Market chat

[stone]

Well said flea, I agree entirely. If we all used this board to peddle our wares the site would become a shambles.
If Naz cannot afford to pay to advertise like others, it does not say a lot for his trading system. Perhaps the need to increase his income is the reason he sells his so called skills to others.
And yes I have attended one of his seminars and I must say I was very unimpressed. If you want to make real money his system is only playing at it.

 

[Sharky]

Just to set the record straight...

(Well perhaps I should draw up a formal list of rules and guidelines to using the boards specific to this site.. but here goes a rough outline)

These boards are provided as an open forum for the exchanging of ideas so that we can learn from each others methodologies and hopefully improve our own trading skills. Freedom of speech is paramount.

OK, so what aren't they provided for? Well, racist/sexist/prejudiced comments of any kind are obviously not welcome. Any such comments will be removed and if it warrants it members accounts suspended and/or banned.. Also we don't want posts that ramp shares or attempt to mislead for personal gain. This of course is all common sense, and should be the way that any self respecting bulletin board should be run.

Self-promotion is a fairly subjective subject and is one that should be considered in light of all the facts. There are two extremes, one is blatant spamming, someone probably on their first post, posts an advert probably on one of the main trading forums, for a service or product that they themselves offer and will profit from, and probably without an adequate discussion of why you or anyone else would really benefit from it. In this situation it would be intrusive, off topic and fair to say, unwanted - and therefore will not be tolerated on this board.

On the other extreme, you would have someone who makes a real and valuable contribution to the bulletin board, who might even promote it amongst their peers or even to a wider audience, and who offers their product/services for those who wish to learn more within the context of discussing their methodology, and which others may genuinely benefit from. In this scenario, I think you would have to agree that, such an offer of service/product is valid and welcomed.

On the first point that flea made of paying for the promotion of teaching services. I am grateful to flea and anyone else who has the interests of myself and those of T2W in mind. But if you really do believe that someone has overstepped the mark as outlined above, then I would urge you to please email me privately and I promise to deal with the matter fairly and promptly. Because a) There may be circumstances only I am aware of, and b) It ensures that the boards are kept on topic and to a high standard.

Like many others I could mention, Naz has made a fantastic contribution to the boards, and has been a great advocate of the website, not only amongst his peers - but even on CNBC and the training seminars he gives. As a consequence a lot more people have discovered the T2W community and that is great news for everyone, because with more people contributing we can only hope to benefit even more from the site. In addition members who have attended his course have posted some very positive feedback, so it would be foolish of me to make any attempt to stop others from possibly benefiting too. With this in mind I think you would agree that the value-added is a lot more than an advertisers fee, and in this context is more than welcome.

Hopefully we can get back to discussing the markets, which is the title of this thread.

Sharky.

 

[Mr. Charts]

Naz - thanks for your continued quality imput.
I have never been on a course - I've always taught myself - but if I'd ever chosen one course to go on, it would have been your
1-2-1 as your experience and knowledge of nas L2 is valuable and not easily learned otherwise. Also from what I've heard your teaching is very good so I'm a little surprised to see the previous comment. However we all have our opinions and what matters is that we respect one another and perhaps think long and hard before making critical comments likely to create an unpleasant atmosphere on these boards.
I teach people 1-2-1 mainly on word of mouth rather than advertising or promotion, but if Naz chooses to do otherwise, I certainly don't object. It's no big deal anyway and we all need to tolerate one another, so why not? I'm sure Naz has helped a lot of people become better traders and deserves reward and appreciation.
On the days when I teach I make less money than when I trade, but do it because it is very satisfying making people better traders, gets me out and makes an enjoyable change. I wouldn't be surprised if Naz feels similarly, but I've never spoken to him so I'm only guessing.
If the board owners have a problem, that's up to them, but let's keep this place sweet and free from animosity - please.

 

[Naz]

Sorry if i upset anyone,so i 've removed the post with my e-mail address on it.Thanks to Sharky and Mr charts for their kind words.Also from the founder of ADVFN who got in touch to say how much he liked the market chat thread and the board.

I agree with Mr charts about teaching 121,you do it for a break and not for the money,plus the fact that if you talk about this style of trading people say "OK, so how can i learn without going to the US",so you end up offering to show them.Afterwards its up to them how much further they take it.

Nasdaq level 2 direct access is not a system it is the way that approx 30% of the US trade Nasdaq stocks.If it is your intent on trading that market it makes sense to understand what is realy going on.I have said before that its not for everyone, but learning how it works can give traders huge advantages if they are prepared to work at it.Like a young trader i taught who picked it up realy quickly, had a drink with myself and 2/3 T2W members last year and had just made $100,000 in six weeks.Or two southern based Nasdaq traders who incorporated it into their style of trading and boosted their trading profits by 40%.Or the trader who came over from southern Spain and saved thousands just by using it as a trading platform, saving the huge costs that he was currently paying his continental broker.They all benefited from it, but used it in entirely different ways.

