Day Trading, Orders, Level II

Discussion in 'Trading' started by tradinginzen, Feb 28, 2009.

  1. Hello all,

    I have been daytrading lately with some particular momentum setups that have worked relatively well. The main problem is when I apply it to instruments like TZA, SRS, etc., with wide spreads and even SDS (whose spread can widen quickly during expanding volatility).

    What I have been doing is executing market orders once I see the momentum moving. However, this can provide some unpleasant results. For example, if I want to buy SSO at 17.50 on 500 shares, well when a pop comes in the fill can come at 17.58... on a momo daytrade, 8 cents is a big difference when you are using very tight stops. This is particularly important with the more volatile/wider spread issues like SRS and TZA.

    I suppose the better entry would be to see where the momo should swing the other way (i.e. when an issue is basing, etc., and put a limit order in.

    I'd also like to consider Level II but with a wide spread and a price that moves so fast, I'm not sure how advantageous that would be. I recently subscribed to Level II quotes on my broker, but I have not used it yet.

    Can anyone elaborate on their own methods here, and does anyone have any resources or tips on using Level II? I know what Level II is but it moves very quickly.

  2. nysestocks

    nysestocks Guest

    Firstly, there are NO experts in the trading game, so save yourself a lot of grief and time by looking at loads of rubbish!

    Only trade highly liquid stocks with tight spreads, and there are ample there for you to use.

    Know the sector for a stock before you trade it!

    Watch where the institutions are moving their money at the open!

    If you must use L II, then know your color codes for the bands and pay more attention to T&S rate and patterns.

    If you are serious then map out your process in a PFD and post it up on the wall in front of you so that it is stuck in your face all day long.

    Last, but not least, BLASH and SHABL about 90% and BHASH and SLABL about 10%.