t/a and level 2

[Naz]

My stop is a couple of cents above this line.You should know why.
But remember i use level 2 for getting out not prints on a chart.I look for where a stock is truly trading not where one single trade goes off to give a false reading.Anyone can spoof a stock chart.Only level 2 tells you whats truly happening.

 

[ChartMan]

Ok , so what about Volume? Some say it's an important issue. I see you never post volumes on your charts.... Can I take it that you rely on L2 Time and sales to get the volume action? How does that tie up with a chart where one can reference ,say, a previous low v. volume and the current lower low v. volume? Do you remember what happend previously in Time and Sales or are you only interested in the current/recent action?

 

[Naz]

Yes i rely on time and sales for volume.

No i'm not interested in a previous low v volume against the current low v volume.I just want to see how frightened or aggressive they all are on the time and sales and see how the ax feels about it all?

If we break out on volume and he is strongly taking the opposite view maybe with the secondary ax.Then ooops! false breakout/breakdown every level 2 player will see it and we'll turn around.

Intel and Microsoft trade about 18% of the Nasdaq 100.So watching them at key periods can give an indication of where the index can go.So watching a primary and secondary ax who transact 18% of a stock at key times will give an indication of the possible next move of that stock.Where can you watch their actions at key turning points?On a level 2 screen.How do you trade with them and take advantage of the information.With direct access.

I believe if you have good t/a skills and combine it with level 2 it makes you an even better trader.Nasdaq stocks give a trader the chance to use both.

 

[Naz]

If anyone is following this trade.I'm buying back half the position to bank some profits.A guy's got to make a living and taking half off the table after a $3.30 run is worth it.The reason being we've just touched the 62% fib level in the daily charts.Risk reward on that part was about 8/1.

Just goes to show you don't need $25k account to make money trading Nasdaq stocks.That was one trade Mon-Fri a $10k account would allow you to do that.

 

[Naz]

The arrow on the chart shows the exit at 6.07pm (the time of the above post).The fib level had been hit and they were holding the pullback on the level 2 screen.

 

[Lawman]

Hi Naz

You make it look so easy!

Anyway, I am still looking for the "optimal" setup with respect to costs etc.
Also, need a new computer to handle it... so, hunting for that too now. Probably get a laptop.

Once that is all set - I can start practising... and then I think a 1-2-1 will be in order.


Cheers
Shaun

 

[Naz]

Good luck Shaun.

By the way,because we bounced i shall be working the other half purely off the level 2 screen when we open next week and forgetting any stop levels on a chart.This is where level 2 comes into play at the beginning and end of trades and those awkward times on the open or when its getting near key stop levels whilst managing a trade.

In My opinion $25k accounts for beginners lead people to over trade.$10k accounts lead them to do less trades and put t/a and level 2 together.Whilst they are managing their trades it gives them time to practice their level 2 skills by viewing the action at various turning points.

For seminar attendees last Friday where the initial set up was found and subsequent posts this might have gone some way to show how t/a and Nasdaq level 2 direct access can work together.It may also show how you can do it with a $10k account.

I hope the blue arrow on the exit combined with the time of the original exit post will go some way to prove just how important it is to become a decent level 2 player and how learning it can considerably help your trading.

(All this is just a personal view and any trading can cause anyone to loose all their capital.)

 

[Trader333]

Level II Account

I have found a broker that will allow you to trade level II with only $2K of margin and they have excellent Level II software. The margin would only allow you to trade at 2 times margin so that would be quite limiting with a $2K account bit it does show that it can be done.

For those that are not clear on the rules basically it is as follows:

With a $10K account you can make 3 day trades in 5 trading days. You can, however, make any number of overnight trades, it is just the opening and closing of a trade within the same day that is limited.

At $25K you can place any number of day trades at up to 4 times margin.

I hope this is of use,


Paul

 

[colmad]

2K

Dear Paul,

Out of interest can you tell us who the broker is?

Thanks,

Colin

 

[Trader333]

Broker

Hi Colin,

I have mailed this in a private message to you.

Cheers


Paul

 

[colmad]

Thanks

Thanks Paul,

I appreciate it.

Colin

 

[Pollux]

Paul

Thanks for the info re US brokers. One approach is to use this restricted account for limited day trading but with L2 access all thrown in while at the same time use say IB to make further trades if you need to once the limit has been reached.

Regrds
Pollux

 

[Pollux]

Re getting set up for level 2 in US:

Has anyone looked at s'ware such as esignal for US trading?
I must say I look at the bundled charting & L2 stuff that comes with a US account (I am demoing Investin at the minute) and wonder what else you get with something that can cost up to $100 a month. The direct access elite charting is quite superb although have not looked at the exptrader 10k account offering. Any one have thoughts on this??



Pollux

 

[Trader333]

L2 Trading and IB

Hi Pollux,

An interesting thought but in my view defeats the object a little. One of the advantages of L2 is knowing who you can immediately hit to be out of a trade if you need to and this would not be possible if you decide to use IB, at least I dont think so. I have emailed IB and asked if their L2 allows direct access order entry on the L2 screen and will post the reply when I get it. I have also been looking at various L2 platforms and brokers and will have decided by later this week who I will go with.

Cheers


Paul

 

[neil]

Time Out

"Never be afraid to try something new.

Remember, amateurs built the Ark and professional built the Titanic."

-- Unknown

 

[Pollux]

Paul

I take your point. However, this would be merely a pro tem solution for learning and trialing prior to a full account, ie $25k!
Who else stateside have you called re L2 s'ware. Where are you with Investin for eg?

regards

Dane

 

[Trader333]

Level II Account

Hi Dane,

I have progressed quite a few possibilites and will have decided by the end of this week which way I want to go and I have included Investin and a few others. I think a lot of this is down to personal taste which is why I am not singing the praises of anyone in particular yet. It is most likely that I will put around $15000 into an account and accept the fact that I can only have 3 day trades in 5 days. If I am successful then I will put enough into the account to be a pattern daytrader. I will still keep my IB account because I can use the datafeed for realtime Nasdaq stocks and I have already subscribed to TC2000.com and I am waiting for the CD to arrive. There is quite a lot to do but I am making progress as I hope others are as well.

Cheers


Paul

 

[Pollux]

Paul,
Sounds terrific. What are your plans re the US v UK challenge, ie doing more than mkt and time zone or are ing your options open this side of pond. Me, have rather enjoyedleaving the UK mkt for a while to focus on the US and setting up there. Also was finding the 0800 start not quite to my taste, having spent years used to gearing up for the afternoon start, and not to mention the fact of being long UK shares during day & o/n and waiting for what sort of mood the dear old Street was going to be in!
One idea we should think about is having a small group meeting similar to Helen's once things are up & running. I am in town so this may be a problem for some but worth a look. We could invite Alan and buy him lunch!! or make that breakfast (whadyasay Alan?)

 

[Trader333]

L2 Meeting

Hi Dane,

Yes a meeting would be a great idea. I, like you, have completely given up on trading the UK. I have traditionally traded the Nasdaq future, S&P Future, Dow future and and FTSE future but I am now not going to place another trade until I have given Level II a proper go.

I had mixed results trading futures, sometimes very good sometimes not so good. The only real advantage I had was that I had backtested my system to death and used very sound money management principles to trade which always helped.


Paul

 

[Naz]

For me not on a regular basis but a one off Nasdaq breakfast meeting at a Heathrow hotel might suit.Discussing ALL topics including potential set ups worth looking at. About 8.30am GMT.I've done this before at the Holiday Inn Bath Road opposite the Airport and it worked very well.The closeness of the M25, M4 and ample parking made it very easy for poeple to attend.