Hey folks! If I have a good broker with direct access trading (IB), how fast would a couple of thousand shares get filled on a very liquid stock (10mil shares a day +)? I am looking to scalp off of a 1-min chart and don't want to get burned if I set a .02 stop and the order runs up without getting filled until .05-.10. Also, if I set a stop for a couple thousand shares, will the specialist/MM see that stop and lower the bid just to take me out, or is it such a small size that it would go unnoticed?
SoCal, I believe with IB stops are held by them, and executed when the specified price level is traded through. Whilst MMs/Specialists cannot specifically see your stops in this instance, do remember that a lot of traders tend to place stops in the same place. IB were pretty good, if liquidity is present as you are implying then it all comes down to your latency and how many others try to place orders and get them in front of you. But I don't remember how advanced their routing options were and their Java client used to run horribly even on my P4 3Ghz with 2GB of RAM. Except for swing trading, I personally couldn't go back to using them. That said, I know people trading very successfully using them. I'd still stand by my recommendation of Laser from Genesis as in my other post however - but this is merely personal. No affiliation other than happy user.
Great response!! I'm just trying to figure out all the fine details before I actually trade the system for real. Majority of my trades will have a .02-.05 stop. More often then not, I can get .10-.20 profit per trade. Risking $25 limits my downside and the potential upside is great. Reference Laser... can I trade off a chart. For example, can I move my stops around via dragging them to specific points on the chart, or do I need to enter them manually? Also, do you use the hotkeys with Laser? How are their charts? Customizable? What do you end up paying each month in fees. I see a $200 platform fee. Is that it? What kind of commissions do you pay and how much buying power do they offer?
SoCal, I too use tight stops as I tend to only enter high probability setups, although they are mental as opposed to actually placing them and involve me at least initially watching Level II pretty closely. Unfortunately Laser does lack good stops, they have a client-side stop system but I stopped using that after a single print went off 70c outside the market and took me out of a nice position and also put me the wrong way round (was short, it took me out and put me long!). It also relies on my internet connectivity being 100% so I don't feel safe leaving the PC and stepping out. That is my major gripe, although I gather they are working on server-side stops I'm yet to hear anything definite and have found quite a few other users pissed off about this. You may want to question them about this. It's not like I have any ulterior motive (e.g. pressuring them as I want this!) It's weak in charting unfortunately IMO and for this I *gulp* rely upon eSignal. I greatly dislike eSignal as a company for their terrible support and programming, but unfortunately love their charting when it's working. Contradiction? I know. One day I might get around to writing my own platform perfect to my use, but for now am focusing merely on the trading! R.e. Fees etc, you have several options as there are quite a few prop firms who use Laser too. I found a site a while back created by a user here, see this post: http://www.elitetrader.com/vb/printthread.php?threadid=71359 I use an X-keys keyboard, my trading is primarily 99% liquidity taking and literally just hit one button to enter a limit order of whatever I want and execute it. One other note: IB's "SMART" routing is server side, Laser's is not or so it appears. If you have high latency by being on another continent or some such thing this does mean you have to be a little more pro-active in learning about routing. Hope this helps - and this is only my somewhat limited opinion so you're probably better waiting for others to respond with knowledge of more platforms.
BlackPanther, First of all, thanks for the detailed response! Now, about your stops. From what you wrote, I got the impression that you don't rely on a previously entered stop, but instead keep your eye on the position and exit at market if your stop price is hit. I can see how a mis-tick could trigger a lot of stops. If you don't mind, could you expand on why the charting isn't up to par? I simply need a 2 hour/ 1-min candlestick chart. No extensive indicators, etc. Does the Esignal charting you use accurately move in conjunction with Laser's quotes? No lag? That was one of the advantages I liked about IB. The fact that I could do all my trading through QuoteTracker (I've been using QT for quite some time and like their charts). I hadn't even heard of X-Keys until you mentioned it. Wow, I bet that makes trading much easier. Execution-wise, when you press the X-Key to buy at market, on a liquid stock, would you say that the fill is almost immediate (within a second or two) using Genesis? I will be trading in San Diego, so I'm sure the routing speed should be fine. What's the difference between Laser's routing and IB's "SMART" routing? Thanks for taking the time to respond.
your order from IB to the exchange will be measured in milliseconds. The fill speed will be dependent upon the exchange. If a straight ECN, you'll receive an immediate fill.
Well yes. TWS executions are excellent and as fast as any in the industry. But the problem I have pointed out before with scalping on TWS and hotkeys or an Xkeys keypad, is that you need to use the mouse to highlight the order line in order to use the hotkeys to adjust the share quantity and the share price. This happens in booktrader and the level 2 trader. I don't understand, when TWS is almost there for full capability to be a total hotkey platform, why this feature is not addressed. TWS is about two steps away from perfection as far as hotkey entry. But requiring the use of the mouse to highlight the order line takes too much time if you're scalping, in my opinion. The other item that slows a scalper down, is that TWS defaults the share quantity to the global default. So if your default is set to 100 shares and you want to scalp 400 shares of Rimm, you either have to set the global to 400, or use another key to adjust the size before transmitting the order. Five minutes later if you want to scalp 200 shares of Goog, you have go through the same adjustment all over again. There should also be a hotkey capability to set the Booktrader and Level 2 trader active window to their own default share size, rather than relying on the global default size. I did submit suggestions to the new features poll, but they never showed up there. Thanks.
If you are scalping a stock its nothing to set up a buy and sell line in advance. Then you just use the cursor to move to the line you need, adjust , and one key or click away from an execution. You can set up as many lines as you want in advance for scaling in or out. Don't know what more you need. It's not possible to do it any faster if you trade this way.
The suggestion to improve hot keys showed up on the IB poll under TWS category. We need your vote here: http://www.interactivebrokers.com/en/general/poll/poll.php?ib_entity=llc#cat_tws