I am not an indicator guy. I trade off levels, “setups,” things I see in the DOM, and things I feel on the floor.
How did I arrive at this “methodology”? Well, back in the pit days, that is how we traded; it was: What are the majority of the brokers doing? What are the big locals doing? We’d remember prices that stopped the market or turned the market; we’d also keep track of big orders in our heads: “The last time the market hit “x” the broker that fills for Smith Barney offered 2000.” That type of thing.
So as trade moved to the screen I stayed the course. Now, I have to say, in the interim – as I was transitioning from the pit to the screen – a few people touted indicators to me – and I never saw how they projected a trade … it always seemed they were late.
When you have something that allows you to trade the way you want – a methodology that gives you the number of trades you’re looking for in a day, with risk parameters that fit your personality, and profit potential that is acceptable to you – why change? Sure, I had to overcome my incredible fear of computers; I had to accept the inefficiencies created by the electronic market and accept more risk (wider stops), and I had to stay more patient as I traded. But that was my learning curve.
It’s such a rewarding way to trade – to go into a session with expectations of what should happen – and seeing the market bear those expectations out. It gives you the confidence to hold a trade when you created an edge for yourself by knowing “y” was support, had resting orders filled on first touch – and took no heat.
This is trading. Yes, one of my clients built a system off my work and I’ve been using it a bit – it seems pretty good at picking tops and bottoms in mini-Dow. Another client automated my best setups – and that helps me to not miss those trades if I’m focused on another market or passing on updates in the MTS room. I was recently shown a yield curve “meter” that looks interesting, so I’m devoting some time to that.
Maybe I’m evolving….
[Ed. note: Jack is one of our lead educators in the new MrTopStep Trading Room, where he gives updates live from the floor every morning as well as an ongoing discussion of his trades and advice. Meet him and our other educators in tomorrow’s webinar at 11 a.m. Central (link)]
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