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RT’s.
If I understand the bulk of the pit traders and locals, they are trying to
scalp a few points out of the daily trading range. I heard a quote from a
pit trader, and paraphrasing he said, “I don’t know why so many traders put
there stops near key support and resistance levels where they can be easily
gotten to, but I’m sure glad that they do.”
I’m sure that there are a bunch of other sure glad that they do things,
like buying out of the money options etc. but the point here is that to be
a winner you need to think a lot like they do. For example think; If I were
a pit trader what would I be hoping someone would do so that I could
exploit them. When you figure out what that is, don’t do the thing that
makes you an easy target.
For example nine days ago Soybeans put in a very large range bar against
the prevailing market movement. Why? The news was unremarkable and little
else was afoot. My personal opinion is that the market was becoming
overloaded with shorts. So they took out as many as they could within the
range. Those using parabolic stops for example were stopped out. Whether
that was good or bad is beside the point. If you were thinking like a thief
you might have taken profits earlier. Or had your stop placed sufficiently
far away to not be stopped out.
Us traders that are not in the pit cannot compete with pit traders on
their level because the lag with even real time data is enough that you
would lose most every time. This does not mean that you can’t win but you
have to learn to exploit your advantages as they do. So I submit that you
need to ask if I were in there shoes what would I do.
Best Regards,
Brent
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