Market chat

[Spamula]

After hours/ pre market

When trading pre market/after hours there is no main market maker just people offering and selling. Say you wanted 1000
jnpr for example you set a limit on the price you want to pay and see if you can get a fill. What if the price is correct but only 500 jnpr are available at that price do you have to take that amount or can you refuse.

Can someone please explain how After hours/ pre market orders are achived via an ECN

Regards to all!

 

[flea]

Spam, You just choose your ECN and place your limit order.

As far as I know min size orders can't be left on the order book, some one may correct me on this but i've never heard of it. Still 500 out of 1000 JNPR isn't too ropey 23 out of 1000 is.

By the way it is highly adviseable to put price limits on pre/after hours trading, my broker won't accept orders out of hours any other way.

Have a look at Alan Farley's site there is an excellent page for ECN order routing

http://www.hardrightedge.com/work/orderrouting.htm

Regards

Steve

 

[Spamula]

So can you refuse the 23 jnpr shares or do you have to take them
even though you wanted to buy 1000 originally?

Thanks again Flea!

 

[flea]

As I see it I'm afraid you'd have to take the 23 shares.

There may be someone who knows a way around this but I don't know what it is.

I believe you can use an "all or none order" when using selectnet and preferencing a market maker but this can only be done during market hours.

Have a look at Alan Farleys' site, there is a lot more detail there

Regards

Steve

 

[Naz]

First of all any new trader to the Nasdaq is ill advised to trade pre and post market on an ECN becuase the liquidity isnt there and its not as easy to manage your trade.The most liquid ECN is probably Island and i would suggest its worth getting used to using it during market hours first.

If you want to trade the island book pre or post market i suggest that first you work out your stratergy and then see if your stop is attainable should things go wrong.

Next i suggest that you become an expert at reading the island book and become like a panther in watching,waiting and hiding in order to get your fills.

I said hiding becuase island offer hidden island orders,is your software offering them?because the majority dont and it can be another little edge in your armoury.

Next you need to decide on which side of the book you wish to deal, the bid or ask.If you wish to take your trade on the ask,set your trade up and sweep the book as some one comes in and closes the spread,keep looking and watching getting into sync with the flow.

So maybe you want to save the spread (which can be worth doing in after hours trading) and want to buy on the bid.Now it all depends on the liquidity as to what your plans are.But if its slow check out what the moves are first and then hide your order $.004 above the price you want to get filled at.Why, because otherwise you will be in a queue at that price and everyone else will get filled before you.Doing this puts you at the front of the queue and its hidden so no one can see you. If you showed your order then players might jump infront of you giving you less time to fill your order.Why .004 because there might be another hidden order there and you've just jumped infront of him.

So now someone out there wants to sell some stock and the order routes to you first.If you want to buy a 1000 shares this way, on the bid, then you will only get filled for the amount that player wishes to sell. If its 1000 great, if its 23 then so be it.All the time you're best bid, orders are routed to you and your 1000 share order will get filled.At any time you can hit your hot key and cancel whats left of your order and work with what you've got.Check with your broker on fees for fills and the timing limits for partial fills.

Remember anyone astute enough in that queue can look at the time and sales and realise after the event that someone was hiding and got a fill.Will he then increase his bid and move above you.If he or anyone else does, orders will route to them first and your order flow will dry up.What is your plan then? If you are partialy filled for 23 shares whats your plan for that?

Remember that this is direct access,you can now operate like a market maker and cut down on your costs with better fills.But you have to think slightly differently. I would suggest that working the island book with a SMALL number of shares in the first instance in a liquid environment and getting proficient with it, making quick decisions and reading the screen would help in the initial stages.I also advise sitting with some one who trades level 2 Nasdaq in the first instance to learn how to work your order for better fills and to also save making those first costly mistakes through lack of knowledge.

 

[Naz]

I'm as bad as anyone at looking at charts and thinking to myself about where the Nasdaq might run to.But my profits long ago always told me to look at reality on my screens and totaly discard my feelings.

