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After following the squawk for just a short while, here are my initial thoughts:
1) The big boys (Merrill, Goldman, Deutsche Bank, etc.) can be wrong, or they may be doing some sort of fakeout that you're not privy to--conclusion: don't ever trade based on what the squawk caller says the big boys are doing.
2) Sometimes the caller says something really valuable, such as "the locals are going to whack the eminis" and then you probably can trade on that--this happened last friday, and the caller was dead on the money.
3) If you get a good caller, there is alot of information they transmit if you know what to listen for---e.g. Ben Lichtenstein's Q&A session has been invaluable in this regard.
4) There is a certain sophistication to the noise levels in the squawk. Here's one valuable tip: if price is coming up to strong resistance, and then pierces through with a SUDDEN burst of noise in the pit, then you're best bet is to fade the move. If, however, the noise builds slowly, then the probably favors a true breakout.
Taz |
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Thanks, great tips. I was looking at using traders audio when I'm ready to benefit from it. Glad to hear some good remarks on them.
I want the pit noise more so than the caller I think. For the exact reason you said, to fade emotions on key level breaks. Just like I'll watch the tape and see if the big blocks step in or if its all noob emotional buyers.
And would you say on continuations you want the noise to blast and the pullbacks to be soft volume?