Trader333
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JO,
The Ax is always a MM and never an ECN regardless of how much stock is transacted through the ECN. The problem is that the Ax can be a different MM at different times during the trading day. Some packages (such as esignal) have the option of displaying the number of times each MM has been at the Inside Bid and Inside Ask during the day which may give an indication as to who is controlling the stock. If you use this you must ignore the number of times any ECN has been in these positions because it will always be higher than anyone else but is not of relevance.
If you want to know who is the Ax for any stock on an ongoing basis you can get the information from this link:
http://nasdaqtrader.com/asp/TDResp....ue=QCOM&Hour_Period=1&Month=7-1-2004&x=32&y=6
And the information you get looks like the attached screenshot
For an example of Smart money it could be a case where a stock is in a consolidation phase after a sell off with narrow range bars and constant but low volume. The money is being used to accumulate the stock quietly and to effectively reduce the number of shares available in the market to trade. Once a large position has been made the owners will then "Markup" the stock and this is when you will see the prie start to increase with the close of bars being near the high of the range. Once the stock has increased sufficiently in value the Smart money will then sell at the highest possible price and this is called distribution. You will often see a price and volume spike at this stage where the "Dumb" money jump on board what they believe to be a fast moving stock and they will buy at any price. By this time the Smart money has gone and you will often see the price then collapse.
This is precisely why I dont trade based on momentum because just as the stock starts moving at its fastest is the most likely time to get hit for a large loss.
dbphoenix gives a much better explanation of this and I may well have missed out parts of what happens but I hope this helps.
Paul
The Ax is always a MM and never an ECN regardless of how much stock is transacted through the ECN. The problem is that the Ax can be a different MM at different times during the trading day. Some packages (such as esignal) have the option of displaying the number of times each MM has been at the Inside Bid and Inside Ask during the day which may give an indication as to who is controlling the stock. If you use this you must ignore the number of times any ECN has been in these positions because it will always be higher than anyone else but is not of relevance.
If you want to know who is the Ax for any stock on an ongoing basis you can get the information from this link:
http://nasdaqtrader.com/asp/TDResp....ue=QCOM&Hour_Period=1&Month=7-1-2004&x=32&y=6
And the information you get looks like the attached screenshot
For an example of Smart money it could be a case where a stock is in a consolidation phase after a sell off with narrow range bars and constant but low volume. The money is being used to accumulate the stock quietly and to effectively reduce the number of shares available in the market to trade. Once a large position has been made the owners will then "Markup" the stock and this is when you will see the prie start to increase with the close of bars being near the high of the range. Once the stock has increased sufficiently in value the Smart money will then sell at the highest possible price and this is called distribution. You will often see a price and volume spike at this stage where the "Dumb" money jump on board what they believe to be a fast moving stock and they will buy at any price. By this time the Smart money has gone and you will often see the price then collapse.
This is precisely why I dont trade based on momentum because just as the stock starts moving at its fastest is the most likely time to get hit for a large loss.
dbphoenix gives a much better explanation of this and I may well have missed out parts of what happens but I hope this helps.
Paul
