c19 JWBT016-Busby October 9, 2008 11:2 Printer: TBD
184 THE WILD CARDS
only 9 or 10 points in the course of a session. At the time of this writing,
that same range is about 20 points. The changing environment mandates
a slightly different strategy. That is only one example of how the markets
change.
From many years of experience, I have developed a trading strategy
that centers on time, key numbers, and market indicators. I use time in a
number of helpful ways. First and foremost, I take a global approach. Trad-
ing goes on somewhere in the world virtually 24 hours a day. The most ac-
tive trading centers follow the path of the sun as it makes its way across the
sky from east to west. Asian traders have the first shot at the day. When we
are enjoying Sunday evening, traders in China, Japan, Singapore, and other
Asia trading centers are busy buying and selling. When Asian exchanges
wind down, Europe gets going. By the time most U.S. traders get ready to
make their first trade of the day, many parts of the world have looked at
the markets, evaluated them, traded them, and shut them down. I use that
knowledge to add more depth and insight into my trading. If a buying wave
is spreading from Asia and Europe to the United States, I will be ready to
surf it. Likewise, I will be prepared if I see a sell-off coming my way.
I also use time to help me select the best moments to place my trades.
I know that some times during the day have the right volume and volatility
to allow my trades to pay. Therefore, I trade during these times and stay
out of the market when the odds of success are not in my favor. In addition
to getting into the markets at the right time, I also want to be out of the
action when the time is wrong. If markets are flat or unpredictable, I sit on
the side lines and wait for better opportunities.
Another vital aspect of my trading method is key numbers. To make
money trading, you have to know and use key numbers. These numbers
point the way for buying and selling at the ideal time. They also identify
price points for placement of stop/loss orders. Markets tend to move up
and down between key numbers. Therefore, knowing them helps you stay
clear of bad trades and gain more consistency. It is painful to buy the top
or sell the bottom. However, traders who do not use key numbers often do
just that.
To help me stay on the right side of the action, I rely on the Seven
Sisters, a group of indexes that keep me on track. Specifically, I track the
equity index futures, including the S&P 500 futures, the Dow 30 futures,
and the Nasdaq 100 futures. I also follow the German Dax futures. To add
more breadth to my analysis, I watch gold, bonds, and oil futures. By using
the Seven Sisters, I have a good view of the action of the overall market.
Finally, I rely on market indicators. Before I put my hard-earned cash
at risk, I want to be certain that the odds of success are in my favor. I
want to see the New York Stock Exchange (NYSE) tick moving my way. I