In This Issue

Futures Day Trading Chat Room

Using Volume at Price to Trade the Gold Market

Reports and Expiration Notices

May 3rd, 2006 — Issue #325

Futures Day Trading Chat Room

Start Day Trading the Futures with Professionals! For several years, Millennium-Traders has offered online day traders a Professional Stocks Day Trading Chat Room and weekly Swing Trades service. We now offer the same great service to Futures Day Traders! Sign up now for a 'One Week Free Trial' to our new Futures Day Trading Chat Room Moderated by Paulb-FR! See for your self how his performance rates among the highest on the Internet! Futures Day Trading Chat Room! Day Trade the Futures with the Pros! Real-time Futures Calls! Buy & Sell Alerts for E-Mini Futures! Flash Based Day Trading Futures Room! Live Futures Calls from 8:00 am until 4:00 pm ET! One Week Free Trial ALL POTENTIAL DAY TRADING ROOM MEMBERS, FREE TRIAL MEMBERS OR GENERAL SUBSCRIBERS MUST READ OUR DISCLAIMER, IN ITS ENTIRETY AND AGREE TO THE TERMS SET FORTH. DAY TRADING or Online Day Trading CAN BE EXTREMELY RISKY AND IS NOT APPROPRIATE FOR EVERYONE. Our Disclaimer can be read at: www.millennium-traders.com/company/disclaimer.aspx. See website for complete service rate details. www.Millennium-Traders.com The information transmitted is intended only for the person or entity to which it is addressed and may contain confidential and/or privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon, this information by persons or entities other than the intended recipient is prohibited. If you are not the intended recipient, please delete the material from any computer. This email is provided as a source of information only and is not an offer or solicitation to buy or sell securities or derivatives of securities, nor is this information provided as investment, tax or legal advice. Not all products, securities or services described are available in all countries, and nothing within the site is an offer or solicitation to buy or sell securities, derivatives of securities, or services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The information provided on the site is obtained from sources deemed to be reliable. Millennium-Traders.Com, LLC, and its affiliated companies do not guarantee the accuracy or completeness of the information or make any warranties, express or implied, with regard to the results obtained from its use.

© COPYRIGHT 1999-2005 MILLENNIUM-TRADERS.COM, LLC ALL RIGHTS RESERVED

Trading futures and options involves the risk of loss. Please consider carefully whether futures or options are appropriate to your financial situation. Only risk capital should be used when trading futures or options. You must review customer account agreement prior to establishing an account. Investors could lose more than their initial investment. You must review customer account agreement prior to establishing an account.

Past results are not necessarily indicative of future results. The risk of loss in trading can be substantial, carefully consider the inherent risks of such an investment in light of your financial condition.

Using Volume at Price to Trade the Gold Market

By; Lisa Erdmier, President Chart-Ex

With the explosive growth of electronic trading, the market landscape has changed. The screaming voices of the traders are now numbers that flash on your computer screen in nanoseconds. You are clicking to make trades, not flashing hand signals high in the air to make them. Your computer screen is the trading pit. In the hey-day of open out cry, the landscape of the trading floor was a sea of colorful jackets, arms flying in the air giving hand signals to buy or sell, traders with red-hot sweaty faces jumping up and down, and in general, people screaming and yelling in your face. You could hear, see and feel the market dynamics. Thousands of dollars were made or lost in minutes or seconds; you saw and felt the pain or glory first hand. Darwinism theory at its best.

When I worked on the Chicago exchange floors as an account executive, I had to relay the market conditions in the trading pit to my customers: Was it busy or slow, were the locals long or short, were the big players in the pit, what houses were putting paper in and which way...You had to have thick skin, know how to push and shove to get orders filled in seconds. You kept your eyes wide open and observed all the market signals, the traders and their nuances. You had to know who the big traders were and how, when and why they tried to move the market.

I remember this one big trader on the floor who was known for getting short, pushing the market down fast and hard. When he walked into the trading pit, the sell orders would come flying in, both from the phone desks and locals, trying to get short ahead of him. Sometimes he would sell, and sometimes he would just stand there and watch the traders hang themselves by shorting the market in anticipation of him selling. He stood on the top step right in front of my phone desk, so I was able to notice that when he started to tap his right foot in a quick repetitive movement, he was getting ready to slam the market. I held my traders back from trading until I saw him tap his right foot. As soon as the foot started tapping, I started to put the sell orders in or pulled my buy orders. Believe it or not, just waiting for the confirmation of the foot tapping often made or saved my customers a lot of money. Every little edge a trader gets is an advantage.

