I usually jump into positions 500, sometimes 1000 shares at a time... but after reading your post earlier in this thread last week about scaling in and out for 200 shares at a time, I tried trading/scaling in and out 200 shares at a time up to my full position size... Gotta say, it works out pretty well. Gives you a chance to feel out the little 5 cent twitches in a stock while it's churning and digesting its previous move and setting up for its next move. Certainly beats jumping in for 1000 at a time, only to realize your buyer is only refreshing so he can drop the second you pay.
That's exactly why I started this thread. There are *still* lots of traders trading this way. I think many people still think that, eventually, the market will return to the way it was a few years ago. L2 is merely a tool. It depends on the trader what he wants to do with that tool. Trading CSCO or MSFT off L2 is definitely a lot harder than trading something like TMPW. You're right, no one really gives a rat's ass if GSCO is on the bid or ask in CSCO or MSFT. GSCO might cause a 5 cent move in those stocks. That 5 cent move is still *MONEY* for some traders. But in something illiquid, GSCO on the bid or ask could cause a 50c move or more. It's easy money if you watch the stock like a hawk and get in at the right time. You ride it for all you can. If you're wrong, you hit out for 5 or 10 cent risk. I'll take 10 cent risk for 50 cent reward anyday.
There are still people screaming out things like that. At least in my firm. And, it's not merely "kids." We have lots of aged 30+ traders here that trade solely off L2, have traded off only L2 through the tech boom, and have traded off L2 before the tech boom. The truth of the matter is, no matter how good a trader you are, there are times when your stock isn't doing... jack... You can't make money out of nothing, and you can't force a move in your stock. If someone across the room has just been watching GSCO accumulate stock at the bid for the past 30 minutes, and the futures start trending and all of a sudden, GSCO is coming up high bid and spraying the offers, you bet that when that trader calls that move out, everyone that hears him will be able to benefit. It's really a team environment geared towards open communication. You can benefit off other traders calling things out, just as other traders can benefit from you calling things out. You may not trade *everything* that's called out (although you certainly can try), but a good majority of the things that are called out are good calls by experienced traders. If you were in a room full of traders, would you call out things that you thought weren't *really* good? Even if you don't trade *anything* anyone ever calls out, it at least alerts you to what else is going on in the market. There have been so many times where other traders have called out big moves, say, an INCA coming up in a first tier stock, only to have me type up 2nd and 3rd tier stocks in the same sector and watch them move as well.
Since we are on the topic now....I have a story from the bubble days that I think is entertaining. For awhile I was the head instructor for a daytrading class in Denver. At the start of each 4-day class I would do some live trades right at the open. I would purposefully trade super fast stocks and say nothing out load while executing them. Then after several executions, minutes of superfast Level 2 footage, order cancels, executions etc. (and hopefully after making a hundred bucks or so), I would stop trading look at the dumfounded bewildered looks of the newbies and say "How many people think they can trade this way now? Of course no one would raise their hands. Then I would say "How many think they will eventually be able to trade that way after the class. Maybe one or two brave hands would go up and I would quickly tell them they were crazy that it would take months etc. Then I would ask if there was anyone who doubted whether they would ever be able to trade this way and several hands would always go up (Level 2 is intimidating the first time for sure). At that point I would ask for a volunteer for someone to come up to my trading station. I told them to have a seat at my PC-which was still showing the Level 2 of AMZN and asked them if they were ready. No doubt they thought I was going to throw them into a trade. Then I told them while pointing to the keyboard "This is left, this is right, this is thrust, and this is fire. If you get into trouble push this...its hyperspace." They looked at me like I was crazy....then I quickly toggled over to Asteroids which had been running minimized in the background the whole time. Instantly, huge asteroids are drifting towards there ship. I would yell Move, Fire, do something! (then I would push the thrust a little just to get them drifting with gravity ha ha). Inevitablly they would get blown up within about 5 seconds. Before the next ship came up I paused and said, "OK you obviously did not get it...this is left, this is right, this is thrust etc"......and started it again. They would maybe last 8 seconds the 2nd time. Finally, after their game ended after only about 15 seconds of collective time, I asked them to go back to their seats and then sat down, started the game, and proceeded to fly around blowing up every asteroid in site, flying in between rocks, around them, right at them like a madman, etc. I would play for about 4 or 5 minutes without getting blown up and then stop. I concluded with the question, "How many people think that the first time I played Asteroids I played like I just did now versus how Mr. Volunteer there did a few minutes ago.......and then told them that the first time I played I got blown up in 5 seconds just like Mr. Volunteer and estimated how many quarters I probably spent before I got to be as good as I was. It was a great way to demonstrate the concept that trading is hard, takes lots of practice, focus, etc etc etc. ...... and it was great fun to watch them try to fly around and shoot the rocks with no idea what to do only to die in about 5 seconds. Anyway thought that story would be amusing considering the references to video games and Level 2 trading.
Believe me, there are some people who do pretty well employing that strategy at my firm. The good ones average like $1000 a day in bid/offer credits alone. It only really works on low price, low volatility, decent volume stocks like MFNX, not on stocks like SUNW or CSCO. The intro of LSPD bid/offers has made this style of trading even more profitable recently. It also sounds like a very boring style to trade. I haven't tried it myself.
LOL. That was a great story DATT. I come from a long video game background myself and I think that helped me get into my current firm. One of my friends here thinks that people that are great video game players would make great Nasdaq traders because of speed of recognition, speed on the keyboard, and reflexes.
Did anyone actually check this out? If so what did they think about this type of platform versus Tradestation or Realtick or Cyber etc. Thanks for any thoughts as I am seriously thinking about a move from a ticket based RT broker and the discussion between DatTrader, Momotrader, MacDaddy etc has me intrigued about super fast fills and Level 2 based trading/executions.
I agree with that statement. Certainly there is a lot more to being a good Nasdaq trader than just having good video-game skills, but it certainly helps. I was actually required to play a video game during one of the interviews for my current positon as a Nas prop trader.
looking for a real time demo here is another option try the demo at benjamincapital.com they have a video training session online also. Just another suggestion and option to compare with. The executions are simulated in a live environment so you see how it works real time. One thing is if you are trading all day you may not have time so I would suggest testing it on another computer while you trade. Worth taking a look.