US, its not that frightening.

[Naz]

All of us that trade the US started off thinking that this was a little daunting.For me it was a new adventure where i learnt new things,new styles of trading and most of all a bit of excitement.
Here is a quick help list that might help.

1. Go to a UK bank you know and open a dollar account.Make sure their US transactions are not in Ttimbuck too and all your dealings aren't done by pony express.You want things done immediately.

2. Make sure you have got a mobile phone configured to call the States for emergency.

3. Do a course that has e-mail back up afterwards to understand exactly what your looking for in level 2 software and how to trade it.My e-mail address for that is [email protected]

4. Check out US brokers on the web and try out some trial software.

5. Before you pick a broker check out his telephone back up service.

6. Make sure your level 2 software has all the orders you need,at least 3 ECN's,premarket trading and post market trading.

7. If you've done the course you understand why two accounts are realy helpfull.This is only if your doing it for a living.

8. Make sure you,ve got decent equipment with two links ie ADSL/ISDN and 56k modem.So if your 1st link goes down when your in a trade you've still got another link and the phone plus your mobile.The most i've ever had go on me are three things.My mobile got me out with a profit.These things happen very rarely but having them in place gives you confidence when you take your trades and you therefore trade much better.

9. Make sure your level 2 software can stand the Nasdaq open on your machine and dosnt lock up.If it does change the machine or software or increase your ram.

10.Try and have CNBC in the same room that your trading in for any breaking market news that could hurt your positions.

11 Finaly when you first start run through and check all your back up proceedures including doing a few telephone trades so you feel totaly prepared for action.

12 were in business! Paper trade it first writing a log on every trade before going live.Make your first mistakes on paper.Only go live with very small amounts when you can prove to yourself that its working.Build up slowly and do smaller trades if things arent going so well.
Be humble,even if you think you know how to trade.Take it easy and slowly.Pick slower stocks with lots of liquidity and plenty of players so that when the moves happen they are nice and gentle.When they become boring move up to the next range of stocks ie a little faster.
Dont trade the first half an hour first of all.this can be quite fast and furious.Plus many times economical data comes out 1/2 hour after the open and can turn the market on a dime.






Heres the disclaimer.Trading any market can be very unpredictable, any player must realise that they can loose all their money.This post is for information only.

 

[Naz]

Here's a typical website for trading the Nasdaq.I dont have an account there and i dont promote this firm. However just for interest only i felt it was a well laid out site that gives a very good view of what a reasonable company should offer.

It is quite interesting to move around the site and look at the type of software we use for trading the Nazdaq.It may look slightly daunting but you soon get used to it.Remember this is a guide and in no way do i promote this particular firm.

Its www.Fireflytrading.com

 

[riophil]

Hello Naz
Your posts are very informative and I enjoy reading them very much.I would like to ask you a question about the American
markets.
How much roughly would you say someone should
start with,to trade direct access on the nasdaq,including
initial stake .brokers software fees,live feeds anything else I
haven't mentioned?
I have traded in stocks but my main
experience comes from spread betting, where I swing trade
and scalp,obviously this is quite difficult with the wide spreads
but I have had some success.The amount may be too much
for me at the moment,in which case would it be cheaper
to trade e-minis, s&p,nasdaq?
Regards
Phil

 

[Naz]

There are new regulations that have just come out(i confess i dont know them all) that say that daytraders must trade with $25,000 in their account.To balance this they've allowed these accounts to have 4/1 margin.This is not the case for someone who wants to swing over a number of days.Your broker should let you have the level 2 software and data feeds for nothing.Although some will charge small amounts.

As regards spread betting i could never trade something where a third party were making a spread which always seemed to be against my best interests,and why should i pay a spread anyway?Nasdaq level 2 traders dont.

Remember as well, that learning level 2 dosn't come overnight and if i were starting again i would open a small swing account with level 2,take some swing plays over a number of days and practice,practice my scalping entries by paper trading level 2.Writing a log and entering what was happening how i would get in, who was running the stock,what orders i would use etc.etc. So as i built my account up i was getting more proficient
at learning level 2 skills.

This is just a personal view.

 

[RogerM]

Naz - ever the one to play devil's advocate - I have lifted this from another trader whose views I respect. Does he have a point?

*******
If you have level 2 remember that you are joining the majority of traders. Therefore expect market makers to try and hoodwink you. For example one of the classics going on at the moment is when very large buy orders are placed just below the bid and cancelled before they become executed to try and get punters to buy the shares. The market maker is really trying to offload his shares. Remember here that pretty much anyone who has passed a series 7 exam and has a sponsoring broker (like all the daytraders you hear about going to offices to trade together) have pretty much unlimited credit during the day, like the market makers. They only have to settle at the end of the day. This means those buy orders can be very big indeed.

 

[Naz]

Roger i'm glad that you mentioned all this.Lets take all the points.

Firstly the majority of joe public believe it or not use internet access,to place their orders.The next thing is that yes there are fakes subtafuge and everything else on level 2.If you like thats how the game is played.

The trouble is that new people learn how to use it from general type of courses or from books and then cant make it work correctly.That is why you have to learn from someone who has learnt the fakes knows the tricks and knows how to be one step ahead of the other players.

I learnt how to use it and then i had to go to the states and learn from two mega traders how to realy make it work.When i showed a move a couple of months ago on tv,i got quickly cut off and some rather strong e-mails for letting slip how to run a particular move.I realised that i'd let the cat out of the bag and i dont talk in public about how level 2 is realy played.I only teach it in private.

I'm glad that you have found out that there is more to playing Nasdaq level 2 than meets the eye.

However when i teach level 2 i teach the real way to play level 2.How to play the fakers and all the tricks