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There is a good description of how a trade is processed,
etc after you place the order in the DayTraders section
of this chat forum, look for the topic
"Back to Basics: Outline of a retail stock order…" (3/23/98 4:19 PM)
on this chat board:-
http://www.purebytes.com/cgi-bin/pb/login.cgi
-Neal.
At 06:53 PM 3/25/98 EST, Jwtrader wrote:
>Date: Wed, 25 Mar 1998 04:27:23 -0400
>From: "A.J. Carisse" <carisse@xxxxxxxxxxx>
>To: Omega List <omega-list@xxxxxxxxxx>
>Subject: Re: Day Trading by Bob Kodama
>Message-ID: <3518BFEA.73A06F51@xxxxxxxxxxx>
>Content-Type: text/plain; charset=us-ascii
>Content-Transfer-Encoding: 7bit
>
>Ron2368 wrote:
>
>> Bob,
>>
>> Since the otc is entirely computerized
>> for trades the Level II screen will show every bid/ask on a particular
stock
>> by every broker that makes its market. From what I know the "Soes Bandits"
>use
>> this info mostly , but if you are looking for an edge on large share
lots do
>> you think this would help?
>
>A.J. Carisse wrote:
>
>>If you trade the NASDAQ, Level II is very helpful. Even more important,
>though,
>>is having a good execution system. Forget online brokers here - not only
are
>they
>>slow and unreliable, but they are selling your order flow, whereby you won't
>get
>>good fills a lot of the time. In fact, this is how most of these brokers
>make
>>their money - losing on the commission, but more than making up for it here.
>If
>>you average a trade or more a day, definitely consider getting one of the
>good
>>execution packages, which level the playing field between you and other
MM's.
>>Personally, I'd recommend CyberTrader (http://www.cyber-corp.com) - no
>>connection
>>with them, but it has it all as far as these things go, including
>capabilities for
>>trading listed stocks, and I've heard nothing but good things about it.
>
>
>A.J.,
>
> Could you give me a specific example how the Online broker sell this
>order flow and how it affect me ? I do a lot of NASDAQ trades and use online
>brokers. 95% of my orders are limit order. I am reasonably happy with the
>executions. My only complain is that they don't show my Bid or Offer when
>it's better.
> I have considered getting Level II, and CyberTrader, and MB Brokerage,
>but so far I failed to justify the added cost and how it would benefit me
with
>my system and style of trading. My understanding now is that if I had 3k
>shares to sell at the best MM Bid price, my broker would sell to all MM with
>that Bid. I can understand that he might go to his MM friend first who might
>only take 100 shares and tip off other MM to drop their Bid, whereas Level II
>would allow me to hit the MM who is Bidding 7k at that price. I have never
>had a "formal, official" explanation of the mechanic involved in the order
>flow.
> I would be happy to discuss this subject farther with you if you have
>more experience in this matter. My experience( 28 yrs) in the markets have
>forced me to be to very cynical of what I see. This has served me very well
>in the markets. In fact, the system that I trade is predicated on reading
the
>"true picture" of the tape.
>I pick a technically good looking stock then I "read the tape" by watching
>them maniputed the Bid, Ask, and size. I do just the OPPOSITE of what THEY
>are trying to tell me !!!! It works !!!!! My backup system is working with
>patterns.
> Even though I am a cynic when it comes to the competition for economic
>gain, on the contrary, I am a very nice person when I am off the "trading
>arena". In fact, my first desire out of college was to join the Peace Corp,
>but at $75/ mth I could hardly help myself. I thought the markets might be a
>better place to achieve that goal. My heros are all the voluntary workers of
>the world and the "Mother Theresa"s. These people( including some people on
>this Omega list) restore my faith in humanity, and some of vendors are
>destroying that.
>
>I learned this from Linda Rashke's book:
> When you are exiting with a loss, tell yourself your are not exiting,
but
>rather
> just TRADING FOR A BETTER PRICE !!!! If you like it so much, you can
> always get back in for the price of a commission and slippage. In most
>cases,
> it'll be cheaper then hanging on.
>
>
>Thanks in advance for any feedback.
> Jim C. Wong
>
>
>
>
>
>
>
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