Pit Noise: Trading with an Edge

[Soultrader 12]

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.

[Keys 10]

Do you have any recommendations on where I can obtain pit noise? Also, what is the cost of this? Thank you

[Labcast 10]

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.

[Jesse 10]

Could I also receive some info on pit audio? Thank you

[boze 10]

Same here as well. Thanks

[rolange 10]

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

[Soultrader 12]

Traders Audio is probably the best one. Alot of day traders I know rely on it including myself.

[rolange 10]

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

[Soultrader 12]

I gotta say I love Ben who is the speaker for Traders Audio so I dont mind the commentary at all.

[keymoo 10]

I get

 

Page not found

 

When clicking on the link to the glossary. Does it need to be updated? Thanks.

[Soultrader 12]

Its working fine for me here: http://www.traderslaboratory.com/forums/f34/glossary-trading-pit-terms-170.html

 

Try again keymoo.

[TinGull 10]

http://www.traderslaboratory.com/forums/technical-trading/170-glossary-trading-pit-terms.html

 

that link which was posted in the first post is dead for me too. The second link works fine that you just posted.

 

Thanks James!

[nasdaq5048 10]

There is a discount link for Tradersaudio. PM me if you are interested.

[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?

[notouch 10]

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.

[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.

[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?

[notouch 10]

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.

[keymoo 10]

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.

[Soultrader 12]

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

 

Cooter, can you pm me? I can send you a discount link.

[bakrob99 11]

I wouldn't trade without it now.

 

I agree - Pit noise level and changes in volume levels are useful tools.

[james_gsx 16]

The traders audio link doesn't work for me, I even searched for it on Google and it still didn't work. Did the address change?

[Soultrader 12]

The traders audio link doesn't work for me, I even searched for it on Google and it still didn't work. Did the address change?

 

Their server is down. Check back in a few hours.

[james_gsx 16]

I signed up for the trial, I'll try it out hopefully today.

[keymoo 10]

Hi James it might take you a few weeks to get into it. Persevere with it for a couple of months.