses are greater profits then the firm pays out expenses from reserves. Turn your attention to [...]. Now I am not insinuating that the authors firm uses the profits to pay for expensive and may run into shortfalls, but with the recent trend of prop firms closing down or converting to B/D I'd be weary.

Another thing I'd be weary of are the rampant probabilities used in this book. I would love a source to the empirical research done to show these strategies work in the way they claim.
Go to the website look how they sell products that reach prices of $6,000. You can't even put those skills on your resume. Being a day trader you are useless with no transferable skill. Do you want to waste your life sitting looking at level 2? Seriously? Don't fall for the hype in this book. Notice how the book always talks about the NASDAQ bubble and the other great days. All the glory is about how it used to be.

Bella was quoted saying "Discretionary traders are losing" when talking about HFT. Yet in the book he says they won't affect day trading just make it slightly more difficult.

[...]

Jim Rogers said it best; he never met a rich technical analyst, then corrected himself and said, yes, he did, the ones selling their service.

Bella's whole ideology of reading tape is dying as well. Big orders are being converted to hundreds of smaller ones because you cannot drop a block order now-a-days on the exchange, only a moron would, or broker that doesn't care about his clients. That means these big orders blend with the million other 100-1000 share trades that fire off every second with the HFT. Those large orders are moved to different conduits such as dark pools and cross networks.

It's really sickening this book, the author tries to paint a picture that the prop world is this place that you dream to get to because it's so great, in reality it is breaking down. Sure there will be one or two but so you want to be in such a brain drain part of the industry? Discretionary trading is an embarrassing profession. Think I'm crazy? Go try it out and let me know if you are still doing it after a few months, even the author says that most fail, what he doesn't tell you is he still profits handsomely whether you do or not. And mentioned in the book the traders pay-out was complicated, well it isn't, its' pure robbery. But that is a whole another discussion of it's own.

So if you want a book about a bunch of day trader fluff and useless information, then spend the ridiculous price for this book, or message me because I'll give you mine. There is truly just nothing here.

This book offers some interesting insights into the world of PropTrading, but more than anything it is a repetitive series of similar tales by an author with an oversized ego. It is 300+ pages of chatter that a "Market Wizards" book could have packed into one chapter. Overall it was a semi-interesting read, but not really worth the $35 and several hours it took to read.

I have just completed this book today. This is my first book review. Most of my purchases relied on the reviews of other readers. Perhaps I should not rely on reviews only.

Anyway, I am not sure why there are so many 5 stars reviews. It is certainly disappointing. The book contains a lot of stories about the success and failure of the traders that were recruited by the firm.

"In One Good Trade: Inside the Highly Competitive World of Proprietary Trading, author Mike Bellafiore shares the principles and techniques that have enabled him to navigate the most challenging of markets over the past twelve years."

I do not think much of the principles and techniques are shared. This is not a book to pick up if you are looking for trading techniques or principles behind the trade.

The reason I gave it 2 stars instead of 1 is because the stories are pretty amusing and it is easy to read.

How much money has the market taken from you over the years? How many books have you read? How many "systems" have you tried? How many newsletters or daily hot picks have you subscribed to? How many seminars have you attended where the "trading pro" has told you his trading buddies are worried about their livelihoods because of the secret formula he is about to share with you? (But only if you act today and hurry to the tables at the back of the room!)

If you are anything like me, you regretfully see yourself nodding in agreement with what I have written above. I wish there was a stronger word than wish, that a book like Mike Bellafiore's One Good Trade had been around when I began my tempestuous affair with Ms. Market years ago. This book is that good!

It is not simply a rehash of so many books on technical analysis (hey, look! a head-and-shoulders set up!) or simply war stories of successful trades past. It is all of that but so much more. This book gives you the ability to read between the lines, so to speak. It takes you inside the world of successful traders; who they are and how they came to be.

Surprise! There is no Holy Grail. You want to know how the consistent six and seven figure earners make their money as traders? They grind it out. One good trade at a time. One day at a time. Mike does a wonderful job of disabusing people of the notion that trading is "easy money" and glamorous. Mike tells stories about both successful and unsuccessful traders at SMB. Chances are you will see a little bit of yourself in each group. But the hard truth about making money trading, like dieting, is that you have to put in the discipline and the hard work. I worked on a trading desk and can tell you that the information he presents is spot on!

Whenever anyone asks what books they should read to learn more about trading, Edwin LeFevre's "Reminiscences of a Stock Operator" tops the list. This book should be mentioned in the same breath and certainly deserves a spot on your shelf! Grab a highlighter as you read. You have a lot to learn.

(And you should order it right now just in case he discontinues printing it like Seth Klarman did with "Margin of Safety"! ;)

Another trading book that has a lot of pages and provides very little new information. I reread several chapters because I thought I had zoned out and missed the point. It turns out that many chapters have no point. As Steve Martin said in Planes, Trains and Automobiles, "when you are telling a story, here's an idea, have a point, it makes it so much more interesting for the listener".

I have read over 30 trading related books and this one ranks toward the bottom of the list -- in fact I just dropped it in the trash.

Generally I'd recommend this book for intraday or swing traders. It contain important points that need to be considered, and describes nicely how they are practiced by prop traders.

Why 3 points and not more? First, I don't like it when an author stretches a book over 350 pages when less than 100 pages contain any real value. From the point of view of an active trader, I buy trading books when I think they will assist me in trading and I want to make good use of my time. Some chapters can be skipped altogether, other are just too long and repetitive. The author tries to be funny, but really, he isn't. Some humor can add to a book, but in this case most stories / anecdotes are just lengthy space fillers between the parts with useful content. If you are a gifted trading coach, or a gifted trader, that's great, tell us about what you know, don't try to be Michael Lewis if you havn't got his kind of talent.

The book does have important points about the process a trader need to go through to become consistently profitable. But if that is what you're looking for, better get one of Steenbarger's books, such as Enhancing Trader Performance. If you want well written entertaining books about trading, get Liar's Poker or Pit Bull.