Another nuance that I observed when working on the trading floor, was from one broker that held a large deck. The "big brokers" got the paper from the trading houses that would move the market and set the trend. Traders, both locals and desk, would scramble and pounce to try to enter or exit the market right behind these orders. This one big broker had a poker face; traders seldom knew what was in his deck. He would stand on the top step of the pit, watching and waiting, letting the locals and paper set up the market for him, he would know who was short/long and by how much. When the time was right his arms would go up in the air silently, and the cherry picking began. I was often able to get my traders in and out safely and profitably by noticing that this broker had a habit of rubbing his mustache seconds before he would start his order execution. Again, every little edge.

Screen based trading is in the infancy of its hey-day. The e-cbot® platform for its metal complex is achieving record volume daily. Month-to-date, 25 percent of all listed Precious Metals contracts traded in North America changed hands at the CBOT . The Gold market in the late 70's was doing a vertical ride on the upside. To get orders filled in the pit, I literally had to grab a broker's tie to get his attention. Some 20 odd years later the gold market once again has geared itself into a perpetual mode of making new daily, monthly and yearly highs. Today's dynamic electronic trading environment demands that traders have trading tools that will give them an in-depth dimensional value behind the market numbers. There are no ties to pull to make a trade, just clicks.

Data Visualization Charting Example
The CBOT Jun06 100oz. Gold contract has been making new weekly and new monthly highs. The Week vs. Day Chart-Ex Commodity Chart for the CBOT's Jun06 100oz. Gold contract confirms the weekly high volume area of 632.10 - 626.00 is giving support to the day's high volume area of 632.10 - 635.50. The comparative format display confirms that traders are reentering the market in its established high volume area /value area. In this volatile trading environment it is important to have entry/exit points established before the opening bell. With the closing price at 634.2 and the trend on the upside, the entry point would be 632.10 with the exit point of 626.00. These points were derived from using the weekly and daily high volume areas.

CHART-EX COMMODITY CHART FOR CBOT'S JUN06 100OZ. GOLD WEEK VS. DAY

Being a perpetual student of technical analysis I developed a data visualization tool that displays volume at price in a comparative format; Chart-Ex Commodity Charts at www.chart-ex.com. This charting methodological display compares volume at price for one time frame to volume at price for a different time frame. Historical cumulative volume at price data is a trading tool that displays a static volume histogram for a trading range. An absolute market number becomes dimensional when cumulative volume is compared. The main objective that I wanted to achieve in my charting trading tool was to give traders a visual picture of the dynamics behind the market numbers.

The landscape of the market place has changed but the objective of making profitable trades has remained the same. Traders say that a number is a number, but the competitive edge of hearing the noise level, seeing the panic in a trader's eye are lost a flat panel computer screen. You can't see if a trader was tapping his right foot or rubbing his mustache with his right pinkie, but you can see where traders set up their market entry/exit points.

About the Author

Lisa Erdmier is President of Chart-Ex, LLC. Chart-Ex is a web-based company that offers a new proprietary data visualization tool that displays comparative price action on a single central axis with cumulative volume at each price. The Chart-Ex display keys into the growing demand from traders and investors that want to see volume at price in one concise model. Chart-Ex's co-founders, Lisa and Doug Erdmier, each have over 25 years experience and involvement in the securities and futures markets. Lisa Erdmier began her 25-year plus involvement in commodities and equities as a technical analyst for Merrill Lynch, John Eckstein, and Discount Corporation. Doug Erdmier, a long-standing Board of Trade Member, has gained a trader's knowledge of the motivations of market players and uses this knowledge to develop trading tools that facilitate the analysis of market data. Contact Lisa with any questions regarding this strategy info@chart-ex.com.

Click on www.chart-ex.com to use the FREE trading tool that uncovers the dynamics of the market's momentum by offering Market numbers and Volume at price.

Disclaimer:

Trading commodity futures and options involves substantial risk of loss. The recommendations contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results. This is not a solicitation of any order to buy or sell, but a current futures market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!

Economic Reports and Expiration Notices

Source: Moore Research Center, Inc.

* Please note that the information contained in this letter is intended for clients, prospective clients, and audiences who have a basic understanding, familiarity, and interest in the futures markets.

** The material contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results.

*** This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!