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Strategies & Market Trends : Level II Trading

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To: ExCane who wrote (138)	2/9/1998 8:50:00 PM
From: Jay Morrison	of 1086

That is a key mistake that I think most people on this thread are making. If a daytrader is trading stocks that Market Makers can manipulate, then the daytrader is trading the wrong stocks. Trade stocks that are liquid and have institutional action and alot of retail trading. Trade stocks that are moving on news (upcoming earnings, pre-announcements, new contracts, mergers, etc) Then you are not competing with the market makers. That is the advantage that a level II system gives you. You can see this happening and can move with the trend. You can also see it slowing down and bail out. Market makers are making money by playing the bid and offer all day long. You cannot beat them at this game. Don't even try. They can make moeny on 1/64. (by the way, when you see 1/64 trading, it is market makers spliting the difference on a trade) Market makers are losing money when they have inventory and a stock is moving against them. That is why earnings are always bad for Saloman Brothers when the stock market has a bad quarter. Their in-house trading got crushed because their inventory value is down. Jay

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