So you took a $10,000 options class and they promised that you would make millions.
Then you paid $5,000 for a futures trading class guaranteed to help you “pick” the exact levels.
After that you flew down to the Bahamas for $3,000 for a “live trading event.”
The next thing is you’re down over $100,000 trading.
That’s not what MrTopStep wants to be part of.
Evolve or Die
As the trading floor has evolved so has our S&P desk. For years, we were either the largest or one of the largest open outcry S&P 500 futures operations ever on the floor of the CME. Over time the 10,000 to 20,000 big S&Ps we used to do a day dropped to a few thousand a day. In response, we moved to S&P options and electronic execution. We evolved.
It was not by choice. It was do or die. In today’s high-speed world 99% of all futures are traded electronically and 80% of the option volume is done in the open outcry option pits. Most off-floor option traders say the best price discovery is still in the pit. But like everything else on the floor it’s constantly evolving. Never in history have things been able to change so fast.
The old days are gone. Sure a select few still make millions of dollars trading on the floor but it’s not like it used to be, when the pits were filled with futures traders. Before electronic trading the legends were true and a guy really could make $200,000 in the first half hour. Some guys never said a thing. They just came in, made bundles of money, and went away.
You didn’t even have to understand what you were trading. If you stood next to an order filler in the S&P pit you could make millions, and I mean millions! That not how it works today. The advantage the floor traders, the locals, had over retail or even professional traders was way out of balance. Today the average local in the S&P pit tries to make $500.00 to $1,000 dollars a day. They get run over just like everyone else. Their former edge no longer exists.
Making It Real
No indicator is going to be right all the time. It just doesn’t happen. Maybe if you have a good algo system you can make money everyday but for the average futures trader it is hard to do it using the old tricks. I use the word, “tricks,” because some old truths are greater than the market and will always be true. But you have to adapt your methods while retaining the essentials. As our desk has evolved, so has the way we look at the markets.
Before electronic trading we didn’t pay attention to what was going on in Europe or Asia. Fed meetings that moved rates and unemployment numbers were the big deal back then. Today we get bombarded with headlines, economic reports, earnings and news from around the world. And somehow everything is connected.
Woody Allen famously said, “90% of success is just showing up.” Nowhere was that more true than in the markets back then. All you had to do was show up in the pit to make money. Now you have to have a full war chest of trading tools. Too many can be confusing. Some folks have so many indicators they can barely see the actual chart. Not enough, of course, can leave you vulnerable.
That is why MrTopStep is a firm believer in reviewing new tools. In the next few weeks MrTopStep is going to unveil several new trading tools and indicators on top of the MrTopStep Imbalance Meter (MIM) which is what I want to focus on now. Like I have said many times, nothing works all the time and while the MIM may not have worked so well over the last few days or weeks there is a reason for that. Its called volume.
If there is no volume, the MIM just sits there. But that’s not how it worked yesterday. Remember, we want to keep it real so we are going to show you exactly where the S&P was at 2:00 ct when the MIM came out 94% sell side and what happened into the 2:45 cash imbalance and where the ESU (mini s&p) went into the 3:00 cash close.
When you look at this keep the big picture in mind. The MIM represents a whole new area of sophisticated data mining, which our experts call “unstructured data.” Our algorithms are like nothing else out there. It is to the current way of visualizing price action what charting has been to the linear price ticker.
But it is still just another tool in the MrTopStep Trading Tool Box. Whatever powerful tools we may have or create, we will never fail to do the essentials. We look at support and resistance, we look for price levels that may be significant, levels that might hold a lot of buy or sell stops. We still plan our entry and exit without chasing the market or trying to pick tops or bottoms. Above all, we maintain our calm and execute with discipline. In that context, the MIM is powerful, even on days when we choose not to listen to it. Without that context, especially the emotional mastery, it might as well be some guy shouting on TV.