Market chat

I notice that one or two people on the board are interested in interactive brokers for trading US markets.I would be interested in any one who uses it mentioning how they are getting on with it.I know that their rates are very impressive and i believe their fills are quite good.But i'm not sure about their telephone back up?

I see that Ameritrade offer $8 commissions and good phone back up, they are an internet brokerage but i see that as an extra they offer Ameritrade advantage which gives level 2 and time and sales.They also offer charts as well.(Ameritrade.com)

I once checked their fills out against my screen and found them reasonably good.I noticed that their stop and limit orders were good as well.I know some people swing trade the QQQ's with this system very well.
 
I have examined Interactive in the past.. their rates are very appealing but the problem is that order entry takes a long time and is very cumbersome, so our form of trading is pretty much unworkable with Interactive. Also, they dont have Level2 and charts, so its only good for position trading, unless you subscribe to a 3rd party for the gizmos.
 
Thanks Trader Pattern.

I'm always trying to keep an open mind with my trading and trying not to be blinkered with the style that you and i adopt.Although a lot of people will smile at that.

This is why i'm always interested in how other traders might be playing US stocks.For instance if i'm working my socks off filling a 8,000 share order on NL2 and running it from one whole number to another.Does someone who has something like IB have a better chance of filling all that order in one go even if it is 10c-12c away from my fill? and getting it at very good commision rates.

I know that some longer term players take their trades this way but watch all the action on level 2 for their entries and exits.I visited a very successfull remote trader who did this, 6 months ago.Although he only played the Q's i was interested how he put it all together even if it was rather slow.

I put this interest down to just making sure if there is any extra edge out there that needs to be exploited i want to know about it and try it out.Isn't true trading about spotting oppertunities and exploiting them.If i dont get out there and look or ask questions then potential oppertunities might pass me by.

Good Luck

NAZ
 
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To me getting an edge is very important.Years ago like every one else i first saw the UK react to what the US did in the afternoon and then watch the US completely turn around in the evening when the UK was shut.

It was only when i studied important times of day on the US that i started making use of this phenomenon.If the index falls on the Nasdaq and bases over lunch the odds are it will make a break in the afternoon EST.Very often this is back in the direction it's fallen from.This phenomenon also can give the bottom of a 2/3 day fall and gives a great entry for a multi day swing play.

Finding a strong daily stock in a strong sector to play for those last couple of hours can pay off time and time again.just like last night.
Once the set up is there over lunch EST, i normaly have an hour to search for stocks.Last night for me it was QLGC.

Some people say "I work during the day can it be beneficial to trade the Nasdaq in the evening?" Just using that one tactic can pay huge dividends.However the entry,exits and continuation plays are important and i would suggest that reading the level 2 screen helps in detecting the possible moves,especialy near whole numbers.It also allows you to see any fake moves,that otherwise might shake a player out.
 
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I mentioned in the post above that "This phenomenon also can give the bottom of a 2/3 day fall and gives a great entry for a multi day swing play."

QLGC mentioned above did exactly that and the strength that it showed yesterday evening continued into today giving a move from $45 to $52 for the past day and a half.
 
Reflecting on this week.

I came back in trading this week vowing to be a little more understanding.However where as a t/a player has to talk about charts because those are the tools he uses for his job.A NL2 player must talk about his level 2 screen at some stage because those are his tools for his trading.

I had been swing trading during the week but during lunchtime friday EST things had got very slow that i went back to scalping.Now some people have said the NL2 is to fast and furious.But i put it to you that if you find the right stock that suits your personality then you can practice at that level before moving on.During the slow lunchtime period is an ideal time to practice by finding a stock that has previously shown during this period that it slowly oscillates in a small range.It must also have good ecn and mm participation at each level in order to execute trades.Hot keying some orders on the key board also alows quicker reactions.I was doing this with BRCD because i noticed it had all the participation i wanted and had done this before over lunch.

All the way to support, buy the stock.Offer it out 25c/30c away on a hidden isalnd order and look for your exit if things go wrong.Manage the loss because if the market runs up for a profit, your order will be automaticly sold.(it may also get sold on island without the overall market getting there).Reason this, why leave the stock sitting dormant in your account if you have the oppertunity to offer it out with a profit at a price that suits you.because many times people will buy away from the inside price and if your order is sitting there you will not only capture the spread you'll also capture the premium that player was willing to pay to get in the stock.Hiding it on island means you are not contributing to any resistance that can be viewed on the island book,which of course would be against the direction that you want the stock to travel.

If the market takes off strongly in your favour hit your hot key to cancel your order and manage the trade for a larger profit.Doing all this just above the whole number is great. as you know that will offer psycologic support.Try and find out who the ax is to keep an eye on him. Picking the RIGHT stock during lunchtime when things are realy slow can give good practice for a beginner and take the boredom away for others.Most players are away from their screen at this time and generaly the stock is going no where just oscillating.That is why this slow scalping with the right stock can be worth looking at. 4 slow scalps in BRCD during this time frame and you've just added an extra 3% net return to your day.

Another thing that can happen is that when players come back from lunch and want to move the stock you'll be able to see and feel the difference on your screen before other late players realise it.This can put you into an afternoon swing trade with a fantastic entry point.All you have to do then is make the stops larger to treat it as a swing and not a scalp.

Remember also that if it holds the whole number during lunch the odds are in your favour it may try and make the next whole number.If you've just been having practice at buying it just above the whole number you should get a great entry for that possible run.
 
