Interview with Tom Alexander

This interview is part of a series of interviews with traders who use CQG Integrated Client. The goal of these interviews is to illustrate why traders who begin using CQG tend to continue using CQG. This interview is with Tom Alexander, who has nearly thirty years of experience in the markets and actively trades stocks, options, futures, and commodities. Mr. Alexander is a nearly-twenty-five-year CQG customer who specializes in Market Profile®* chart analysis. Today, he trades and operates Alexander Trading, a trading research, educational, and resource center for traders. 

Q: What is your history with the markets?

A: I have nearly thirty years in the industry, starting in 1985. First, I was a stock broker. I quickly realized that while I enjoyed trading, I didn't really enjoy selling. There was a seminal moment that really opened my eyes and actually defined my career.

Q: What was that moment?

A: At that time I was, as we say in the industry, "dialing and smiling." One night, I was cold-calling prospects and I came across one individual who was willing to listen to my spiel. I was making this long pitch on this one stock. He seemed interested in what I was saying and let me go through my talking points about how good this company is. When I finished talking about this stock, I asked him if I could put him down for a thousand shares. When I asked him for the order, instead of him saying, "Yes" or, "No, thanks," he said, "Why don't you buy it?" I didn't know what to say. I thought to myself, "He is right. If this is so good, then I should buy the stock." That set me off to begin trading.

Q: Did you begin trading in the stock market?

A: No. I didn't have much money, so instead of trading stocks or options on stocks, I quickly gravitated to trading OEX options. The public was very enamored with trading the OEX so the liquidity was excellent, and because this was before the market crash of '87, the options were very cheap and volatility was really low. I had the incredible misfortune of making money. 

Q: Why the misfortune of making money?

A: I say that because what I would do is if I decided I wanted to risk $1,000 on an OEX trade, I would look at expirations that were out three or four weeks away and I would pick strikes that were as far away from the current index market price as possible. Basically, I was buying lottery tickets and I hit it big when the market exploded to the upside. That was an incredibly unfortunate experience.

Q: How so?

A: I attributed that success to my skill level. Then, when the trend began to slow down but had not even reversed yet, I quickly gave all of that money back, and more. Now at that time I had a computer and I was using an options analytical program. I would enter in data by hand and then I could do more sophisticated analysis, such as determining the Greeks.

Q: Did that make you money?

A: I ended up losing more money, but in a much more complex fashion. Nevertheless, that was how I started trading. I stayed in the retail brokerage business until the early nineties, and I continued to delve deeper and deeper into trading. At that time, there was only one really good charting package and that was CQG. To date, I have been trading for twenty-eight years and I have been using CQG for twenty-four of those years. 

Q: Since there were other charting packages, what did you like about CQG?

A: I did experiment with various combinations of software and data feeds, and I was trading for myself and managing money. I realized that what I needed most was reliability. Back then, the reliability of the data was critical. You could have these outlier ticks which would wreak havoc on my charts and made me crazy. However, CQG had the ability to remove these bad ticks on the fly. I really appreciated the quality of CQG's data. It was so clean, and if a bad tick came through, it was almost immediately removed. That was the first aspect I noticed and appreciated, and I was really spoiled by CQG.

Now, there were periods where I would try another vendor thinking I would save money but the reality is, from a value and business perspective, CQG was infinitely more valuable to me. And, that is still the case today. 

Q: Have you broadened your usage of CQG?

A: I don't scratch the surface of the features available in CQG to a trader as an analytical and trading tool. It is an institutional caliber product. I use Market Profile and bar charts for my decisions. I program basic studies, and if I ever need anything programmed that requires more programming skills than I have, then CQG has product specialists who will help. For example, Product Specialists Jim Stavros and Gene O'Sullivan have always been a tremendous help to me. And I would be remiss not to mention Jo Ashton, Manager of Customer Support, and my Account Manager, Becky Gilfry, who always are there to help. I never have issues with CQG. I come into work and my charts are always there. I don't have to concern myself with the rollover in the futures markets or building charts in different time frames; CQG just always works.

I do a lot of historical research and, using CQG, I can call up markets instantly. If I do have a question or a particular unique need, CQG has unparalleled customer support. I can call customer support twenty-four-seven and have instant contact with a technical expert who will log on to my computer and walk me through and correct all issues, which are few and far between. That is not new. That has been the case ever since I have been using CQG. For me it is one less thing that I have to concern myself with as a trader. It brings me peace of mind. If you are a serious trader and are trading for a living, then you need the reliability CQG offers.

Talking about trading, I feel that the trading platform is remarkable. It is fast, intuitive, and programmable.

And one last thing: CQG is very innovative. There is a constant flow of new features and services. 

Q: Since trading off of Market Profile charts is one of your specialties, can you talk about your work with these charts?

A: Back in the '80s I, like most new traders, was searching to find the Holy Grail. I did what most new traders do: I researched studies such as oscillators and other indicators. CQG has an incredible listing of those types of studies, plus proprietary add-ons that you pay for. One day I was looking in the charts group on my CQG and I noticed the Market Profile chart type. I clicked it and my CQG indicated that this was an add-on and to contact CQG to enable it. So I called my CQG account manager and arranged a free two-week trial of Market Profile charts.

As I looked at the chart, I saw this collection of letters that traced out a sort of Gaussian bell shape. So I called CQG back and learned that this was the work of J. Peter Steidlmayer. I found it interesting, so I called Pete. He was very gracious, and over a period of a few months he talked to me about Market Profile. That started me down the road of studying this particular chart type.

Market Profile is sometimes promoted as some magical charting type and that is not what Market Profile is. It is a depiction of how an auction market forms. I use that chart and bar charts to make my trading decisions. I don't use indicators. I trade market conditions. I am interested in knowing where price is being accepted and where it is being rejected.

CQG is a great tool for using Market Profile because you can easily manipulate the charts, quickly change the time frames, and combine individual auction segments into one auction. This is a huge time saver for me. I have spent thousands of hours researching Market Profile and CQG is by far the easiest application to use it in.

* © 2013 CME. All rights reserved. 


Trading and investment carry a high level of risk, and CQG, Inc. does not make any recommendations for buying or selling any financial instruments. We offer educational information on ways to use our sophisticated CQG trading tools, but it is up to our customers and other readers to make their own trading and investment decisions or to consult with a registered investment advisor. The opinions expressed here are solely those of the author and do not reflect the opinions of CQG, Inc. or its affiliates.