by Jayanthi Gopalakrishnan
Alan Knuckman currently serves as the president and developer of GlobalTec's Commodity Explorer product line. In this capacity, he oversees all aspects of the decision support software, direct-access trading platform, educational training, and support. He is the expert on the daily Future Focus and Market Wrap programs on Wizetrade TV. Knuckman also is a frequent guest during CommoditiesTalk Live training broadcasts, where he answers in-the-market questions for traders. As an instructor, he also travels around the country training software users.Technical Analysis of STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan conducted a phone interview with Alan Knuckman on January 8, 2007.
The electronic revolution in the last three to five years has really achieved more market change than we saw in the last 30 or 50.
Alan, how did you get interested in trading?
I was always interested in the financial markets -- I traded stocks as a teenager in high school and then college. After school I moved to Chicago and while I was trying to find a real job, I would wander down to the Chicago Mercantile Exchange and hang around the viewing galleries because I was interested in finance and watching the dynamics of capitalism at its finest and all that. I was "discovered" because I was down there one day when someone came off the floor and asked me if I wanted a job. I didn't realize until later that you started at $2.85 an hour and you had to work your way up. There was no formal education for trading, and I also realized I was immediately hired because I'm tall. That's an advantage in the pits, which I also didn't realize until later. But it worked out.
So did you start with commodities?
Yeah, I started on the trading floor in Chicago. I worked in the grain room and moved up and started trading in the bond room and eventually traded for myself and eventually got involved in the software. I realized that trading is trading and there aren't that many tools for the individual trader. Now with electronic trading, everyone has tools to take advantage of what the big boys have always done.
When you were on the floor, it was pretty much open outcry, right?
Yes, it was, and there was a bit of a transition from open outcry to electronic. The electronic revolution in the last three to five years has really achieved more market change than we saw in the last 30 or 50 years. Electronic trading has changed everything so much. When I was down in the pits, it was a matter of who you stood next to, what order flow you could see -- buying at the bid, selling at the ask -- that's how guys made their money. Now, everyone has to trade on their own merits and do more analysis so they can take advantage of the markets and not just because they're standing at the right place.
So what are some of the differences between the two that you've come across?
The main difference is in the volume increases. The volumes have increased exponentially. You can see every year at the Chicago Board of Trade (CBOT) and the Merc that new volume records are hit, and this benefits the trader. The guy on the floor used to be there to provide liquidity to buy the bid and sell the ask, but now, with volume the way it is, they don't need that market mechanism. Orders are matched electronically, so volume becomes a huge advantage. You can execute your trading plan and get in when you want and get out when you want because there are so many participants. More important, this increases the opportunities for everyone. Now everyone has opportunities to access the markets and everyone has tools to take advantage of it.
...Continued in the March 2007 issue of Technical Analysis
of STOCKS & COMMODITIES
Excerpted from an article originally published in the March 2006 issue
of Technical Analysis of STOCKS & COMMODITIES magazine. All rights
reserved. © Copyright 2006, Technical Analysis, Inc.
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