Millionaire Tradersbig traders and the really great traders. So I tell people, if it is not
on the inside of the bid and the offer it doesn’t mean a whole lot.
Q: So what’s the basic protocol for you to try and read the price
action in futures?
A: Prior to being in a trade, I’m pretty much watching the chart.
I’m not watching order flow very much. Once I’m in a trade, I watch
the order flow a little better. I will watch for who’s refreshing on
the bid and the offer. But prior to that time, I’m pretty much a
chart trader.
Q: So you’ll enter on a chart signal, but manage the trade, by
watching the book itself, the order flow?
A: Yes. Yes. I don’t know if that’s good or not, it’s just that I have
a difficult time watching the order flow if I don’t have anything at
risk.
Q: What about the order flow catches your eye and makes you
say this is interesting, this is something I need to react to?
A: I think all traders probably follow order flow a whole lot
more when they’re on the wrong side of the trade [laughter]. It’s
true, I really pay a lot more attention when I’m out of the money.
Every once in while you’ll notice that someone continues to sell or
continues to buy at a certain level, and that’s a lot more obvious if
you are a few ticks out of the money. If I’m in the money, I don’t pay
much attention to it because I like to try and stay in the trade longer.
Q: Are you going back and forth between the book and the
chart? Is the book itself overlaid on the chart so you can see both
the price action and the chart action at the same time?
A: No. These are two different programs on different PCs.