There is somethings i am curious about

[voidchoice]

Hello, I am attempting to learn how to trade for the second time, the first time i got wiped out. I thought it was easy. Now i know its not and am attempting to be smart about it

There is somethings i am really curious about though, these are as follows:

1. What is the goal of the MM, or the guy who sets the price? Isn't it his task to try and get the price as high as possible for the company he is representing? Or is it just to keep a steady stream of buying and selling?

2. Why do prices gap up and down over night? If the market is shut how can orders effect the price out of hours when there shouldn be any orders? This is something i really dont understand and would really like an explanation of what the cause is behind this effect. Is it just based on how the guy feels when he gets to work in the morning?

Thanks for any answers you can provide, sorry for speaking about 'him' all the time, i dont mean to be sexist

 

[thegapper]

Excellent questions and I'm sure there a alot of players who could give it a good shot answering the questions. But the truth of the matter is: It dosen't matter! We are small time traders food for the MM sharks, the big boy control the market. We just ride along. The key to being a avrege trader is don't be GREEDY, and buy enough shares to make profit on short movements.
Try and stay away from "otcb & pinks" play only Naz, this way you can control your STOPS, and always, always place stops. Other than that, pick out about 20 good stocks and get to know them, and If you don't get GREEDY you can grab some of the crumbs that MM drops off the table. Good Luck!!

Hello, I am attempting to learn how to trade for the second time, the first time i got wiped out. I thought it was easy. Now i know its not and am attempting to be smart about it

There is somethings i am really curious about though, these are as follows:

1. What is the goal of the MM, or the guy who sets the price? Isn't it his task to try and get the price as high as possible for the company he is representing? Or is it just to keep a steady stream of buying and selling?

2. Why do prices gap up and down over night? If the market is shut how can orders effect the price out of hours when there shouldn be any orders? This is something i really dont understand and would really like an explanation of what the cause is behind this effect. Is it just based on how the guy feels when he gets to work in the morning?

Thanks for any answers you can provide, sorry for speaking about 'him' all the time, i dont mean to be sexist

 

[voidchoice]

MM was the wrong choice of word because i dont actually know the correct term. A MM is like investment bankers right? the people who have the biggest effect on the price. Who i am talking about is the person actually at the stock exchange changing the price based on supply and demand. I hear about these people holding prices for a while before the change them to going in the right direction, to put small timers out of pocket. If they have the power to do this then surely they can effect the prices themselves just by being in charge of the price. If so, then what is their goal? to get the highest possible price in the long term or just to have the smallest amount of shares in their float?

Thanks.

 

[roguetrader]

It may be of assistance for you to become more familiar with some basics. Here is a textbook definition of the parties you are referring to.

Specialists working on the NYSE have four roles to fulfill in order to ensure steadily flowing markets:

1/ Auctioneer - because the NYSE is an auction market, bids and asks are competitively forwarded by investors. These bids and asks must be posted for the entire market to view such that the best price is always maintained. It is the job of the specialist to ensure that all bids and asks are reported in an accurate and timely manner, that all marketable trades are executed and that order is maintained on the floor.

2/ Agent – the specialist also accepts limit orders relayed by investors through brokers or electronic trading. It is the responsibility of the specialist to ensure that the order is transacted appropriately on behalf of others, using the same fiduciary care as the brokers themselves.


3/ Catalyst – as the specialists are in direct contact with the bidders and sellers of particular securities, it is their responsibility that enough interest exists for a particular stock such that a reasonable market exists. This is carried out by specialists seeking out recently active investors in cases where the bid and asks can't be matched.


4/ Principal – in the instance where a market imbalance occurs between the demand and supply of a certain security, the specialist must make adjustments by purchasing and selling out of his/her own inventory to equalize the market.


Market makers working on the Nasdaq exchange are actually not at the exchange. Rather, they are large investment companies that participate in the purchase and sale of actual securities. These market makers maintain inventories and buy and sell stocks from their personal inventories to individual customers and other dealers.


Each security on the Nasdaq market generally has more than one market maker, and open displays of competition among them facilitates competitive prices; as a result, individual investors generally will get the best price. As this competition is evident in the limited spreads between posted bids and asks, the market makers on the Nasdaq will in some instances act very much like the specialists on the NYSE.

So, what's the main difference between a specialist and a market maker? Not much anymore.

 

[Canadian]

Hello, I am attempting to learn how to trade for the second time, the first time i got wiped out. I thought it was easy. Now i know its not and am attempting to be smart about it

To trade what? Currencies, stocks, options, futures, commodities, indices... please be more specific.