posted
With L2's you are able to "see" the MM's and what the bid and ask are...the time that the bid and asks were placed, the buying "pressure" and a number of things...
I do not recall where I got this..but here is something that may help...also go to the thread here that is called Noobies...and start at the begining of the thread...
Since inception of live feeds, your level 2 feeds, I have found I can earn twenty to thirty percent more, on the average, than working with typical fifteen minute delay quotes.
Those serious about squeezing every penny profit possible from a stock, will run a live feed.
Market Maker participation is a critical factor. Researching the most active Market Makers will yield clues about expected behavior. An example, mentioned by Glassman, is Knight (NITE) techs.
When NITE is constantly active, that stock is being manipulated for their benefit almost always through unlawful front running. Time to buy is when NITE downticks a stock. Time to sell is the last thirty minutes of the day, a time when NITE will cash in on high bids they sat upon all day. Not often, but sometimes you can squeeze in on their action and make a higher sell. You will also discover when NITE sets the closing price, the next morning the opening price will be two to five percent higher than the close.
Etrade (ETRD) now has their own Market Maker. ETRD will almost always display a lower ask price than others. At times, good buy prices can be had from Etrade. For whatever reason, Etrade customers sell at slightly lower prices.
Volume is an important factor for live feeds.
An example is stock around a buck a share or so. Bid and ask will be 500 share lots. You might observe a lot of trades going through for far over that, 10,000 - 30,000 - 50,000 on an uptick. That is a good clue the big boys are loading up knowing an upward trend is in the making.
When trades are at that 500 or less, those are ordinary casual traders who have little effect on share value.
Recently MSSI is displaying a clue dilution is in effect. I stated recently a hundred million shares were being dumped at .03 per. This has been the case almost all this past week. It is very easy to note very large trades, high volume and a stagnant per share price. That is dilution.
A live level 2 feed is extremely important to catch intraday hard core games.
Recently ALMI took a dip from 1.00 per down to a low of .75 per in less than one hour. Best buying was below .80 per but this lasted less than fifteen minutes. For a typical web page fifteen minute delay quote, you never see this action take place; it is invisible.
ALMI went from 1.00 per to .75 per and back up in less than an hour. Those type of calculated manipulations can only be caught on a live feed.
Another obvious tool of live feeds is an ability to watch numerous stocks, simultaneously.
For true day traders, simultaneously quotes for a wide variety of sectors, is very important. This greatly increases your chances of catching a swing on one, maybe two stocks, each day.
Research each major Market Maker carefully. Come to know what tactics each employ on a regular basis. Watch for individual trade size for a clue if a stock will rise or fall, based on the big boys loading up or dumping. Pay attention to extreme volume and stagnant prices; dilution. Learn the signals of a deliberate downtick very fast to load up, followed by prices going up. Develop an ability to load your live feed with those stocks you believe will be volatile and watch all of those stocks, carefully.
Do those things and your live feed will earn you twenty to thirty pecent more profits than you would earn with a web page delayed quote.
-------------------- #1 Rule: Protect your capital! #2 Rule: Never fall for the BS on the boards! Posts: 8890 | Registered: Jan 2006
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quote:posted May 03, 2006 08:36 PM by 10of13: -------------------------------------------------------------------------------- With L2's you are able to "see" the MM's and what the bid and ask are...the time that the bid and asks were placed, the buying "pressure" and a number of things...
I do not recall where I got this..but here is something that may help...also go to the thread here that is called Noobies...and start at the begining of the thread...
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