Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : SOES Trading -- Ignore unavailable to you. Want to Upgrade?

To: Jay Morrison who wrote (1197)	1/17/1998 5:34:00 PM
From: desTROYer	Read Replies (1) \| Respond to of 1618

Jay, My type of trading doesn't generate alot of commissions. The office I referred to has a mininum $$ per day per trader limit. My system wouldn't reach that number. They did imply that I could rent the equipment from them for a daily fee, but by this time in the visit I had already ruled them out and didn't follow through. In my research, I can't find a winning method to following volume. I don't know why, I feel there should be one. I couldn't find one. Seeing the bid/offers is helpful 90% of the time. If you read back through the earlier SI SOES posting - you'll see alot about big time swings in the price wiping people out. I would GUESS that they were using the bid/offers to determine their position. Then one of the big traders switched their bid to an offer and down went the market. The classic book "Reminiscences of a Stock Operator" by Edwin Lefevre has alot of examples of this. I found the biggest thing about a level 2 screen is information. It has alot of it and it is coming at you fast during a move. Then during lunch(1 example) it almost stops. I find it very hard to adjust to the slow down after gearing up. The new generation of level 2 software is suppose to be light years ahead of today's software.

To: Jay Morrison who wrote (1197)	1/19/1998 3:37:00 PM
From: Michael Friesen	Read Replies (1) \| Respond to of 1618

Jay, I SOES traded about a year ago (in school now). Trading based on bid vs. asked size would work on balance if one could get executions when one wanted them. Unfortunately, your fills might be 1/8 or 1/4 worse than you would expect. The reason is that MM's are only obligated to fill a certain volume on SOES (the rules change around, maybe it's still 1000 - anyone know). After they fill this amount they have 20 seconds to update their quote before they can get SOESed again. So while an apparent supply/demand imbalance on your screen may well imply that the price is about to change, you may not be able to take advantage of it in real life. I remember lots of guys who averaged $3000+ on paper per day (net!) for weeks, but did not do quite so well (!) when they were trading real money. Among other things, the situation I have just talked about was often one of the reasons. Michael Friesen