Quick show of hands, how many of you traders out there have used or seen others try to use indicators like MACD, RSI, OBV, CCI, elliot waves, fibonacci lines, ichimoku clouds, etc? Hell, even support and resistance lines.
If your hand is down, you’re lying to yourself!
Everyone has tried them once or twice, it’s almost a right of passage at this point. Now it’s not that they don’t work, (well... most of them don’t work) but they’re not the best thing to start with for new traders. There’s simply a misunderstanding centered around what the information means.
Personally, in my 20+ year career, I’ve used a lot of tools and indicators but never found consistency trying to utilize any of these things. It wasn’t until I stumbled upon the omnipotent “Wiseguy Action Indicator” that things started to fall into place.
There’s clearly a bias on my behalf. Wiseguy action has been good to me, it’s been good to those who I teach in the Steamroom. But if it weren’t for the Wiseguy action being so consistent, none of this would be possible. And it is only through understanding that consistency can be obtained.
Simply put, you’d be hard-pressed to find another indicator that, when triggered, will instantly create momentum.
Well almost instantly. When a MACD triggers, do you see an increase of volume and momentum? Sometimes, maybe. But it pales in comparison to the instant momentum that is created off a sharp Wiseguy sweeper.
As a result, anyone using Wiseguy Activity as a realtime intra-day indicator of possible incoming momentum in a stock/etf will notice the edge immediately. Traders that expect/want more from this indicator than what it provides are the ones that fail to take advantage of it.
In the Steamroom, I tell all new members to look at the order flow as an indicator rather than get all wrapped up in the order/bet. That’s where it can lead to trouble. Personally, the way I utilize this indicator is pretty straight forward: anytime I see a Wiseguy Alert I ask myself one simple question:
“Can this alert create potential momentum in the underlying right now?”
If the answer is yes, the indicator has “triggered”.
If you’re a day trader and not utilizing this information, you’re missing out big time. Once you see it for yourself and experience the cause and effect relationship, you just can’t go back to trading blind.
Now I’m not going to get into the details on how and why this indicator works so efficiently, you can see that in the other posts.
But the quick version is this: A sharp player places an aggressive bet in the options market. Market makers have to make a market, but there are many ways for them to hedge or offset the orders they put on. And trust us, when the player or bet is sharp, market makers don’t want that risk exposure.
For example, a player sweeps upside calls. The market maker may get long the underlying to offset. That creates momentum. Then more buying.
Word starts to spread and the trade becomes more visible to other traders. While these are just some of the things that add to the layers of momentum, you can see this isn’t just some basic crossover happening behind the scenes.
For day trading, that edge right there is all you need.