Trading the NYSE intraday

Don Bright · May 18, 2002

Mr. Candle....you are, once again, asking all the correct questions. You have covered approximately 15% or so of the details we "beat into you " during class. You know I'm not trying to sell You a class, but these things take hours to really get into.

We now spend 2 hours on the tape reading questions alone. I will, just for you answer a couple of questions, inserted below. I don't know how to bold only the answers, so everything is bolded. Sorry...

Originally posted by candletrader
Dearest Brethren,

I introduce this thread to gain general insight into the multiplicity of issues revolved around trading NYSE stocks on an intraday basis.

Please add any general insights that you may have on this theme. I hope that this thread develops into a pretty wide-ranging discussion of the various facets of NYSE trading.

Potential areas of discussion (just suggestions) :-

[*]the use of bid and offer sizes in deducing direction ...Significant, and changes intraday, by stock, etc. A part of a "larger picture" if you will. Generally if there is a "much bigger offer than bid, then I want to be long (yes long) vs. short.
[*]the significance (or otherwise) of block trades. These are highly significant, since you must be able to recgonize the "players" of the game.
[*]lower average volume stocks versus higher average volume stocks You know the answer here, liquidity is much more important when trading nyse.
[*]the efficacy of technical analysis in NYSE trading Pretty much no time for it, you're busy tape reading. Again, we spend time on which aspects you should focus on (aspects of TA).
[*]NYSE sector trading...(I'd be giving too much away to everyone, and not doing this justice here, sorry).
[*]how specialists shake traders, and how to differentiate a fake shake from a genuine reversal ...1 Full hour on specialists alone, how to read them, how the rules work.
[*]preferred price ranges...(Of stocks,....always $25 -$75 or so).
[*]ultra short-term scalping versus intraday swinging; high probability versus profit maximisation? (BASIC, entry point, Exit Point....the market will tell you when to get in and out...nothing else (especially "predetermined price targets or something equally as foolish).
[*]how decimalisation has reduced the efficacy of certain trading techniques but enhanced the efficacy of other trading techniques
Helped: pairs, size traders, m&A, openings, etc. Hinder (somewhat) strictly "old fashioned" momentum players who haven't kept up with the changes required. A whole new methodology has grown from decimals.
[*]specialists to avoid _ the bad ones
[*]arbitrage techniques Too many, and to different to go into here.
[*]trading with the specialist on imbalances Simply done daily, on openings, closings, and intraday during trade throughs.
[*]psychological barriers to making the transition from Nasdaq to NYSE "You gotta be nuts to trade nasdaq, sane for NYSE" Just kidding guys!!
[*]if it is the case that institutional activity is more prevalent within NYSE trading, will Summer institutional vacationing lead to relatively better intraday follow-through on Nasdaq stocks this Summer? "Institutional vacationing"?
[*]ANY other points of interest relating to the intraday trading of NYSE stocks

With warm feelings of platonic love,
Candle
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Hope that helps somewhat......this stuff simply cannot be taught via books, etc., and it changes all the time. Sometimes when one wants to become a doctor, medical school is a good idea.

Peace and Love!!

Don

candletrader · May 18, 2002

Dearest Brethren,

Thanks for all this input... hopefully this thread can grow into some kind of centralised "knowledge depositary" for intraday NYSE trading...

Candle

felichka · May 18, 2002

I basically read the tape and use basic support and resistance and the spoo/premium ticker to enter and exit trades.

What is premium ticker ? I am confused with this term.

nylord1 · May 18, 2002

What is premium ticker ? I am confused with this term. [/B][/QUOTE]

spoo-(spx+fair value)= Premium

liltrdr · May 18, 2002

This is something I was wondering about. If I were trading a highly liquid stock like IBM, could I just rely on ISLD and other ECNs instead of going to the specialist? Does this eliminate partial fills?

nylord1 · May 18, 2002

Originally posted by liltrdr
This is something I was wondering about. If I were trading a highly liquid stock like IBM, could I just rely on ISLD and other ECNs instead of going to the specialist? Does this eliminate partial fills?
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Yes, you can use an ECN but my feeling is that unless I am absolutely sure of direction for an entry or I just want to cover and get out, I want to get filled directly by the specialist to be able to "feel" him out by looking at the way he fills me. Don, any thoughts on this?

ronb107 · May 18, 2002

This is a terrific thread.

I just started trading at WorldCo and have somehow fixated on GE recently. The reason is that it has enough volume and movement to fit my style. I find the charts are easy to read and the specialist somewhat predictable.

Currently trying to overcome being shaken out easily (still nervous about losing 5+ cents, even with 1 lot positions). Yes, I know, 1 lot - what's the concern. It's not the size; it's getting comfortable with one's strategy so I feel confident with 15-25 cent drawdowns (or to reposition the trade - exit and get in at a better price).

My entries appear to be >60% correct; position management is my issue.

The point is, I would like to discuss in greater detail the experience/strategies of others, especially with regard to GE.

TIA, Ron

Free Thinker · May 18, 2002

"This is something I was wondering about. If I were trading a highly liquid stock like IBM, could I just rely on ISLD and other ECNs instead of going to the specialist? Does this eliminate partial fills? "

you can trade listed on isld but for anything other than QQQ the spread is wider than on the nyse.it doesnt work out all that good.

potrader · May 18, 2002

Originally posted by vhehn
"This is something I was wondering about. If I were trading a highly liquid stock like IBM, could I just rely on ISLD and other ECNs instead of going to the specialist? Does this eliminate partial fills? "

I was traded naz for 3 years and switched to Listeds about 2 years ago.

I almost always use ISLD/INCA to enter positions. I found that locking/crossing the specialist with the book gets me in when the momentum is starting to rip. (besides my broker pays me for ISLD and INCA liquidity).
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shneed · May 18, 2002

Why would you have to lock/cross the specialist, when NYSE Direct auto executes your order? Do you do it when there is no size shown? Does it work on semi-liquid stocks?

Thanks,
shneed