MasterTheGap.com welcomes: Andy from Illinois

1. How long have you been trading and what do you trade primarily? (stocks, ETFs, futures indices,commodities, etc.)

I have been day trading futures for three years, focusing on the E-mini S&P 500 futures (ES) for the last two years. Prior to that, I was a long-only “buy and hold” investor in stocks with no plays more adventurous than selling the occasional covered call. I consider myself an intermediate trader, recently upgraded from a novice.

2. How long have you been a member of MasterTheGap.com?

I began my subscription to MTG in November 2009.

3.  How long did it take for you to start having success or getting value from using MTG, and what do you value the most regarding the MTG services?

From a philosophical standpoint, the thing I value most about MTG is the transparent and objective nature of the probabilities and profit factors presented in the Gap Guides. The MTG method stands up to the scrutiny of people like me who like to take things apart to analyze and understand how they work. I have watched every archived video on the MTG web site (several hundred at least) and performed exhaustive backtesting using
self-written strategies in TradeStation. While I doubt that most members have done this, it helped me embrace the concepts and commit my trading capital.

In practice, I rely daily on the Gap Guides for objective and actionable information. The Price Guides are a good presentation of floor trader pivots and other key technical levels with color coding to show confluence areas where those levels may become more significant. In addition, I read Scott's premarket comments in “Today's Gap Plays” and am strongly influenced in my trade decisions by them. These three products have been and continue to be enormously valuable to me. As a new member, I found the live trading room to be very useful and I continue to listen in on occasion. I began producing small
but consistent profits within three months of starting my membership.

4. Can you share any of your results in terms of profitability, win rate, etc - anything that you are comfortable with and that could help provide confidence to our prospects and new members who may wonder if our historically-based methodology works.

In the ES, for the first 10 months of fading the gap, I had 25 winning trades out of 44 (57% win rate), with a net gain of 22 points per contract, or 0.50 points per contract, per trade. It is noteworthy that during this “spool-up time,” I made several changes to my strategy (which is neither advisable, nor something I'm proud to admit) and missed a number of trading days due to the demands of my job. Also, as a novice, I made numerous execution errors and several “chicken trades” where I closed out
positions for smaller wins than my plan would have achieved.

In the year ending November 2011, I made it a priority to have access to a trading platform every day at the opening bell, refined my trading plan, and followed that plan more closely. This resulted in 64 winning trades out of 98 (65% win rate) with a net gain of 123 points per contract, or 1.26 points per contract, per trade, with a 37% return on
investment. In summary, I think a novice can profit by using MTG very quickly and improve on those profits over a fairly short period of time.

5. How do you use the Gap and/or First Hour Guides at MTG? (we are looking for your high-level process: are you strictly mechanical or do you have other triggers, filters etc. that you use? )

To a large degree, my criteria for opening a position is simply to do so whenever Scott indicates in his premarket comments that he is fading the gap. I have developed rules to “veto” Scott's premarket comments in a handful of pre-defined situations. I also have a set of parameters that “wait for the heat” and fade some gaps after the opening bell by entering at a more favorable price. For the exit, my rules consider the gap size, probability of reaching extended target given gap fill, and a variety of other factors
in setting the profit target(s). Going forward, I have nearly completed extensive analysis on methods to use the Gap Guides to build criteria for finding additional “wait for the heat” entry opportunities using an optimum entry price rather than a market order. The goal of this is to identify trades where the profit opportunity meets a strict criteria for reward : risk ratio and wait for the necessary entry price if the market does not offer it at the open.

I do not act on the First Hour Guides in a live account at present.

6. Are there any other tools or services from MTG that you've used and found particularly helpful? (e.g. MTG Wizard, MTG Gap Fader, MTG Range Trader, Price Guides, Gap Studies, etc.)

I have not had occasion to use any of the additional paid services or products from MTG. However, I wrote some EasyLanguage code that mimics MTG Gap Fader for my own backtesting and have benefited enormously from the studies performed with it. While I have not done the MTG Mentorship Program, which includes MTG Gap Fader, those who want the ability to do their own backtesting without having to dive into programming (EasyLanguage did take some effort for me to learn so many years after taking Computer Science 101), the MTG Gap Fader tool and training may be a good solution.

7. Any suggestions or words of wisdom for new MTG members?

On a day-to-day basis, I would strongly recommend watching the Daily Gap Wrap video every evening – it is remarkable how much good information is presented in this completely free product. Next, I think it is a good practice to review the Gap Guides the evening before the trade to have familiarity with the next day's possible setups, (i.e. which zones have favorable numbers, the stop size – which determines my position size). This helps me visualize what to do for each zone prior to the knowledge of what the
Globex session's response is to the overseas market action, premarket news releases, etc.

From a larger scale standpoint, I recommend setting aside the time and energy to develop and articulate in writing a set of rules that define the way you'll apply the Gap Guides and other MTG information to a clearly stated trading plan. The rules in the plan should very specifically define the criteria to get in, criteria to get out, and most importantly, how much risk to take on each trade. Then commit your capital according to the rules of your trading plan, which doesn't have to be perfect nor does it have to look impressive – but it must be followed. The market rewards the disciplined and consistent by punishing those who are not.

8.  How did you get into trading?

I became interested in trading to achieve financial independence without sacrificing time with my family by working longer hours. At the start, I read various books on Elliott wave theory, momentum trading, Fibonacci retracements, etc. While I continue to be a student of technical analysis and have certainly benefited from the knowledge, nothing that I have encountered so far has been more actionable or profitable for me personally than the historical probability-based methods of MTG.

My profession before trading was and continues to be as an airline pilot. Enjoyable as that job is, it differs from trading in that compensation is inextricably linked to the time spent performing the work – a common feature of most kinds of employment.  Nevertheless, I am thankful for my career in flying, which has given me many skills, some of which apply quite well to trading.

I suspect that successful traders are proficient at all of the following, which also happen to be requirements to fly an airplane safely:

Learning procedures and establishing habits to follow them in a repeatable manner under varying circumstances:

• Assessing risk
• Recognizing threats and errors and responding appropriately
• Quickly and accurately interpreting numerical data presented graphically or in tabular format
• Making good decisions based on multiple information sources
• Being precise

9.  What's your favorite quote?

“Experience keeps a dear school, but fools will learn in no other.” – Benjamin Franklin

What this really means, in my opinion, is this: Each of us earns wisdom by paying the price for experience so that we can see our own foolishness.

10. Anything else, you'd like to share with us about you? (interests, hobbies, unique talents, awards, etc.)

I enjoy long-distance running and have trained for and completed a marathon annually for the last eight years.

(Full Disclosure: this information was submitted verbatim by the member, in return, two months was credited to their account. Email me: scott@masterthegap.com if you are interested in participating in the Member Spotlight program.)