10 Unique TLA Insights

 Top 10 Basic Insights Regarding the Effects on Price from Program Trading


  1. First Things First - Price is a always a function of Supply & Demand. Changes in Supply and/or Demand effect changes in Price. The futures market is no different from the the widget market or the Ice Cream market.

  2. Program Trading is the Primary Cause of changes in Supply & Demand.

  3. Buy Programs Usurp Supply - Thereby increasing price.

  4. Sell Programs Increase Supply - Thereby decreasing price.

  5. Software can monitor this activity in real-time thereby creating ongoing opportunities to follow and feast off of the Big Money just like a Pilot Fish follows and feasts off of a Shark.

  6. 'Smart Money' really does exist.  For Smart Money to profit from their insight, they must trade.  When they trade in an electronic market, their transactions get recorded in real-time.  Thus, they leave a footprint that can be, and is, monitored by custom TLA software.

  7. There are really, really sophisticated trading entities thriving in today's electronic marketplace.  They exist and thrive because the microprocessor is at the heart of today's electronic futures markets and it enables them to write algorithms to take advantage of any, and every, discrepancy in the market.

  8. Stop Losses are the bread and butter of short-term algorithmic trading shops.  They 'know' where the stops are and can fire off Program Trades with sufficient force to trigger a bucket of stops.  By doing this they create immediate liquidity which allows them to close out their positions.

  9. Today's TLA software algorithms can tell when a market is tired and needs to turn. (Find this doubtful?  Hopefully by reading this blog and you will see and digest example after example).

  10. The Forbes 400 List is wholly inaccurate.  In my opinion, If the truth be known, the Forbes 400 List would be littered with the Managing Director's of small trading enterprises that fire off thousands of trades a day using sophisticated software that is plumb smarter than the man on the street's.

  11. The easiest way to goose your returns is to add TLA algorithms to your existing Technical Analysis setups to validate that concurrent with your entry signal the dominant Program Trading is congruent with your trade.
  12. Increases in Price momentum will fade if they are not backed by substantive Program Trading