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My longtime friend Brad Martin was a floor trader in the futures pits of the Chicago Board of Trade and the Chicago Mercantile Exchange for over a decade and a half.
He was a savvy guy, and he was of that rare breed that could sense changes coming. He moved off the floor and started his own day trading room in the late 1990s, just ahead of the day trading boom.
He then added real estate development to his repertoire a few years later and rode several projects (that he managed himself) all the way up to the top of the real estate bubble. Most notably, he sold a fully permitted residential development to a big housing construction conglomerate in 2007 – not a bad exit for that "trade"…
Brad's many years on the floor trading futures gave him tons of great stories – and more old "trader sayings" than you could shake a stick at.
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Brad explained that opens are when "retail" traders (non-professionals) want to get in or out of trades. This usually makes trading action quite chaotic with price bouncing all over the place.
On the other hand, it's pros who are in control of the time leading up to close as they position themselves for the end of the day, deciding whether they want to carry positions overnight or not.
And it's this same concept that gives us key insight into how the markets have "behaved" during the post-Christmas rally. Here's what I mean…
About the Author
Nationally recognized technical trader. Background in engineering, system designs, and risk reduction. 26 years in the markets.