| Welcome Guest, please sign in to participate in a discussion. | Search | Active Topics | |
Registered User
Joined: 12/13/2004
Posts: 28
|
Does anyone have a feel for the idea of trading levelII on Interactivebrokers platform? I would like to try the ten minute traders system suggestions,but am told it requires LevelII.I am not familiar enough with level II to know just how fast a trading platform is necessary.Any ideas welcome.Thank you Denis
|
|
Worden Trainer
Joined: 10/1/2004
Posts: 18,819
|
Moving to Market Discussion forum.
- Craig
Here to Help!
|
|
Registered User
Joined: 12/13/2004
Posts: 28
|
Craig,I'm not sure how to proceed .I'm interested to find out if I can use IB for levelII.Can you advise?
|
|
Worden Trainer
Joined: 10/1/2004
Posts: 18,819
|
Level II is not in TeleChart. I am not sure what "IB" is. Hopefully others here in the forum community can offer their thoughts on how important having level II is in their trading.
- Craig
Here to Help!
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
Nasdaq Level II, as well as archipielago, inet, and the latest and i think most important at this point in time Supermontage are just trading plataforms.
I will use Level II as a standard term, but just know that it applies to all other plataforms.
The Level II window will show you all the order depths at any given time (that meaning limit orders), you can also see of course who is bidding, or asking including the big boys on the street.
Supermontage shows the breakdown (depth) of the top 5 price levels of the NASDAQ SuperMontage system.
This breakdown is a true reflection of the Nasdaq Market because it combines quotes as well as orders.
The combination of these two features allows users to see not only all of the sponsorship in a stock, but also to view unprecedented depth at and near the prevailing inside.
With Supermontage, you'll see previously hidden depth near the inside that's attributed to specific market participants. You can review the data to understand order flow, analyze trends in liquidity, and identify pockets of liquidity.
You can trade on Level II without even looking at a chart. It will take years so to develop that feeling for level II, once you get to that point you will be able to see resistant and support as it happens, and how thick it may be. You will be able to navigate any market by seeing the real action. Level II will be difficult to learn since there is not a single book that will show you and that is because well how can you teach someone to swim without going to the pool. You have to be there and Level II is pure real time, there is no way to look back it is only there when it is there. You can not go back and see as you do in a chart. That also makes it very difficult to learn it. You will also need Time and sales window in conjunction to use level II; if you do not use it the market makers will play with you like you are a toy, and they will take your money when they get done with you.
One more thing, I strongly advise you not to trade using level II until you feel confortable with it. Do not follow anything they may say in any book, since the techniques in Level II change very often and the market makers are well aware of it. Books are just books, and reality is different.
You may start learning Level II in equities which are not volatile. One more thing Level II is a very fast pace enviroment in markets (equities) that are volatile so the only way you can take advantage of it is by using a direct trading plataform. If you place your order with a discount broker as ameritrade, scottrade, etc you should forget about level II. A second matters in level II trading. If you place your orders with Interactive traders you will be ok.
I do not know much about interactivebrokers, but the level II window is very much the same regardless of the provider.
Good luck.
|
|
Registered User
Joined: 12/13/2004
Posts: 28
|
Thank you BigBlock for your very reasonable explanation.I'll study further from here and heed your warnings which is exactly what I was looking for.Best regards Denis
|
|
Registered User
Joined: 2/15/2005
Posts: 5
|
I am a very experienced level II trader and am familiar with IB set up. The basics of level II are quite straight forward. Price, size of order and ecn are the three main fields. As for seeing support resistance lines on the level II screen, i am not so sure.Back two years ago, yes. Seeing Morgan holding a level or First Boston, etc.. Was quite an easy task and so the screen was littered with relatively simple risk-free scalps.After the implementation of super montage, most of the players have wisened to the game and are now hiding behind various ecn's which makes determining their intentions next to impossible. Sometimes market makers unveil themselves and enlist the help of day traders to accomplish their goals. At these points it is easy making quick profits of simply buying or selling in from of them. However dont be upset if you find that that market maker has suddenly disappeared and someone is clobbering the stock. For a while after the implemetation of super montage, the game was to follow large size around and post in front of it. These days, the game is quite the opposite, be prepared to hit the size for all u got. A couple months back this was my best strategy, often producing dime moves while carrying heavy size. The whole point is that the level II screen is littered with annoying games that are played by thousands of money hungry scalpers and market makers, all who have better per/fill/trade or share deals than u. Who, without the help of good technical analysis skills will leave yu frustrated and in debt. Pure level II trading is a reactionary game with millions of head fakes. If you can win at this game all you have to be able to do is beat the order entry computers that follow you around the market and post better bids and offers than u at the most inappropriate times. While no books have i found that are informative about level II, I find Active Trader to be a good source for the occasional tip and background info. My advise pick your entries and exits, use level II as a means of entry and exit, as an execution platform it is more than straight-forward, as a trading strategy it is not. So just use it to improve trading efficiency, not to generate signals
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
Clarification - as I do not want to mislead.
YOU WILL NOT SEE ANY SUPPORT OR RESISTANT LINES in a level II window. But if you have a let's say 1,000,000 shr to be sold at the ask you in a lets say a stock trading 5,000,000 shr you can clearly see that the stock is going to find important resistant when it hit that ask order. On the other hand, if you see the same thing happening in the Bid side you can deduct that the stock would have considerable support when it hits that bid order.
This is just a simple and unrealistic example to ilustrate the idea. In reality is not that easy since everyone hides behind small blocks.
But yes there will be no lines of any kind in the level II window.
|
|
Registered User
Joined: 10/7/2004
Posts: 264
|
Denis,
You migh try this http://www.pristine.com/aeduc/level2/ for some info. Also if you go to the Chicago Board of Trade website, under the educational webinars, I think Jack Broz did a presentation of how to use their order book (similar to level 2) to trade. Worth a look. Godd luck.
|
|
|
Guest-1 |