It is always difficult to make predictions in any news medium about where you think the market might go.Great if you get things right,a little sheepish if things go wrong.

On TV they are constantly trying to get you to put your head on the block and do this.I long ago in my trading realised there is no holy grail,however people always seem to want some kind of prediction of what might happen.

You are going to hate me for this,but it always makes me smile how technical analysists always have an opinion after the event about why the market did this or that.There is always something in their armoury that will lend credence to why something didnt perform as it should have done.But this always happens afterwards when any chance of a profit has gone.

I didnt think the market was going to sell off like it did yesterday.Indeed i thought it was going rise,all day i thought it would bounce.However i was by chance trading a system that completely took away my independence and made me trade like a robot.Many times during the day i thought the bounce would come and my trading colleague tried for these,i winced and traded my plan which was totaly against my inner most feelings.At the end of the day i had been short from 10 o'clock and captured almost the whole of the days run whilst he and i had chatted he had managed only part of the day's run by letting his feelings come into play.

Yesterday showed me yet again how important it is to trade what you see with some kind of plan rather than how you feel.

 

[neil]

DOW

I agree with NAZ that you have to trade what you see. However, my approach is different, I use TA in multi time frames. It showed the Dow going down so I followed it and shorted Bank of America because of same reason plus its exposure to Enron.

I don't know what will happen today until the off.

Reading a book by Larry Williams who makes use of price action and limited use of TA. He is a great promotor but reading thus far he makes sense to me ( a maturing novice.)

Finally, if anyone who has read William's book could you explain to me, via graphs, how his "smash" longs/short entries work ?

 

[Naz]

just out of interest i thought i'd just post this image of a 2day island which has appeared on the Nasdaq.

 

[tjbw]

Very interesting.

So Nasdaq would be expected to fall. But will it?

Barry

 

[Reggy]

Just wanted to say..what a great thread! ... Quite a few parts i did not understand because i am not at that stage of trading yet but still picked up some great nuggets of information and i always like to hear peoples different trading strategies.

Its great to know that different styles work....my personal opinion at this moment (dont forget im only learning!) is that the traders mindset is the most important part with a healthy basic understanding of TA. I dont know if i will ever fully understand everything to do with TA but allready have grasped the basics thanks to Chartman, Skim and others on this board and from this i did my first proper (non-paper) trades on the Dow yesterday and made 17 points. I only lost on 1 out of the 4 trades and this was trying to second guess the market but because i now have the discipline to enforce stop-losses i still ended the day on a profit. SL has been my achilees heel for the last 4years day-trading.

May i just add one thing about stop-losses which i have found very VERY important....... I have found that enforcing a stop-loss has more benefit than the obvious! It now enables me to trade more freely knowing that i have total confidence in executing my stop-loss, its giving me more confidence to trade.

Sorry for my rambling on and no doubt bad grammer, thanks for a great post.

Reg

 

[Naz]

Just to let you know whats happening on the Nasdaq

 

[Naz]

The Nasdaq dosnt do anything with out some MAJOR contribution from the $sox(chart below).Just look at the second day of the 2 day island, the Nasdaq 100 and the Nasdaq comp both took out the previous days high but the sox was weak and wouldnt participate,you could argue that it was telling you something.At the moment the $sox has just had a 50% retracement from its last leg up so you could argue that it is now due for another leg up.But sitting omniously is that 2 day island which is a key reversal pattern.So a trader you could say has a 50% chance of getting it right.Tier 1 (semi conductor) general, Intel (INTC) could be worth watching at important times, no finer place would be on its level 2 screen where the true story may unfold.At least you will see it as it happens and of course this may well give you a huge advantage over other traders who dont have this facility.Or dont know how to use it.Of course this is just a personal view.

