Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

Soultrader

Pit Noise: Trading with an Edge

Recommended Posts

Many traders are familiar with pit noise. With the advancement of technology, any trader can receive live pit noise directly on their computer for a nominal fee. Although the edge of being a floor trader does exist, that edge has signficantly reduced over the past decade. With level 2 quotes, fast execution, pit noise, etc.... private traders are now playing on a equal field to floor and insitutional traders.

 

Pit noise is crucial if you are an intraday trader. I can not imagine trading without it. For those who are unfamiliar with pit noise, this thread is for you.

 

The main channel that should be used in intraday trading is the big S&P 500 pit noise. This is where the big boys play. The S&P 500 usually takes the lead, followed by the dow/russell/nasdaq, and equities. So understanding pit noise gives you a slight edge and sometimes a heads up signal before price.

 

At first, pit noise can sound annoying and complicated. To a new trader none of the lingual will make any sense. Constant yelling of numbers, names of market makers, top tens, etc... You will first need to learn the terms. A full comprehensive list can be found here.

 

CLICK HERE FOR PIT NOISE LIST

 

Go over the list and learn the basic terms. Listen to the pit noise afterwards, you will be surprised at how much information one can absorb from all that chaotic noise.

 

Obtaining pit noise is easy. This can cost anywhere from $100 - $200 a month but is worth every penny. Do a google search on pit noise or private message me. I may be able to send you a special discount offer from my former vendor.

 

Here are a couple things you need to know when listening to the pit noise.

 

1. The commentator or speaker can become very emotional and energetic when order flow is heavy. Try not to get over reactive yourself. Stick with your plan. Use pit noise as a different set of tool for your trading.

 

2. The pit is the noisest in the opening hour and last hour. Also, you will be able to determine if the pit is crowded or not just by the level of the noise. The pit gets dull before national holidays. You can tell if a market is going to be choppy and nontrending just by listening to the level of excitement in the pit.

 

3. The pit is the center of human emotions. You can hear the voices of panic and greed. If pit noise is extremely high during a uptrend or downtrend, this is a good confirmation of a valid trend.

 

4. Watch out when pit noise becomes quiet after a trend. This usually indicates lack of interest and prices will slowly reverse or chop around.

 

5. Listen carefully to determine who is holding the bid or offer. Many times you will hear "paper seller", "locals selling into strength", "Goldman a buyer now", etc... Enough of these and can lead to a short term reversal.

 

6. Learn to filter out reliable information from noise. Floor traders play middleman to provide liquidity. They do not move price. What moves price is the other time frame buyer or seller that steps in. Recognize the difference.

 

7. Listen to pit noise for some time until you fully understand it. Most importantly understand the level of noise. On a scale from 1 to 10, one indicates no interest. Ten indicates extreme emotions.

 

If you have any questions, post them here. I will be glad to answer any questions. :)

Share this post


Link to post
Share on other sites
Do you have any recommendations on where I can obtain pit noise? Also, what is the cost of this? Thank you

 

Depending on your vendor the cost can range anywhere from $100 - $250+.

 

Check your pm... I just sent you a link to our preferred service.

Share this post


Link to post
Share on other sites

I'm investigating using a bit of pit noise. Has anybody here anything to report?

 

I see there are a few services available

 

CME marketSound

 

traders audio.com

|| Traders Audio ||

which offers S&P broadcast or just the background noise + E-mini squawkbox. There are free trials

 

'Trade the News' looks interesting too

Trade The News - Products - Forex - Live Audio Breaking News Analysis and Futures Calls

 

thanx

Share this post


Link to post
Share on other sites
Traders Audio is probably the best one. Alot of day traders I know rely on it including myself.

 

Thanks ST!

 

In your opinion which one is most useful - the pure noise or one with commentary?

 

rolange

Share this post


Link to post
Share on other sites
Guest cooter
There is a discount link for Tradersaudio. PM me if you are interested.

 

Hey Nasdaq,

 

A few q's if i could....about the Pit Noise.

 

Do you find it useful in your daily trading?

 

Is it worth the monthly cost for you (in other words, do you think it helps you net more $$$ than it costs)?

 

Do you listen to the pit noise, Ben's calls or both?

 

Do you follow Ben's calls, or fade them? Same with the noise - go with it , or fade it?

Share this post


Link to post
Share on other sites

Ben doesn't make calls, he just reads out the bid, ask and trade prices and describes what's going on in the pit.

 

Pit noise is just a very imprecise way of measuring volume on the SP contract. You'd be better off looking at ES volume which is where all the liquidity is. Pit noise is not going to give you some secret, magical "edge" which other traders haven't discovered.

Share this post


Link to post
Share on other sites
Guest cooter

Yeah, thanks for confirming my understanding of what Ben does. What's I'm trying to find is.... is his service useful or not to traders.

 

Do you fade his observations like "One of my largest brokers has plenty to sell... Merrill just sold 200 and is looking for more..."? You get the point....

 

 

 

Ben doesn't make calls, he just reads out the bid, ask and trade prices and describes what's going on in the pit.

 

Pit noise is just a very imprecise way of measuring volume on the SP contract. You'd be better off looking at ES volume which is where all the liquidity is. Pit noise is not going to give you some secret, magical "edge" which other traders haven't discovered.

Share this post


Link to post
Share on other sites
Guest cooter
I may be able to send you a special discount offer from my former vendor.