Now its back to the markets and i just thought a few people might like to have a look at this island thats appeared on the software sector in the US.

 

[spoon102]

level 2

Naz,

I am interested in your style of trading.

I too trade Nasdaq stocks using level 2 and direct access trading (just set up an account with IB after finding out D4F spread betting US is a waste of time).

Can you tell me whether you use level 2 in conjunction with TA or purely level 2 trading. My experience is that market makers will do everything possible to hide their true intentions (dealing via ECN's whilst appearing on level 2). I understand that when the volume is high i.e. at the open and near close their appearance on level 2 become more reliable.

I use level 2 to see who's closing the spread (bid side or ask side) and sometimes which MM's appears to be the axe. For example, if an MM is sitting at either bid or ask and refreshing after being hit then I take notice.

I do think to some extent you can get a feel for the ebbs and flows in the market. However, I would not feel comfortable trading without charts. Do you look at say S&P futures or tick when you are trading? Do you tend to scalp or capture directional moves when using level 2?

 

[Naz]

Hi Spoon,

I was going to give it a rest for a while because i thought i was pushing its advantages a bit too much and maybe some traders on the board were finding it a little hard to grasp its usefulness.

At heart i'm an out and out scalper who likes nothing better than taking 25c runs with 12c stops,shadowing the ax,playing chess on the screen with fast stocks,hiding my orders and having fun whilst trading.

However since these stocks have fallen so much the movements are not so extreme as i remember them so it makes scalping harder,so now i use the skills to swing the stocks(or as you say capture large directional moves), using scalpers entry,exit and management skills.

I always find the setups by looking at a chart.But after that who needs one because all the information is on the level 2 screen and you will be behind the action by looking at a chart.You are correct when you say that when the volume is high in the morning and later in the afternoon, that there are less fake outs.The best thing then is dont trade over the lunch time period.

I'm always watching the ax and the major players on the screen and will colour an interesting mm in a different colour so i can watch his moves across the screen.I dont look at the tick, trin,noodles or spoo's Once i'm in, i trade what i see on the L2 screen not what i think by looking at any chart.Because with direct access the orders you will execute against are there in front of you, no where else.Anyway the players will react for you if there is a major move on the futures.Many times a single trade will go off slightly out of the market and this will cause the chart to jump leading a chart trader to think the market is going up when infact the players are backing off and we're going down.The only reason i'll look away from the screen is if there is a news event that's just affected the market.However if i've run a position and its nicely in the money and i can afford a decent stop,i'll use the software to put in a trailing stop and go and have a break hoping i still own it when i come back and look for an extra run later in the day.

Learning how to play the screen is an evolving thing over time which makes it difficult for some to stay the course and i'm glad to see from your post that you have come a long way down the road in being astute enough to see its advantages and how to play it.Everyone uses it slightly differently and there is no right or wrong way if its making money for you.Either by letting you use your normal trading skills on a level playing field with the mm's,playing chess on the screen with the L2 players or by saving thousands in execution costs and spreads. There is also no reason at all why someone shouldnt use it in conjunction with t/a if they feel comfortable that way.

Traders who want to get into it should start off slowly,perhaps using charts at the same time to give themselves confidence and build up their skills as they go.I'm pleased and impressed at your obvious level of skills and wish you well. Its so nice to talk to someone who has seen the benefit of trading Nasdaq stocks and is also prepared to work at his trading. Good luck.

Naz

 

[flea]

Thanks Naz

I'm sure everyone who doesn't find level 2 as useful as you will be pleased to see you imply that they are slow learners.

Incidentaly, with the introduction of Supermontage later this year those that are thinking of starting a career trading of level 2 may wish to wait and see how this affects things. For more information go to the Nasdaq home page http://www.nasdaq.com/ or try here for an explanation http://nasdaqtrader.com/trader/hottopics/smflash/smmain.stm

Regards

flea

 

[Mr. Charts]

Thanks again Naz for an interesting and informative post.
Please keep them coming

 

[Naz]

Thanks Flea,

Sometimes the written word dosnt truly convey the message meant.I was trying to convey that learning the L2 screen can take a little time whilst getting to grips with it.Some people at this stage take it no further or find its not for them.Fine.

Others want to take it further and carry on to become more profficient.Fine.It took me a while to get the hang of it.Now i wouldnt be with out it.

Thanks for pointing out super montage.The Nasdaq constanly improves its service to its users.This means that every year they always improve their service.Weve already had the introduction of super soes and decimalisation.

When decimalisation came in we were so used to using fractions we thought it would be the end of the world.Infact it tightened the spreads even more and gave you brilliant entries on the ask.Now if you ask traders they'd never want to go back.

When super soes came out we all wondered about it, but it s executions are fantastic and now its the ideal order when getting out of a falling stock when the Ecn's have all gone.

