In my experience as a trader, when another trader who appears to be intelligent and more or less experienced states with complete confidence that one or another tool is "practically useless," and then some group of traders start competing with each other over how demonstratively they can chortle, there's a good chance that something very useful and practical - not to mention profitable - is there to be discovered and adopted.
Level 2 Tricks vs. True Intention
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In my experience as a trader, when another trader who appears to be intelligent and more or less experienced states with complete confidence that one or another tool is "practically useless," and then some group of traders start competing with each other over how demonstratively they can chortle, there's a good chance that something very useful and practical - not to mention profitable - is there to be discovered and adopted.
Had one used the phrase "totally useless" with complete confidence, one would be rather closed minded.
If one chooses the phrase "practically useless" there leaves room for investigation.
However, for practical purposes, the human mind can only absorb so much raw data in a given moment. There is a scientific limit. As ADV increases, the minds ability to correctly discern raw supply and demand through the use of level II will be be increasingly challenged, the likelihood of error therefore increases.
High % profitable set-ups, do not tend to occur, if the mind is overwhelmed.
If KymarFye, has found efficient high % probability set-ups in such a complex environment using level II... then KymarFye has quite an edge indeed.
This trader agrees... discovery, investigation, and open-mindedness are key elements to any trader's good health.
-- Z
Some people see some things clearer than others. The way I see it is that the volume of a trading vehicle compares to the size of a crowd. The greater the volume the more challenging it is to recognize the smaller details. With huge volume you gotta give your conclusions more room, where as some things are quite obvious in the thin stuff. Then again it's easier to manipulate a smaller crowd. Pros anf Cons.....it's in your vantage...regardless, all I seek is truth(prints) and how they may come about.
Im not a Nasdog trader, but am very interested in the whole "poker scenarios" of trading, so here's my two cents on this one. If the MM throws a huge bid/offer at the current bid/offer, you would generally assume that to be a head fake, especially on a large volume stock. Why do I think that? There's very little benefit for him to "show his hand". If the MM is really interested in accumulating the stock, like for a client, he could silently buy/sell shares at the market without chancing a small runup in the stock.
Posting size offers the MM little benefit and the majority of the time you should expect a head fake. Of course, this what you would GENERALLY EXPECT, and not true all the time. My two cents.
Jamming you are pretty much correct .
After 3 years of watching level II I still cant read it for dog doo.
However I feel lost without it when I trade.
Its the market makers with little size or INCA that just sit on the bid or ask that make the difference.
The big sizes on the bid or ask are more meaningful in the last 5 minutes for those Day Traders closing out positions.
Think if you are short and you have huge size on the bid and the ask melts away
After 3 years of watching level II I still cant read it for dog doo.
However I feel lost without it when I trade.
Its the market makers with little size or INCA that just sit on the bid or ask that make the difference.
The big sizes on the bid or ask are more meaningful in the last 5 minutes for those Day Traders closing out positions.
Think if you are short and you have huge size on the bid and the ask melts away
Quote from musicman:
Its the market makers with little size or INCA that just sit on the bid or ask that make the difference.
Thats pretty much what you would expect as well. An MM who wants to buy or sell needs to get in the market, so they should post 1000 shares in order to start accumulating it. Smaller than that would never allow them to accumulate enough stock for their clients. If they really had less than 1000 shares to buy/sell, they could do it at the market in most liquid stocks.
Any time an MM comes in showing size, watch the ECN's for the opposite reaction. A good sign that the MM's are throwing a head fake and dumping/scraping up stock through the ECN. My two cents.