 

[snip]

 

If you have any questions, post them here. I will be glad to answer any questions. :)

 

Sure. You say "former" vendor. Could you expound on that for the benefit of forum members?

Share this post


Link to post
Share on other sites

Cooter, I didn't find that at all useful. Merrill might sell 200 and the price may go up or down or nowhere. You definitely couldn't trade off of that. Merrill selling a few hundred here or there makes no difference. All the volume is on ES where it's not unusual to see several trades of 500 or more coming through every second.

Share this post


Link to post
Share on other sites

Again its horses for courses, whatever floats your boat. I love the pit noise and like to know when the pit is getting frantic and when it is quiet. I don't use it to trade from at all, but it gives me another sense in trading. For example if, off the open large institutions are on the bid and offer, it usually ends up being a choppy day, there are several things like that you can pick up on. Some people hate it and find it annoying, but I wouldn't trade without it now.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • Well said. This principle is highly analogous to trading. Any human can easily click buy or sell when they "feel" that price is about to go up or down. The problem with feeling, commonly referred to as "instinctive" trading, is that it cannot be quantified. And because it cannot be quantified, it cannot be empirically tested. Instinctive trading has the lowest barrier to entry and therefore returns the lowest reward. As this is true for most things in life, this comes as no surprise. Unfortunately, the lowest barrier to entry is attractive to new traders for obvious reasons. This actually applied to me decades ago.🤭   It's only human nature to seek the highest amount of reward in exchange for the lowest amount of work. In fact, I often say that there is massive gray area between efficiency and laziness. Fortunately, losing for a living inspired me to investigate the work of Wall Street quants who refer to us as "fishfood" or "cannonfodder." Although I knew that we as retail traders cannot exploit execution rebates or queues like quants do, I learned that we can engage in automated scalp, swing, and trend trading. The thermonuclear caveat here, is that I had no idea how to write code (or program) trading algorithms. So I gravitated toward interface-based algorithm builders that required no coding knowledge (see human nature, aforementioned). In retrospect, I should never have traded code written by builder software because it's buggy and inefficient. However, my paid subscription to the builder software allowed me to view the underlying source code of the generated trading algo--which was written in MQL language. Due to a lack of customization in the builder software, I inevitably found myself editing the code. This led me to coding research which, in turn, led me to abandoning the builder software and coding custom algo's from scratch. Fast forward to the present, I can now code several trading strategies per day across 2 different platforms. Considering how inefficient manual backtesting is, coding is a huge advantage. When a new trading concept hits me, I can write the algo, backtest it, and optimize it within an hour or so--across multiple exchanges and symbols, and cycle through hundreds of different settings for each input. And then I get pages upon pages of performance metrics with the best settings pre-highlighted. Having said all of this, I am by no means an advanced programmer. IMHO, advanced programmers write API gateways, construct their own custom trading platforms, use high end computers with field programmable gateway array chips, and set up shop in close proximity to the exchanges. In any event, a considerable amount of work is required just to get toward the top of the "fishfood"/"cannonfodder" pool. Another advantage of coding is that it forces me to write trade entry and exit conditions (triggers) in black & white, thereby causing me to think microscopically about my precise trade trigger conditions. For example, I have to decide whether the algo should track the slope, angle, and level of each bar price and indicator to be used. Typing a hard number like 50 degrees of angle into code is a lot different than merely looking at a chart myself and saying, that's close enough.  Code doesn't acknowledge "maybe" nor "feelings." Either the math (code) works (is profitable) or doesn't work (is a loser). It doesn't get angry, sad, nor overly optimistic. And it can trade virtually 24 hours per day, 5 days per week. If you learn to code, you'll eventually reach a point where coding an algo that trades as you intended provides its own sense of accomplishment. Soon after, making money in the market merely becomes a side effect of your new job--coding. This is how I compete, at least for now, in this wide world of trading. I highly recommend it.  
    • VRA Vera Bradley stock watch, pull back to 5.08 support area at https://stockconsultant.com/?VRA
    • MU Micron stock watch, pull back to 102.83 gap support area with high trade quality at https://stockconsultant.com/?MU
    • ACLX Arcellx stock watch, trending at 84.6 support area with bullish indicators at https://stockconsultant.com/?ACLX
    • Here’s something few are talking about: The Chinese are printing money like it's going out of style. Not that you'd hear about it in the mainstream news. But Bitcoin knows.   Bitcoin always knows.   Here’s the thing…   When the Chinese government prints money to paper over the cracks, their smart money doesn't sit around waiting to get devalued.   It usually flows into three things: Bitcoin, gold, and dollars.   After years of being beaten down, gold's having one of its best years in decades. But here's the secret -- whatever gold does, Bitcoin's going to do it bigger.   Much bigger.   Since last November, when China started their printing spree, Bitcoin's been moving in near-perfect correlation with the People's Bank of China's balance sheet. Over 80% correlation, maybe even 90%.   Again, few are talking about it.   But here's why this matters right now: This could be the beginning of a huge breakout in the crypto markets.   Bitcoin broke above its July high, and historically, that's led to new all-time highs over 90% of the time. The only times it failed? COVID and the 2022 bear market.   That's it.” – Chris Campbell   Profits from free accurate cryptos signals: https://www.predictmag.com/     
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.