One of a series of interviews with traders who use CQG Integrated Client, this interview is with Robin Mesch, President of Robin Mesch Associates and Mesch Capital Management. Ms. Mesch is a nationally acclaimed market strategist, pioneer, and educator. She has been building breakthrough market models for more than twenty-five years in the field of technical analysis and market theory. She has developed a distinct body of market analytics and proprietary trading methodologies. Her advice and market strategies are incorporated into financial portfolios by some of the leading investment firms and trading houses.
During this interview, Ms. Mesch discusses CQG and the CQG API. The goal of these interviews is to illustrate why traders who begin using CQG tend to continue using CQG.
Q: What is your history of the early days and the markets?
A: While I was a student at Brown University, I decided to take a year off from college and I landed an internship with a trading group. Back then we were keeping charts up by hand. I returned to school, but I retained this job with the trading group.
Q: What were you studying at Brown?
A: I created my own major in the engineering department and religious studies. I was a semiotics major and I combined it with technical analysis.
Q: What is semiotics?
A: Semiotics is the study of signs and signifiers. To me, technical analysis is a language expressing the perception of the market participants. Technical analysis made complete sense to me.
Q: How did you get introduced to CQG?
A: While I was still a student, the trading group realized they needed to learn a lot more about technical analysis and trading. They sent me to a lot of educational seminars and courses.
Different market analysts were beginning to appear at that time and one of them was Peter Steidlmayer with Market Profile®* charts. They sent me to all of his courses. At that time I knew that CQG was working very close with Peter to offer the Market Profile charts in CQG. And I have to say that back then, CQG offered the best in Market Profile charting and still today, no one does it better. Along with the best in Market Profile charting, CQG offered the best market data back then. I can still say that today. We would never go anywhere else.
My task for the group was to build an expert system using Market Profile in combination with a collection of proprietary indicators I was developing.
Q: Were these indicators based on your market structure theories and Market Profile?
A: Yes. Peter was a real genius. Interestingly, he did not believe in trading plans. He always said, "Do not trade price, trade market structure." You get out when the trade changes structurally. He really laid the ground work for my theory on the markets. I developed models that were structurally based. Market Profile is really the best picture that captures the participant's perception of value. Basically, my early years were spent learning about the markets and market structure. I did not trade; I was the trade recommender.
Q: Did you expand that role of analysis and generating trade ideas?
A: Yes. I moved to Portland, Oregon and took a consulting role with Thompson. I wrote their in-house commentary and continued to develop models.
Q: What do you mean by models?
A: Early on, I abandoned the idea of looking for some trading plan or black-box buy/sell algorithmic approach that was the "Holy Grail." What was important to me was learning how to read the market. That is, read what the buy and sell order flow is doing. There are two questions to ask: what is the market trying to do and how well is it doing it?
I stopped building trading plans and focused on designing indicators that read the market based on the psychology that drives the price. Using Market-Profile-based concepts, I developed indicators, which I started licensing to institutions. Today, in addition to my indicators, I do portfolio consulting supporting the process of stock selection.
Q: Was CQG a source for developing the indicators?
A: Yes. The CQG Formula Builder is fantastic. About fifteen years ago, we were an alpha tester for it. It has become more powerful over the years.
Q: Regarding your day-to-day workflow, how do you set up your CQG Charts?
A: I rely on the CQG Market Profile charts. Market Profile charts represent the traders' acceptance of price being fair. The bell curve graphically organizes itself based on the auction. I am a traditionalist. My time frames are very long term. I use long-term composite profiles.
Q: By long term, do you mean months?
A: Yes, or longer. In some situations I analyze the full history, especially in stocks. I will examine a two-year to a five-year period of development. Then I look at the current market in that context. I have developed my own studies based on those composites. I have automated this process. The models I have built are scanning for these long-term composite profiles. I use a top-down indicator that scans all the sectors and looks for consensus.
Q: What do you mean by consensus?
A: Let's say the stock market is making new highs, but it might be just a handful of stocks driving the market. It is important to know whether it is driven by just a couple of sectors, and within those sectors, how many stocks are participating. For example, I would look at the Financial SPDR ETF. (Editor's note: The symbol is XLF in CQG.) If it is rising, then I look at how many stocks within that ETF are participating. That is what I mean by consensus.
Q: And what else do you use CQG for?
A: Today, a lot of my clients are spreaders. Our development work was more than what CQG is designed for so we wrote DLLs and we get the data from CQG via the CQG API, as well as execute trades via the CQG API.
Q: How is all of this automated?
A: I use the CQG API for automation. I have my own software and we pull the data in from CQG. CQG has excellent people in API support. The API is fantastic. CQG has made great advances with their API, especially with the spread-trading capacities. I have a wide range of institutional customers who are very happy with CQG, and it has been a great relationship for our business.