I am not going to be doing the normal “highs and lows” stuff today. Instead I am going to talk about the upcoming “MrTopStep Unplugged” webinar on Feb. 28 at 10:00 CT.
Sometimes it’s not in your chart and it’s not a moving average or an overbought or oversold signal that makes you react … it’s your gut. You have seen the same price action many times before and know the results, and instead of waiting for a confirmation from your trade signals, you get a gut feeling and you exit the trade. Call it intuition or survival skills; you made a gut decision to exit.
There are all sort of tools that help traders “read” the markets, but with algorithmic and program trading making up as much as 80% of the daily volume of the S&P, it’s going to take a lot of tools to stay ahead. It’s also going to require the proper trading plan along with a good exit strategy, both in profit and loss. For the last 30 years I have written about my exploits on the trading floors and my travels around the world. I have, as they say, been to the top and the bottom of the mountain. The desk on the floor of the CME served the little guys and the big guys, but we always stuck with one motto that it didn’t matter if it was a 100 lot or a 1 lot, it was someone’s money. I can’t turn back the hands of time, but when I look back I know our desk always did its best. We fought for the customers when no one else would and we never gave up.
Being a Trader Is Not an Easy Job
Remember the old saying, if this were easy we would all be rich? Well it was easier in the ’80s and ’90s. If you were a smart floor trader or an off-floor trader with a good methodology, you could make big money, and a lot of traders did. Some made millions and quit, while others stuck around and made and lost. Everyone wanted to be a trader. It was the thrill of the victory and the agony of defeat and it was the only place in town a guy could make a couple hundred grand a day and leave early. But as investors smartened up and electronic trading came along, that gravy train came to a screeching halt. After years of seeing young kids fresh out of high school or college rush down to the trading floors of the CME or the CBOT, the roar of the futures pits ceased to exist. Some people dreamed about the day they could jump up and down, bidding and offering with their hands, making millions and only working from 9:30 to 1:15. It was, my friends, an easy job.
Things change, and as traders we know things are constantly evolving. Old things that used to work don’t, and new tricks only work until some programmer codes it into the next algorithmic program. Today traders have to use all the tools they can and be prepared to “shuffle their feet” on a second’s notice. If they refuse to adapt, they are out.
My name is Danny Riley. I am the president and owner of MrTopStep.com. I have been on the trading floors of the CBOT and the CME for 38 years and have been part of every major stock event since 1985. I do not pretend to know it all, but some of the things we used to make money on the floor still work.
I have worked for some of the best traders in the world, and while I didn’t always tell them to buy or sell, I provided the flow and made their trades happen with the best possible execution. When you’re trading in multi-million-dollar amounts, it’s not as simple as just pressing a button. I still do this today for many banks and hedge funds. I give the same information to the members of my chat room and one special client, an old friend and one of the original “Market Wizards,” the PitBull. Journalists who don’t trade can’t interpret order flow (who’s buying or selling and why). Only the few traders who actually execute those large and small orders know what’s happening behind the scenes. So please sign up for the MrTopStep Unplugged webinar on Feb. 28th at 10:00 CT. I hope I can start helping to give you some coverage, too, of the information that really affects the markets and the real-time action and order flow.
MrTopStep…
SIGN UP HERE!
In Asia 9 out of 11 markets closed higher and in Europe this morning 12 of 12 markets are trading modestly higher. Today’s economic calendar starts out with jobless claims, Philadelphia Fed survey, leading indicators, EIA natural gas report, EIA petroleum status report, 2-year note auction, 30-year TIPS auction, Fed balance sheet, money supply and earnings from DIRECTV (DTV), Wal-Mart (WMT), Priceline PCLN), T-Mobile (TMUS).
WHERE HAS THE VOLUME GONE?
Yesterday 125k ESH15 traded in Globex, pre-8:30 CT open, and at the end of the day the total volume was 1.08 million e-mini S&P contracts traded, which comes out to 850,000 contracts traded on the day session. If program and algorithmic trading made up (let’s be nice) even 65% of the volume, that means only 380k ESH15’s traded.
Our view: ESH15 again stopped short of the big figure at 2100.00, double-topping at the 2098.50 level. Is the bus too full? Yes, it is, but when you see the S&P back and filling and headlines saying more federal bank presidents favor keeping rates low, it makes it hard to be a seller. Today we have several numbers and a small level of earnings to get past, but we think after that the ESH15 is going to make a run for the S&P 2100 and higher buy stops. Yesterday there was a total 1mil ESH traded, but 150,000 of that came from Globex pre-8:30 open. The lower volume has created a thin-to-win environment. Our call is for a two-way trade; sell the early rallies and buy weakness.
As always, please use protective buy and sell stops when trading futures and options.
- In Asia 9 of 11 markets closed higher: Shanghai Comp. +0.76%, Hang Seng +0.19%, Nikkei +0.36%
- Europe is mixed: 6 of 12 markets were trading higher: DAX +0.30%, FTSE +0.07%, MICEX -2.49%, Athens GD.AT +2.44%
- Fair value: S&P -3.03 , Nasdaq -1.25 , Dow -30.70
- Total volume: 1mil ESH and 5.1k SPH traded
- Economic schedule: Jobless claims, Philadelphia Fed survey, leading indicators, EIA natural gas report, EIA petroleum status report, 2-year note auction, 30-year TIPS auction, Fed balance sheet, money supply and earnings from DIRECTV (DTV), Wal-Mart (WMT), Priceline PCLN), T-Mobile (TMUS).
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