beginner prop strategies

They teach us at my firm to simply use level 2 to judge the current market conditions and decide what sort of trade we should be making; IE scalp or hold for a bigger move.

Also I use it to try and enter a stock right when most of the liquidity is drying up and it looks like it is ready to make a move. Pretty basic stuff.

I don't even look at L2 until I see something on the chart that interests me.

What firm are you with?

edit: i should say that i never just look at level2, but always with time and sales next to it.
 
Hey Kris....

When I first started trading stocks, it was a similar environment to now...A lot of trying to find something that would go up even in a downtrending market...

I would play a lot of lower priced stocks (partially because I didn't start with a lot of money). I would scan for stocks in pre-market that had great news for the day that were up a decent percentage because of that. You could probably use www.nasdaq.com to find candidates. Then I would wait for a pullback around 10:30 or so, and jump in when it looked ready to go up again.

I had some decent success with that. Moved on to currencies now, so you're welcome to try the strategy if you think it might work for you. Just one more thing to try...

Good luck!
 
Learn to trade WMT - it's got good fundamentals, and the specialist makes a good market. Don't trade IBM or GS - they are widow-makers.
 
Hey,
Level 2 is almost useless their are only a hand full of traders in all the U.S. who can use those tactics profitably- even mms cant beat each other doing it . Its a 90s plan being sold too late by people who know it doesnt work ....ya need to find another way, not exactly uplifting i know, do 3-4 100 trade samplings find your win ratio- subtract the tickets, youll find out for sure if your edge can work . Just my modest opinion.....P.s. my win rate is currently only 40-50% thats why i only paper trade right now.
 
Thanks for everyone's feedback. I'm a couple weeks in and learning something everyday. Definitely crazy markets right now.

I've become disciplined with my stops and rarely take more than a couple cents loss. That being said, I haven't had a green day yet lol basically just surviving at this point.

One guy in our class has advanced up a level (was profitable and made over 50 trades). I find getting the trade volume in is difficult - I do better if I trade less and pick my spots - but this isn't the nature of scalping.

Looking forward to getting more experience, a lot of the advanced traders here are making money from market crosses, dark pool liquidity etc. and only a small portion from TA
 
I'm not a day trader yet and working to save enough for training and to have enough to survive the learning curve. Something I noticed from what you said in your last post. Picking your spots is working for you, not scalping. Maybe you are trading the wrong style for you personally? Just some logic, i'm not really experience.

food for thought

Mike
 
I don't really use TA on individual stocks but I do use it on the S&P. It's useful to know where support and resistance lie because in alot of cases individual stocks trade partly in step with the indices.

I would recommend you focus on a few different stocks. Pick stuff with high volume and a good range. In this market I like to have a few stocks I trade on the long side on range bound and upward trending days. On downtrending days I typically trade a super short etf on the long side. Once you are comfortable try taking positions in both a short side and a long side trade and work them throughout the day. That way you give yourself the opportunity to make money either way.

Don't push it though. Trade small until you get into the zone and start making money, then start to trade a bit bigger. Once you start losing cut back size again.

Never shoehorn yourself into a trader designation. You should use every system the market affords you. Scalping, long term trades, TA, swing trades, day trades, etc....they all have a place in your arsenal. Learn them all more importantly learn when to use them. Think of how much money you would have missed out on as a scalper trading for pennies in the late 90's bull market. Or how much you would have lost trying to be a long term guy this year.

Good luck.
 
Quote from JCVR:

I don't really use TA on individual stocks but I do use it on the S&P. It's useful to know where support and resistance lie because in alot of cases individual stocks trade partly in step with the indices.

I would recommend you focus on a few different stocks. Pick stuff with high volume and a good range. In this market I like to have a few stocks I trade on the long side on range bound and upward trending days. On downtrending days I typically trade a super short etf on the long side. Once you are comfortable try taking positions in both a short side and a long side trade and work them throughout the day. That way you give yourself the opportunity to make money either way.

Don't push it though. Trade small until you get into the zone and start making money, then start to trade a bit bigger. Once you start losing cut back size again.

Never shoehorn yourself into a trader designation. You should use every system the market affords you. Scalping, long term trades, TA, swing trades, day trades, etc....they all have a place in your arsenal. Learn them all more importantly learn when to use them. Think of how much money you would have missed out on as a scalper trading for pennies in the late 90's bull market. Or how much you would have lost trying to be a long term guy this year.

Good luck.
More...

Nice post. Agreed about different strategies. I tend to use Price Action to define trends and identify entries and exit. I also use S/R.

What strategies do you recommend or do you find yourself using when daytrading. Do you just follow price? Do you use other metrics, like MAs or Volume?
 
Quote from vingbel:


What strategies do you recommend or do you find yourself using when daytrading. Do you just follow price? Do you use other metrics, like MAs or Volume?
More...

I go mainly by price, especially in this market. I like volume and MA as indicators, they can make you feel more comfortable about a trade, but at the moment I think most technicals are useless because there is so much outside noise.
 
Quote from JCVR:

I go mainly by price, especially in this market. I like volume and MA as indicators, they can make you feel more comfortable about a trade, but at the moment I think most technicals are useless because there is so much outside noise.
More...

Do you try to determine a trend by HH and LH? What periods do you find useful for MAs?

Just so I'm not only asking questions, I tend to use two HH with HL before saying it's an uptrend, then enter on the pullback (not below the trend). I haven't been using MAs for a while, which is why I ask what periods you tend to use.

I've also S/R lines but I don't have a set formula for how far back to go with thos S/R line when entering and exiting for daytrading.

BTW, someone mentioned trading on dark pool liquidity. How does that work?

And is it true that prop traders don't use TA patterns at all to trade? Many of the daytraders I know use TA patterns exclusively. What to prop traders use?
 
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