Monday, May 25, 2009

My Ladder

The ladder is the single most important tool in my trading. If I did not know what market I was trading, did not have news sources or even a chart, I could still trade.

What I do every day is watch the price movement on the ladder. Where it moves, how much and how fast. Where the momentum speeds up, slows down, meets a resistance, bounces off, how the price reacts at certain levels.

This is a picture of my ladder and it shows several things. The prices are fixed in the middle, the bid side with blue and the offer with red are in constant motion all the time. I can also see my positions in the market and my orders queuing on the sides.

On the left side I can change my clip size, or put in stop market and stop limit orders.

This tool basically allows people to see how the fight for every tick happens and in more general how goods are priced in a free market system.

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