using exchange's pegged order types or doing it by observing level 2 events?

What are the pros and cons of using the exchange's pegged order functionally which lets you match the NBBO or offer 1 tick price improvement.. should I trust the exchange or should I observe every level 2 order book event and place and withdraw the orders as needed.. ?

I can do both and experiment, but I just wanted to see what others thought

 

You are guaranteed to be much slower than exchange itself. You may end up crossing the spread unintentionally. But if you are trying to accomplish some other logic, then it's a different question.

 

Well, I need to be able to tell my order apart from the other orders to see if I'm the only one in line at a certain price level. If I use pegged orders from the exchange,I dont think I will be able to tell that it's only my quote at the inside .if I'm only 70 microseconds from the exchange, will it be that much slower?

 

Well, you don't really have a choice then. You are planing to send non-hidden orders?

 

Yes I'm planning to post displayed orders to also earn rebates. I might experiment with hidden orders also