I have been trading only NYSE stocks and thus far have found the Open Book it to be unreliable and at most times deceiving. The traders at my shop try to use this to gain an indication of orders coming in and out, Unfortunately the only orders that move a stocks price are market orders, something the Open Book doesn't reflect. Does anyone have any insight on how to properly use the NYSE Open Book?
The NYSE OB is very important if you scalp stocks...but....it is not really reliable if all you are doing is using it to look at limit orders. You really have to trade NYSE for a good deal of time before you can truly appreciate how to read (and use) the OB to your advantage. Knowing where to place large orders in those key situations is priceless....
are there better stocks that follow the NYSE OB, I found some stocks suck as AMD and STK too thick to gauge large orders, on the other hand there are some thin stocks, especially the gold FCX and NEM are thin and don't follow the OB large orders. thanks for all the feedback.
There are no magic formulas or special stocks that will provide you with 100% real and true info from the OB. It will come in time. You need to watch the market/stocks trade day in and day out and pick up little tricks here and there. Its all about experience. Having a high level of perception is hugely important too.
The NYOB is clearly only a guide. The refresh rate is 5 seconds so orders that have gone through may be refreshed any time within the 5 seconds. An order my blast a wall and the book will be refreshing right away or you may have to wait 5 seconds for the refresh. This can be incredibly nerve wracking if you are waiting to see if a massive wall has been lifted. What can be taken from the NYOB?? As one of the earlier posters said....it is a guide. I use the big walls to help indicate where i may clear out a position..... If i'm long ill look to see where the next major wall is on the NYOB.....varies for every stock and the more time you trade certain stocks the more you will understand what is a large wall and what is not.....I will place my exit just inside the wall to ensure that i get out.... The specialist can be a real jerk with this information...He may iceberg a level and absorb enormous amounts of shares all the while the NYOB will show only 100 shares....This makes scalping very dangerous. The bit about deceiving....absolutely... I have on level II set to just the NYOB...another sitting right beside contains all the ecns and the NYS level I. This allows me to gauge ....when the ecns are drifting away from the NYOB i will follow them and blast a wall to follow their lead...slightly risky. The Level I price is spot on so at least have that somewhere on your screen....even over the nyob........For fifty bucks a month the NYOB makes me well more than that a month as long as it used in conjuntion with other tools...see ECNs As a final thought....i used to trade beside a guy who didnt even use the open book and he would steadily take home 5k/day making me look like an amateur. He felt the open book would cloud his trading as it was unreliable. So its all in the way its used...or not. Hope that helps
wow, thanks for all the feedback. MC I wasn't aware of the 5 second refresh and that can explain alot of the nerves and showing of 1 (100 shares) on both sides , bid and ask from the specialist. The other thing I have attained from the few months of staring a the OB is how the price can go up with no buying, I found this remarkable as I always had the impression that only buying (taking out the ask will drive the price up. I have now seen the price go up even with selling on the print, this might be the specialist taking the stock where he wants it to go?
On many stocks OB is worthless and gives the wrong signals. But if a big buy or sell program starts coming in from an institution through the Open Book, you better believe it that it will control the stock. It's not a scalping tool like it used to be, those days have been over for years. At times it seems to resemble Nasdaq, where all shown limits are gone from the key levels till the price starts coming through and the suckers get shaken out and the you see all the orders come back, refreshing nonstop. Those computers are itching for the Hybrid to kick in, I can smell it.
You obviously seem to miss the fact that what you call "only orders that move a stocks price (market orders)" are possibly motivated by decisions based on Open Book information. "How" these are related is a typical market riddle to be solved by you.