I’ve been trading since the early 90s. I was the head trader at my Broker Dealer in New York City making markets in NYSE and NASDAQ securities. It was a full-service brokerage firm doing business in anything from annuities to bonds to options to retail etc. the only thing that I had a real interest in with the trading department. It was a lot of pressure and responsibility having to manage customer accounts as well as brokers. As the Internet became more and more accessible I found fewer reasons to try to sustain a brokerage firm that has such personal and professional liability attached to it. The invention of SOES (small order execution system) opened my eyes to a different way to be involved in the trading world, on a professional level, without the burden and pressure of the regulatory agencies, thousands of clients, endless paperwork and long days. After paying a visit to one of the founders of daytrading, Harvey Houtkin, I instantly realize this is something I wanted to pursue. Not long after that I closed down the firm and decided to trade my own account as a day trader on the SOES system. I remember sitting on a trading desk and having to call out my orders to to someone sitting on the other side of the desk will input the orders manually and at the end of each day I would get a dot matrix print out of all my trades. Back then, Dell, Cisco and Applied Materials with the highfliers.
As the technology improved so did the trading platforms and I eventually wound up trading from an office with over 100 guys in it. I did that for a few years until the platforms improved to the point where I could trade remotely from my home. In the late 90s early 2000′s we didn’t use charts to trade, we watched the market makers and their patterns and then try to follow the leader. We traded levels and you had to remember numbers because we didn’t have charts to look at. Listen to the S&P call over a loudspeaker and we would hear the guys in the pits and that was the edge that we had. We used the S&P call or squawk box as a precursor to possible stock movement. The only thing we focused on the market makers whether they were initiating buying or initiating selling or where they responsive buyers or sellers. Once stocks changed from fractions to decimals I really struggled as a traitor. That is when I turned to charts and started to read every book imaginable and tried every indicator I could find that I thought in some way could represent marketmaker activity & volume that I used to see so clearly. Needless to say that didn’t work out very well had some good times and some bad times but it was a real struggle. I turned to futures in 2004 for various different reasons and I never looked back.
Still trying to find the perfect indicator combination of indicators, I never stopped watching the volume and price actions the best that I could. I could never quite see the same buying and selling as I could when I was able to watch the market makers. I used to draw rectangles and circles around areas of price action and try to use a volume histogram to help determine what the best locations would be for volume traded at a particular price but it wasn’t until a few years ago that I found some software that automated the process. So this is where I am at this point in my trading career and I am very comfortable with the basic things that I look at. It has become very repetitive and I really just look for the same setups over and over again because they happen all the time.