first of all the NY specialist is NOT out to get you. don't forget when there is a move in a stock you a probably the last in line behind people in the crowd. it isn't the specialist just trying to screw you and your order. its the guy in the crowd with 500k to buy that screws you when he gets in ahead of you. they move the markets not the specialist. reading the quote is not as helpful a tool anymore because of the move to decimals. too many 1x1 quotes nowadays. reading the prints on the tape however continues to be a good tool. you can hide size on the quotes but not on the tape.
trading groups has been my style of choice lately. mainly oil service(esv,slb,do...) and home builders(bzh,phm,tol...) look for the laggard.
I read a couple posts that said to avoid IBM because of the specialist. Personally, I don't think IBM is that hard to trade, and the specialist seems fair. Never have I had a problem regarding execution; even when going short when IBM was downtrending. The stocks I do have a problem trading are MU APC APA. The MU specialist makes it almost impossible to daytrade the stock. Multi-day trading with it isn't easy either as it just doesn't seem to trend like other stocks do.
reading the quote is not as helpful a tool anymore because of the move to decimals. too many 1x1 quotes nowadays. reading the prints on the tape however continues to be a good tool. you can hide size on the quotes but not on the tape. [/B][/QUOTE] This is a powerful tool to trading the nyse. Learn to read the time and sales
Yes, the prints mean a great deal... bit I still think there is scope for a combination of bid and ask size with print action... often there is information contained in the combination of information, particularly for thinner stocks...
The combination of information paints the most complete picture, especially on a thinner stock. Bid and ask size don't mean as much on a heavily traded stock, where only a small percentage of the days total volume will have been posted by the specialist. On a thinner stock one can often see the quantity shown in time and sales simultaneously disappearing from the bid or offer. As was pointed out here earlier, some stocks are just very difficult to read. For some reason the specialist's behavior is not always consistent, or is misleading. In one stock I watched for awhile he generally showed size on the bid when the stock was going down, and size on the offer when it was rising. Trying to pull in buyers or sellers to help him move the stock he had to buy or sell. Reminded me of liars poker. Keep searching. I have found a stock where the size posted on the bid and offer has integrity. I also watch the prints, are they green or red? What is the trend? What about their volume? Is the stock/sector strong or weak for the day? I love to short w/bullets, but if the trend is up I won't get much, it's more forgiving to play the long side, less risk. What is the overall market's momentum? If the market slows down or stalls, how does my stock react? Does it slowly roll over, or do I need to anticipate and be quick? It's kind of like being with a woman... if you spend your time with one stock you can get to know it very well. If you get along, great! If not you're better off to find another one. Yes it can get boring at times but by watching and being available you learn to recognize a good opportunity and act on it. I like to trade small lots often to get a feel for the action and keep my head in the game, and then take a bigger position or add on when a low risk situation presents itself. Candle's opening questions are great, I wish someone would answer them all Swing (a misnomer, actually a daytrader)
IBM isn't difficult because of the specialist (true in general about any NYSE stock, but there are exceptions) IBM is difficult because it is a highly optionable stock, and players are constantly hedging themselves with the common, which means that you are the last one to know what is going on. This is true for all highly optionable NYSE stocks - IMHO, stay away (from directional trades) unless you want to play basketball against Michael Jordan. If I were starting to trade NYSE today, I would start by: 1) pick a stock above 30 2) pick a stock that trades above 1 Millions shares a day 3) pick a stock in the SP500 4) pick a stock that moves with the spoos (prem) 5) make sure I had my squawk on, and watch every tick that goes by for a month on.... I would pick GE during dead zone. Try to get the price action here, and you will have mastered an important skill (You will be bored to tears, but noone said this was a glamorous job.) At the same time, work your way out from this, that is, trade GE and a couple of others (e.g., GE, JPM, BMY, HD) during the open using OO orders, and then the close. This is already alot, but if you are already used to watching more than one thing, then doing what metal1 suggests is _EXCELLENT_, and if you do it the way that Hitman does it, even better. Throw in a pair or two after all this, and well, you are trading now... nitro
Thanks Nylord-for someone who has traded 90 % Nas, and am just starting to learn about the ins and out of the Nyse, your post was very educational-keep it coming
Until recently I have focused on the Nasdaq. I have added many NYSE stocks to my screeners and have started trading them via Island. I have sent some orders directly to the NYSE (During emergency break glass) but otherwise I post to the Island. Usually I get hit within a penny of the NYSE Best B/A. All things being equal I would rather post to Island as my broker passes on the rebate to me but should would welcome comments on using the ECNs ( Island). Thanks in Advance.