NASD Scalping Question

H

hapaboy

How quickly are NASD scalpers able to get out of their positions? In liquid stocks like AMAT, for example, what kind of slippage is common?

One scalper told me he is able to get out most of the time flat or take just a couple of cents damage. Is this common or is he the best scalper in the world? If it is the norm, I'd imagine it would be highly advantageous to scalp NASD over listed. Hitman, who trades listeds, is sometimes able to get out flat or with minimal damage, but not all the time.

Another question relating to this would be to ask why traders prefer trading listed or NASD - is it simply because they were trained to trade one or the other at their firms (perhaps their firms ONLY trade one or the other), or, if they have a choice, why they trade that particular vehicle.

Comments greatly appreciated.
 
I am more apt to take the trend players than to scalp. I look for trend plays during the day because I like to see a points add.

Scalpers have a unique talent and art. Many of my friends along with a few 23 year old market makers I know, look for the scalp all day.

I find scalping for the dime or quarter requires ultimate focus and requires balanced thought. These guys/gals trade up to a thousand times a day in the right market. They are both Nasdaq scalpers also.

I prefer relaxed trading and waiting for that confirmed spike up or dump. If you plan to scalp, make sure you have plenty of volume pumping through these players.

If your going with larger based size of shares , go with the players that are not so volitile to prevent whipsaws and limiting loses. Some stocks you might to start off with scalping are CSCO WCOM MSFT BRCD BRCM.

Scalping is great way of trading, just lots of work on this end.
 
Getting out even or with a few pennies loss maximum is de riguer on very liquid and relatively steady stocks like SUNW.

With AMAT you will be able to cut your losses to a few cents or less only say, 50 % of the time.

If you are really wrong and have the momentum against you it could take up to 10 cents or more, all depends on time of day, strength of the move, execution skills and time frame you are trading in etc.

BTW. I don't have a choice, I play NASDAQ or none at my firm.
 
In general, then, can it be said that given two liquid stocks, one NASD & the other listed, that a trader can get out faster and with a smaller loss on the NASD position (by being able to get immediate execution on an ECN a tad out of the market - with listed you can't see the level of the bids like you can on Level 2 NASD)?

Bachelier mentions a loss of up to 10 cents w/NASD. Listed could be far worse, agreed?

I've also read posts on other threads of very liquid listed stocks, like IBM, that suddenly have extreme spreads and the next bid down is very far from the last bid....

:confused:
 
Originally posted by Gold_Rik
If your going with larger based size of shares , go with the players that are not so volitile to prevent whipsaws and limiting loses. Some stocks you might to start off with scalping are CSCO WCOM MSFT BRCD BRCM.
More...

GIve me a break GOldRik.... BRCM for a new scalping minded trader worried about slippage? Oh nevermind you must be talking about the OTHER BRCM. Oh year there isn't one. I would highly suggest you leave BRCM off GOld RIks list.
 
hapa, it again depend on how many shares you want to trade.
1k to 2k is easy to get in and out on stock like AMAT.

SUNW move really slow, you should have no problem trading 10k shares.
 
Originally posted by Bachelier
Getting out even or with a few pennies loss maximum is de riguer on very liquid and relatively steady stocks like SUNW.

With AMAT you will be able to cut your losses to a few cents or less only say, 50 % of the time.

If you are really wrong and have the momentum against you it could take up to 10 cents or more, all depends on time of day, strength of the move, execution skills and time frame you are trading in etc.

BTW. I don't have a choice, I play NASDAQ or none at my firm.
More...

Just curious, what execution systems do you recommend for Nasdaq trading?
 
The reason the majority of scalpers trade NASDAQ is due to greater ECN participation. They provide quicker liquidity and confirmation than most listed securities. The exception to this rule are the QQQs or a few other heavily traded listeds that have constant ECN participation. Slippage can happen very quickly regardless of what stock your trading so be very confident with your hot keys and which routing methods to use under certain market conditions. There is not one routing method that is the most efficient for every trade pending market volatility so knowing how to work your order quickly is essential when scalping. I scalped for 2 years and made "ok" money but wasn't worth the amount of commissions I paid and the constant stress I dealt with everyday. I enjoyed doing it but found intraday and mostly swing trading much more relaxful and enjoyable. I have been swing trading for the last 3 years and have made a lot more money than the good ole' scalping days.
 
Originally posted by hapaboy
In general, then, can it be said that given two liquid stocks, one NASD & the other listed, that a trader can get out faster and with a smaller loss on the NASD position (by being able to get immediate execution on an ECN a tad out of the market - with listed you can't see the level of the bids like you can on Level 2 NASD)?

Bachelier mentions a loss of up to 10 cents w/NASD. Listed could be far worse, agreed?

I've also read posts on other threads of very liquid listed stocks, like IBM, that suddenly have extreme spreads and the next bid down is very far from the last bid....

:confused:
More...


Run some searches as this has been heavily discussed.

One thing to think about is usually the high volume stocks on the NYSE are usually the ones I want to avoid. I hear all the time how bad Listed trading is and I get an example of AOL or IBM. The top 50 NYSE stocks (with volume) I stay away from. There are wekk over 3500 stocks to choose and the majority are great to trade.

On NASDAQ if you trade anything other that the high volume stocks such as the NASDAQ 100 that you can be absolutely killed due to the lack of liquidity if you are on the wrong side of the momentum. the minority of NASDAQ are great but stay away from the illiquid ones.

Robert Tharp
 
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