It appears we are close. When pending orders are posted in Level 2, they are firm orders, and a dealer is obligated to buy (or sell) at the given price, so long as a counterparty matches it. Assuming the absence of sudden total illiquidity, pending orders are a strong indication of future demand and supply.
LOL! That guy has pinned my bulls***t detector more times than anybody else here, including the hucksters.
A transaction is reflected in price. A "pending" order is not. Do you have evidence to support your last statement?
Transactions are indeed reflected in price. The source of future transactions is pending orders, which under exchange and NASD rules are firm. Imbalances between sell and buy orders cause the price for the next transaction to change. Otherwise, stocks, like shares offered in many IPOs and inventory on supermarket shelves, would sell at a fixed price.
Yeah, I hear you. Don't get me wrong. Jack, seems to me, has a lot of intelligence. It's just that he tries too hard to impress people. If he would just get to the point, he actually might have something to help more people along. I think most can't follow him long enough to grasp what he is trying to get across.
What causes the price to change is the willingness of one side or the other to meet the price that's on the table. The quantity in and of itself is not necessarily relevant, though it can be.
Thanks for the great post Jack. I have saved it. BSAM and others - you can't control how Jack writes, in a similar way you can't make your girlfriend think the same way you do all the time. Choose to either a) ignore, or b) see where he is coming from to try to learn what you can. It may apply to your trading or not. I chose to read it, the concepts he talked about are true (cant make money if not in market or on wrong side of market) so I saved it. SIMPLE.
NZ..... Nobody's trying to control anybody. But, if Jack could be shown that he needs to convey his messages in a more understandable way, then that would be a good thing, IMO. Anyone can improve their communication techniques (I think). I and many others simply can't "see where he's coming from". And as for girlfriends......Oh my goodness, it's always best to have more than one. It's kinda like not putting all your money on one stock!!
As the originator of this thread, "man, this has gone totally bad." Thanks to those who contributed and made suggestions it's been very infromative and useful.