All these refinings have been introduced without upsetting the basic workings of the screen and the Nasdaq should be applauded in their constant striving to help their customers and keep their trading platform the best in the world.

 

[TraderPattern]

Supermontage will reduce transparency (since only a limited number of tiers will be visible). However, it will possibly result in faster executions; ISLD declined to participate in SuperSOES, but has indicated that it will be participating in Supermontage. Now this is a good thing for those using charts in conjunction with Level2 for entries (especially for people like Naz who use a scalpers entry to play for bigger moves). However, for pure Level2 scalpers, the reduction in transparency is a bad thing.

 

[Naz]

Spoon

I mentioned that i would look for a set up in a chart and then forget it.A classic case was the island reversal that i posted in the software sector at the beginning of the week.It indicated that the coming trend could be down.So i'd look to short a weak stock in that sector.Now i like to keep my risk realy tight initialy then widen the trailing stop to a larger degree as i start banking profits.but i need to know exactly where the ax is playing the stock to make sure my trailing stop is a reasonable one and i can only do that by understanding what is realy going on. For me that information is on the level 2 screen.However i also want to take my trades in the blink of an eye to make sure that any risk is truely obtainable for this i need direct access.Weak stock in a weak sector, down we go and the set up chart of the island reversal posted on this thread was a good one.I enclose a chart of the sector fall.

 

[Naz]

Congratulations to any t2w member who used the island reversal on the software index to pick Verisign in the Nasdaq 100 as their weak software stock.A short on Monday at the whole number ($24) would have made about 25% in 3 days.Notice how all the way down whole numbers needed to be watched carefully otherwise you would have been frightened out.For that you realy needed to know what was going on in the stock. Dare i say it ,with a level 2 screen.

 

[flea]

VRSN

Yes well done to anyone who shorted VRSN, but useing an island reversal in the software index wouldn't have been a legitimate reason, given it's not in that index but the Internet Index.

 

[dojistar]

Flea,99% of traders who read the marketchat thread enjoy Naz's input,I have learnt a lot from reading all his posts. When I found this website,the thing I liked most about it was the quality posts,lets keep it that way.

 

[Mr. Charts]

Tnx again Naz - good stuff as always.
I've got a long watch list today, but keep an eye on SYMC WLP JPM (also MWD MER LEH) TYC QCOM for some good intra-day moves - there should be some good swings on four of those - we shall see ;-)

 

[Mr. Charts]

Also promising for some decent trends today are
aet ek via wmb chir

 

[Naz]

Flea is technicaly correct.In the internet sector you have,Internet service providers,Internet information providers and internet software services.

I have always liked to trade verisign it as if it were a software company because it is an internet software company.

This has always worked remarkably well as i always felt it was more aligned to this index.I thank him for pointing out my technical mistake.

 

[Naz]

Find a weak stock and play it for all your worth in this falliing market.What a play VRSN was between the whole numbers in the morning EST.What a play it was all week if you were short with it.I hope you can see why some of us trade Nasdaq stocks. The stocks move! and the percentage moves can be about three times those on the Ftse.

If anyone does play Nasdaq stocks you will be at a severe disadvantage if you dont understand how to play them with a level 2 direct access screen.I'm sorry ask any true Nasdaq trader and he will tell you the same.

For instance yesterday.I'd played VRSN and i was looking for a bounce for the last few hours.Morgan stanley was the weak ax,he stayed out of play for a while and i thought if he comes in as a buyer i'm going long.After lunch he did and i went long.there was even some faking on the ask using inca,which again was positive.Up we went gradualy and i thought yes here we go back to eleven bucks.But over $10.30 Morgan stanley didnt want to know and became a seller.Strange,he wasnt faking either.So i sold out and took 20c profit.What happened the stock sold off and fell about 70c and didnt go for the bounce i was looking for.

Now more often than not the bounce occurs when a stock has sold off like this and based out over lunch.This time it didnt but using the level 2 screen told me that all was not well and with tight spreads and direct access still alowed me to come out with a profit.Where as if i hadnt fully understood what was happening i would have had to take a slight loss when the stock turned around and hit a stop on a chart.

 

[payneg01]

Hi All
Sorry to break your thread Naz !
If any-one has been wondering what Naz and other's have been talking about regarding Level 2 ( I hope I'm not the only one ).

I have just finished watching a CD- ROM sent to me by www.clickevents.com . I think they will send it to any-one if you ask for it. The best bit is it's FREE.

Good luck
Greg

 

[Naz]

Do you notice something.This thread has just posted two intermediate turning points on the Nasdaq one on 13th March and one a week ago.By doing your home work you can spot set ups to trade.Whether it be with t/a as in the case of the island reversals or by using a mixture of news and up coming results.Or by looking at whats happening in the sectors and with the tier one generals.

The world looks at this market,do your home work and it can put you ahead of the game.There is just so much info on the web that its easy enough to find.I hope many of the t2w members and readers of this thread have profited by getting short this last week.