I'd like to discuss how I use my Level I Quote Screen:
As traders, we spend hours watching our Quote Screens everyday.
This is the screen where we see our streaming quotes, and our list
of stocks. This is known as Level I quotes.
My methods are based on the "pace" and "rhythm" of a stock's movement to identify the direction. For this reason it is vital to see the pace of buying and selling on my screen.
I use Real Tick III. There are other systems for viewing your streaming quotes, but all should have the essentials.
My screen is set up in columns. Each column shows us different information about each stock's activity. Watching this information allows us to make decisions about a stock at a glance. Traders used to get a feel for the movement of a stock by watching the ticker tape.
This became something of an art form, and watching our Level I screen is much the same.
From our screen we not only see the price of a stock, but we can also identify the direction that stock is going and the amount of "current" interest in that stock.
By following the buying and selling, the ups and downs, we begin to
see patterns to the movement of stocks. These patterns are what we base our decisions on. This link mbtrading.com will give you a feel for how my day is occupied, and what I use my columns for.
1. SYMBOL
This is obviously the symbol of the stock.
2. TRADE VOLUME
This shows me the amount of shares played in the last trade made on this stock. This is instrumental in helping us to identify "big Locks" which usually signals institutional interest. This can effect a trade if the stock is getting high volume, but may still be slow paced. For our purposes we want to see in this column lots of small trades. 5K and under. By big blocks I am refering to trades that the average joe could not afford. Lots of smaller trades gives us the volatility that will ease our exits and entries.
3. LAST TRADE or PRICE
This is the price where the last trade on this stock was made. This will be usually red for a sell, and green for a buy. Actually however it is red for a trade priced lower than the previous trade, and green for a trade priced more than the previous. We watch this column closely to identify the direction a stock is going. This also shows us the pace of a stock. This column is blinking red and green with every new trade. This is a very visual experience, and watching this blinking is the key to identifying pace, and direction. If we see fast blinking red, we know that a stock is falling.
If we see fast blinking green, we know it is going up. We see in this column see the actual trades as the occur. What we are looking for then is a ratio of buys to sells, and we are mentally tracking this as it occurs, to tell us direction. If we see the blinking steady and fast, we know the buying or selling is occurring at a regular, steady, fast but manageable pace. If it is blinking so fast that it is a blur, we know it is too fast for us to manage. If is it making only occasionally a lazy blink, we know it is too slow to allow us the easy entry and exits we want. This is the most important column, and the one I spend most of my time watching.
cont...
Ken
www.mtrader.com |
