If you are not using Level 2, the bid/ask size can be deceiving.
For example:
Level 1 may show Bid size: 20 Ask size: 10
However, Level 2 may show several market makers at the bid, each
with varying amounts of sizes. As well as several MM's at the
ask with varying sizes. The real question is: How many MM's are at the
BID and how many are at the ASK.
Take a look at this web page and look at the Level 2.
vlcn.com
MM's at the bid are on the left. MM's at the ask are on the right.
The MM's abreviated names with their bid/ask sizes are very visible.
More sellers vs more buyers? I use a tick chart that tracks
all trades so I can see ONE OF MY FAVORITE INDICATORS: buy to
sell ratio with corresponding volume. I also use Level 2. When the stock
is going to drop, you visually see the MM's start dropping to the next
bid level. If the stock is going to go up, you see MM's rise to the higher
ask price. With a fast execution system, you can trade in and out....just
in time.
With level 1 quotes, you are blind.
Hope this answered your question. Let me know.
Paul: Castle did have some problems today. How many days have you
used them when there has been no problems? You can always make trades
with Castle if there is an outage (your computer, ISP, Castle, Nasdaq). They answer in 2 rings and your order is executed immediately. AB Watley was down for two complete days last week.
Each service is making improvments. I'm staying with them, as I have
done for a couple of years. If you move to another place, there is just as much chance of having problems, once in a great while.
Caste will be out with a new upgrade and a JAVA Kill Key.
Street Walker
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