 

[Naz]

Following on from the above post here is the chart of tier 1 general INTEL (INTC) from the begining of the Nasdaq island. I've said before how its great to play trades off whole numbers on Nasdaq stocks.level 2 screens give you a ring side seat of the action and direct access allow you brilliant entries.Notice the important times are 2nd day of the island where INTC cant take out $34 properly while the comp is zooming away taking out its previous days high.Next day it would be obvious before any chart showed it that the short was at $33.Following on to the next day INTC couldnt take out $32 that was where your short was.Intel is a beginners level 2 stock with bags of liquidity and a slow ponderous giant but it would have given anyone an eye on the $sox and the general market and the ability to get great risk/reward trades at important times.If t/a guys on the Nasdaq are not quite sure about where the overall market is going at important times it might be just worth looking at Intel on a level 2 screen and understand how the story is unfolding.Of course this is just a personal view.

 

[Naz]

Another island,a lower high and a break of support on the Nasdaq.Another case of trade what you see not what you think.

 

[dojistar]

Nasdaq Level 2 Trainning

After reading all the posts on Trade2win I just couldnt resist doing Alans 1 to 1 Level 2 course.When I arrived I had a chat with Alan and he went through a few important facts about Level 2,we then started to look at the Level 2 screen and he was showing me all the different orders and he came across a share called Affymetrix,he picked it up on the section showing the highest/lowest change for the day,it had tanked on the open, Alan then looked at his Level 2 screen after he had worked out the axe was Lehman he could see a story unfolding on the Level 2 screen,the Level 2 screen was at a speed were I could also see the story unfolding as Alan explained it,the trade was on the long side and he used a scalpers entry which makes your initial risk very low therefore making a good risk to reward ratio,Goldman Sachs wasnt involved in the action while the trade was heading up but the second Goldman became a seller Lehman backed off and Alan was out of the trade,when we looked at the chart 3 or 4 minutes later the exit point was timed to perfection but by using a chart you would have missed the exit by a country mile and then if you had been spread betting you would have actually lost money.The trade was about 15 minutes in duration and netted $325.00.It was amazing to watch,I have been trading the UK market with CFD'S and I felt like a caveman after watching Alan trading the Nasdaq with Level 2 direct access and that isnt an exaggeration.I recommend learning Nasdaq Level 2 direct access even if your trading is very profitable with charts because once you have learnt the skill your trading can only become more profitable.Another good point is that the Nasdaq is the main market so you dont have to be looking over your shoulder at other markets and if you have a full time job you can still trade in the evening for a few hours.One last point Goldman Sachs wasnt looking at his Stochastics or Macd when he became a seller,so enough said on the T.A front. A fascinating day and a real eye opener.

 

[Naz]

Were getting down to an important support level on the sox.This is where swing traders should be looking at their Nasdaq level 2 screens in their favourite semiconductor stocks.Only the action there will tell the story of what's realy happening.Yes its also the 50% fib retracement of the last major leg up as well.

 

[ChartMan]

What happened to the sox breakout chart?

 

[Naz]

The sox started this massive move up on the Nasdaq and indeed broke a major trend line in the daily charts.It was then the first to show weakness at the top when the Nasdaq made its island.In fact you can argue that that was the catalyst for the Nasdaq to start falling.When everyone was bullish on the Dow and S&P in the end they followed the Nasdaq and therefore the sox down.Now the sox is at a support level and a 50% retracement wouldnt be wise just to cast an eye on what the sox is doing if its arguably had such an indirect impact on the indices just lately?
Of course it may just fizzle out and be a damp squib but then maybe it wont.Who knows?

 

[Naz]

I just thought i'd post this.
Medi sets its self up for a potential fall on the daily charts using t/a by breaking the trend line shown.The intraday chart is shown below.

 

[Naz]

Now from the daily chart above,i attach the intraday chart of that trend line break over the last few days.Notice how the whole numbers areas are very important and are used as support and resistance levels.These are the areas where even a swing trader might like to be looking at his level 2 Nasdaq screen to understand what is happening in the stock and if its showing strength or weakness.As a short term day trader this is where i enjoy taking my trades and running them from one whole number to the next.
For those that analyze Nasdaq sectors.Yes for me it was a potential weak stock in a weak sector which made itself a candidate for watching.

Naz (Alan)