Hey Scalpers, how do you enjoy trading against machines w/1 millisecond turnaround?

[FXTraderWill]

Quote from Hydroblunt:

Yes but you do hit L1 first and those fake L2 react instantly. Correct me if I am wrong, but the sweep hits successive levels, it does not automatically lock everything that is shown on L2 just based on the order you put in. Cause if it does, I think Nasdaq should get quite a lot of calls cause thats not how I observed or experienced it work.

It may definitely be a speed issue since these black boxes are located right next to the exchanges/ECNs.

I also do not think it may have much to do with the direction of the stock, it's sometimes simply a slippage game or a tactic for better fills. It may also be used to force out a position or pull a shakeout (especially short squeeze).

Specialists used to do this by simply not filling your orders. I guess now the game has advanced and it's done by technology.

The sweep can lock down the market and hit successive levels. I've been in a stock with a lot of liquidity for 30 cents and in one print it's ALL gone.... and it all gets printed, Arca, ISLD, NYS, Bats, etc. then, afterwards, a few offer will come back to fill it in. I only trade the NYSE so I don't know if this is how it works on NASDAQ.

I do see those successive levels pulling and reacting to the prior levels getting hit, but intermarket sweep orders should let you hit many levels simultaneously.

I'm a piker and I never have more than 2k shares, so I've never had to sweep more than 3-5 price levels down, but I see people sweep massive amounts of liquidity all the time. Are those people on the exchange floors or right near the ECNs? Possibly, but I don't think so. I'll do some experiments and camtasia my results to see if I can conclude that some liquidity simply cannot be hit by a daytrader on a T-3 connection.