Book Review : Pit Bull by Martin Schwarz

A nice read, a great story of one of the legendary traders.

Not too much to learn from it, but really I had fun with this book and it's tales from the pits.

You won't learn much about trading here as pit trading is all but obsolete. But you will learn a bit about trading mindset, hard work and discipline.

There is a bit of useful info here though :

The New York Stock Exchange Net Ticks (TICK) . A short-term trading trick is when the DJIA opens up and the TICK (how many stocks on the NYSE had a last tick that was up netted out against those that were down) is -200. This usually means that there is more selling pressure in the broad market and the DJIA is being held up by only a few stocks, so you can usually go short.

The Short-Term Trading Index (TRIN) is another short-term trading tool that shows me whether volume is flowing into advancing or declining stocks. It is calculated by taking the ratio of (up issues/down issues) divided by the ratio of (up volume/down volume). If more volume is flowing into advancing stocks than declining stocks, the TRIN will be less than 1.0. A TRIN less than 0.80 is an indication of a stronger buying bias; above 1.2 is an indication of greater selling pressure. It can help key you in to strong or excessive buying or selling.

The Dow Jones Net Ticks (TIKI) is the net number of the thirty DJIA stocks ticking up or down. A value of +26 to +30 or -26 to -30 often suggests that a buy or sell program has just gone off, because it is unusual for all the DJ stocks to be ticking up unless a buy program was buying them all at the same time.

Take Out the Highs, Take Out the Lows:

This is one of my spots. In non-trending days where the market is trading back and forth in a range, the locals in the futures pits will make money trying to take out the stops, which are oftentimes concentrated around the highs and lows for the day. In a non-trending day, since the locals know where the stops are, they will accommodate both sides and blow out the stops on the highs. No sooner will they do that then they will start heading south and take out the stops on the lows. The way to counteract this is to put bids in below the low and offers above the highs to participate with the locals.