In perhaps one of my most questionable moves ever, I took leave of the safe and secure world (for me) of Nasdaq and entered the uncharted (literally - Don ) domain of listed stocks. I was tempted by the potential of OO orders, since I already don't place my first trade until about 9:45. While I haven't been able to place an OO orders (I'm not a pro firm yet), I have been watching listed action steadily for the past week. As yet, I cannot seem to make head or tail of the action. Nevertheless, I thought perhaps if I place some live trades my head would make sense of the game a little more. After three days of getting chopped up I am totally intrigued as to how traders make money on listed stocks. My short term observations are these: - the action is VERY slow - getting 20c feels like a monumental victory - the spreads totally throw me off - Orders take forever to execute (not to mention cancels) - I find it very difficult to play "tight defense" as the specialist (to my untrained eyes) prints trades all over the place - Getting short is next to impossible (without bullets I guess) That last point is my most troubling. It basically means that you will HAVE to restrict yourself to playing only a few stocks that you then set yourself up with conversions or bullets for. Otherwise you are basically limited to playing one side of the market. Also, the importance of sticking with only one or two stocks while learning to "tape read" is obvious. My question is, is the skill of tape reading, once one is sufficiently skilled in it, transferrable to other stocks? Or do you have to "learn" them aswell?
<i>Getting short is next to impossible </i> Just short the bounce You will get filled if it looks like it's going up. You have to take a little heat, but that is the nature of shorting, imo. And bullets are not the magical, mystical answer (not for me at least). The commission costs of a bullet are substantial. I have to make about 10 cents just to break even on a net basis (bullet costs vary, of course, but they are not free).
Certain aspects of tape reading are general to all stocks and others pertain only to specific stocks. Bullets are incredibly important in my game so you should think of getting a 7. As you trade more listed, you will learn that each stock has their own characteristics and you will learn which ones to avoid. Takes a while....