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Jim:
Take a look at this site:
http://www.nasdaqtrader.com/dynamic/
It tells about what the mm are suppose to do.
I use limit orders also.
Either it comes to me or it does not.
Live to trade another day.
People talk about a bull markets or a bear markets.
Me, I am glad there is a market and I get to trade in it.
Good trading.
Bob
Subject:
NASDAQ, Level II worth the money ??
Date:
Wed, 25 Mar 1998 18:53:00 EST
From:
Jwtrader <Jwtrader@xxxxxxx>
To:
omega-list@xxxxxxxxxx
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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