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shorting

I get my Ameritrade Pro direct acccess account sorted out within the next week but I'm still having difficulty with short selling.

You can only short the Nasdaq on the up tick unless shorting via the Island correct? So I short sell the stock the money is paid to
me, I then have to replace the borrowed shares with stock I hopefully buy later at a discount. Say I short a thousand shares
of csco, and then later buy at a cheaper price does the stock get given back to the broker automatically? How does it work in practice on screen. Thanx guys.
 
Hi Spamula

If you want more than a couple of lines advice on the BB.please send me your telephone number to my e-mail address([email protected]) before you start trading so i can talk to you with some totaly free advice, otherwise i can see you wasting money while you learn.That also goes for any one else who just wants a chat.
 
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Re: 1000 shares

Spamula said:
Say I short a thousand shares of csco.
Click to expand...

Spamula, DON'T even consider doing 1000 shares of anything, until you are a few months down the road. If you start doing 1000 shares of stuff, you will never get to the stage of being a few months down the road. Take the advice from Naz very seriously when you speak to him; he is very experienced.
 
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shorting

mmm... I was only using 1000 shares of csco as an example
for the shorting explanation!


But if you could explain I'd really appreciate it also could you explain what swing trading is.
 
Spamula

I'm confused as to why you havent e- mailed me because with your lack of basic knowledge you realy shouldnt be trading at all.Please can i suggest that if this isnt a wind up you seriously think about not trading but get some training.This will undoubtably save you a lot of money in the long run.There is a very good Nasdaq course advertised at the back of Shares magazine this week.You are also still welcome to contact me at any time.

Good luck

Naz
 
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As a complete stranger to this board, I'm not surprised Spamula hasn't contacted you by email. Why should he ? You, I and all the other regular members here are a complete stranger to him. All he wants is a simple explanation on how shorting is accomplished in practice, not a lecture on whether or not he is competant or otherwise in engaging in investing/trading/day trading. Better to give somone what they want rather than something they don't.......
Spamula- I don't know how it works on the screen, but basically the MM will "borrow" the shares from someone . Those shares are then "sold" on your behalf and you get the money...Sometime in the future, you have to get them "bought back", hopefully at a cheaper price, hence making a profit.The MM then "returns" the shares to who they originaly belonged to. How this works in practice I have no idea...
 
The point Naz has made is essentially very helpful and Spamula would be wise to heed the advice before (s)he loses money. Trading is not to be undertaken lightly and poorly prepared traders are on the wrong side of most of my trades ;-)
There is lots of training around and advfn is good at that.
I understand Naz is the expert trainer on Nasdaq L2 and I myself do 1-2-1 emini and ftse futures training and technical analysis that works. If you're into options go to RobinT - he is the best.
To be a player in this game is not easy and most get wiped out pdq.
Be unprofessional and the pros will eat you alive.
 
Spamula,

Go ahead and open up your account... give it a whirl, and come back to this board when you have depleted your account by 50% within 2 weeks.

Maybe then you will take things more seriously and in a less frivolous way.

TP
 
Thanx Chart Man.......Jesus give a new guy a break. I also very
much appreciate the advice of Naz and Mr charts.

As for taking things more seriously and in a frivolous way I think it would be difficult for you to sound anymore patronising TraderPattern. All I asked for was an explanation nothing more nothing less, are you always this kind to new posts??? You don't even know me or know anything about me. I'm probably a little more successful in equities than you might think and I see level 2 as being key to adding a little more to my profits.

Back to the explanation..........I did actually know what shorting was its just I would have liked an explanation of how it is achieved in practice on a level 2 screen as I have never seen it done. Basically you send an order to sell short and the stock is borrowed to you, you then hope to buy back the stock at a cheaper price and pocket the difference. What I don't understand is how the broker knows you have bought the stock back, obviously the amount of stock purchased at the lower price must match the amount short sold in the first place. Is this instantly recognised by the broker?
 
Hi Spamula,
I can't comment on all US brokers, but IB the one I use assumes that if you are selling a stock through them that you haven't bought through them you are selling short. They have a huge list of stocks that you can borrow for this purpose but you don't have to check this list, the system won't allow you to short stocks that are not available to borrow i.e. your order is thrown back out. They know when you buy the stock back that this closes the short position from thier records.

Their system will not allow a short order to be executed without an uptick so your order will sit on the system waiting for an uptick before executing, this helps avoid mistakes and SEC fines.

Level 2 is not important from an admin point of view when shorting, the level 2 screen is simply a display of all the competeing quotes of market-makers and ECN's. Your broker is the your concern when shorting, the opposite side of the trade doesn't need to know you are shorting they just want delivery which will be arranged by your broker who borrows the stock on your behalf and delivers.

All the best

Steve
 
The uptick rule is relevant no matter who you are dealing with on Nasdaq or NYSE be they market-maker, ECN or speacialist.

I have been told (although i've never tried it) that in pre and after hours markets the uptick rule doesn't apply.

You can short tracking funds like QQQ (Nasdaq), SPY (S & P), which are listed on AMEX without an uptick as the rule doesn't apply.

Regards
Steve
 
Hi ChartMan

As far as I know there is no such rule.

It could be that some brokers don't allow it and those that do tighten up the margin requirements on such stocks.

I've had a look in the Nasdaq rule book and there is no mention made of stocks under $5.

Having said all that I've never tried to do it.

Regards

Steve
 
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