Thanx, AAA. I usually concentrate on stocks in the 20 to 65 range, and between 300K to 800K average daily volume. i'll put those parameters in my screener, then filter out the stocks with negative or over 100 p/e's. once i have my list, i download their one month history in spreadsheet form into my Excel program that calculates the average daily trading range. then i pull the 5 day chart of the more volatile moving stocks to study it's trading pattern, and determine in a thin spread, wavy pattern, or wide inside spread/choppy. then, i put the choppiest stocks into my watchlist, and program each of them into a key on my keyboard. that way i can scan about 50 stocks with adjoining charts and level II boxes in 30 seconds. i have QuoteTracker on my 2nd monitor, and it beautifully arranges them according to the size of the inside spread. a lot more goes into picking the exact stock to trade at the exact time (momentum of futures and averages, depth of buyer, market maker, and ecn support, and seller resistence, 1 hour, 2 hour, and sliding day charts, news, etc.), so this is the reader's digest condensed version. occasionally i'll trade stocks with no profits, provided they're trending up, or high volume stocks that normally mirror the averages, but may be lagging (XLNX, YHOO), or that trade within a very predictable range (GS, LEH). hope this helps. Sammy
Level 2 became pretty much worthless when they started giving it out to the public for free in the 1990's. Way too easy for the pro's to place fake orders to show "strength" and "weakness" .. and all that the public sees is the clearing firm or the ECN, so they can do it anonymously at will. I try to line up L1 (quote window), L2 (montage), and New York Open Book so that my new people can see the real markets.... and "real" orders...since there is a short delay with NYOB it makes it more "real" (not perfect by any means), but more real because very few people are going to place 10,000 share orders that they cannot cancel immediately ...when they're bluffing or placing "ghost" orders. I crack up when some of the "academies" actually start showing the retail traders "look...Goldman is a big buyer" etc., since we all know that it is likely just some guy screwing around. The NYOB is another tool that is required for trading, in my opinion. Naz trading doesn't really allow for any tape reading skills at this point in time anyway, so I wouldn't place too much emphasis on attempting to read anything from the OTC L2. There is so much "noise" with the OTC stocks, you really can't get any "edge" unless you see order flow like the MM's do. This may change when they get those OTC stocks listed on an exchange...which is starting to happen. I am putting together another article that goes into more detail of how tape reading is used, and you'll be able to check it out soon. All the best... Don
What? You don't have a free 1 year subscription yet? Geez, I try to include all my friends in that offer...send me an Email....(now for a "jab"..."doesn't Genesis offer this kind of stuff?")... I'm just having fun...and, as I said, I hope the experiment works out for you.... Don
i was 20 for 22 today, strictly trading the level 2 action. if e*trade calculated p&l last in/first out, instead of first in/first out, i would have been 22 for 22. those 2 trades i had minuses on were really average down's that i decided to bank a quick scalp on. i have several open longs, and a few shorts, so i decided to only trade half my normal sized lots again. but, it does go to show that level 2 scalping still works if you can negotiate through the trickery, while employing some of your own.