Holter, James T., Modern Trader
Change is a big part of the futures industry nowadays, but it has been part of Gino DiNuzzo's entire career. DiNuzzo once was a pure scalper. Now the 39-year-old is orchestrating a second move off floor from his spot in the Dow Jones futures pit. He hopes the move, the fourth major one in his trading career in the last five years, completes his pursuit of a careful balance of analysis and ardor.
Pointed to the Chicago Board of Trade (CBOT) by a stockbroker friend, DiNuzzo, a native of Chicago's south suburb Chicago Heights, began as a runner in Pillsbury Co.'s grain division in 1978. He soon graduated to clerk for S&W Grain. Then as soon as he was legal, DiNuzzo became a local. Just after his 21st birthday in 1980, he was scalping Treasury bond futures.
DiNuzzo says his move through the ranks would not have happened if not for trading veteran Everett Klipp. Klipp, a partner at Alpha Futures, is a well-known father figure at the CBOT who has bolstered the early success of many new traders.
"Everett taught us how to survive as traders," DiNuzzo says. "He would tell us to `Learn to love to lose money' because it's so much a part of trading."
Much of DiNuzzo's early trading was defined by five common principals he learned from Klipp: take your losses, bid the bid, offer the offer, look for one-tick profits but let your runners run. Such rules are not secrets - they basically define what thousands of floor traders do each day - but DiNuzzo says they mean nothing without the most important ingredient: discipline. Klipp demonstrated that by example.
"He stood in those pits for years and years and just bid the bid and offered the offer," DiNuzzo says. "He wasn't the most exciting trader to watch, but he was one of the most enduring."
DiNuzzo emulated Klipp for the next five years in the T-bond pit, making consistent profits but gradually questioning "Is this all there is?" In 1985 DiNuzzo, burnt out with trading, left the floor to start a telephone answering service with friends. But he soon learned that running your own company in the "real world" still doesn't match the excitement of trading, even at its most tedious. He returned to the CBOT about a year later.
Initially, DiNuzzo resumed trading the way Klipp taught him, but over the next seven years, his trading matured. He learned to trust his senses more, recognizing the pit psychology and where he expected it to move price. But, again looking for a less reactive way to trade, DiNuzzo toyed with such concepts as "scalping with a bias" off-floor, all the time maintaining his CBOT membership and frequently returning to the T-bond pit.
Then, DiNuzzo met the second key person in his trading evolution: Dan Gramza of Gramza Capital Management, who taught technical analysis at the Chicago Mercantile Exchange. …