To everyone...
Wow, just read through the past 2 days posts and I wanted to make some comments on Level II and the daytrading expo in Ontario. Sorry for the length, but hopefully it is educational to some.
Level II. For beginners there is a free Level II tutorial on EliteTrader.com, and a more advanced one for a fee. I have had access to the advanced tutorial, and would say it's so-so. Considering the $300 could be lost in one trade, or gained for that matter, it may be worth it for some. There is nothing more important than experience though...
I had a large position in COBT last week that averaged around 110 so I watched it very carefully all week. A perfect example of MM manipulation that could be seen on Level II was late Thursday on COBT. It can be seen on the chart for those who want to see what I'm talking about. The stock had been trading near it's low all day (accumulation), when all of a sudden, for no reason, the bids just started disenigrating. The MM's knew that since the stock had held this level all day, there must be some tasty stop loss orders just sitting right below the bid for the taking, before the giant run. Within a minute or two the stock dropped a dollar, to new lows...this not only gave them the stop loss shares, but also those who were panicking. I almost panicked, but decided to see what was happening. During the next 5-10 minutes the stock had turned around, and jumped about $8. Gee...do ya think they knew that was gonna happen?? : ) This gave me great optimism for the next day, which turned out to be a $20+ day.
I attended the Ontario Daytrading convention, and was fairly disappointed. The convention was designed for daytrading brokerages to lure in new traders. The speakers had nothing new to say that most successful traders on this board don't already know...except for one (don't stop reading here, this is important). A options trader/MM on the Pac Stock Exchange named Micheal Williams gave a great seminar. He actually talked about things that we "average joe's" don't get to hear about. The most interesting tidbit of info was his speech about Instinet. He basically says that trading without access to "the box" (Instinet's equivalent to the Island Book) is like trading blind. JoF stated earlier today that Trading without L2 BTW is like trading blind....well nowadays that is actually like trading with really dark glasses. Micheal says that him, and all traders on all exchanges, and most institutions just trade on Instinet. Those of us with level II know that we get the top tier of instinet (INCA), but that is no longer enough. What if you just bought a stock, and the top INCA shows 1000 for sale, but someone is 1/16 higher with 20,000 for sale? I want access! The feeling I got was that Level II is a way for the institions to get the SEC off of it's back. Sure, now we get to see that MSCO is on the bid, but if he is selling big blocks on INCA that does us NO good. Micheal says that Instinet has made a deal with Etrade to give retail customers limited access, but I have no further details.
Ahh, now I feel better :)
Dust
PS-I would love any questions/comments on anything mentioned here.
edit: forgot a few things:
Cybercorp has told me that although they are now allowing access to Insinet trading, they do not yet have access to the box because Instinet keeps it under very tight wraps.
Micheal has a website at www.marketcompass.com and often responds to posts on the DTS message boards. There is a link to those boards on his website. |
