I never buy a stock after it makes a new high. I always get good prices right in front of the buyer and that is my stop. The only stock I buy at the highs is 100 shares when and if the stock is bidding the high of the day. That's not really part of my position though, it's just there to keep upticking the stock.
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TAPE READING (chat room cont.)
- Thread starter shortseller
- Start date
I never buy a stock after it makes a new high. I always get good prices right in front of the buyer and that is my stop. The only stock I buy at the highs is 100 shares when and if the stock is bidding the high of the day. That's not really part of my position though, it's just there to keep upticking the stock.
Quote from Don Bright:
I may disagree a bit with my friend Maverick about the NYOB. I like to see where the larger orders are sitting, and since they "can" hold the orders a few seconds, there is generally less "bluffing" going on. I'm sure that Mav has developed his tape reading skills over the years, and looks at what he feels is best for his trading. I do agree that seeing time and sales is usually worthless.
We spend an hour or so in class showing how to identify buyers or sellers that are not being reflected on the quotes, L2, NYOB, ECN's etc. Many of these are computer generated trades that pop in using "if-then" statements....i.e. If bid goes to 1.85 on Nov 30 calls, then pay 30.95 for stock IOC, etc.
We can "fish" by entering small bids between markets, we can fish by attempting to pay the offer, while getting filled at a better price (thus identifying an active seller), etc.
There is a lot to "all encompassing" tape reading...I try to spend a few hours with the boot campers verbalizing what I'm looking at, and, even though they may take a while to do it themselves, they generally seem to be very appreciative of the demonstrations.
It really is an acquired "art" / "skill" - but if you don't know what to look for, then you can't really develop your own abilities.
I watch every trade, every bid/ask size change, specialist "intervention" when "masking" larger NBBO bids/offers, and keep close trace of the PREM/DISC to FV of futures....look for the round numbers (bids/offers)...watch those (not too smart) guys who insist on selling in front of big offers (thinking that they have a built in "stop loss" - and they rarely get to cover at that price because the buyer will buy their .99 offers all day, then buy the point, then the shorts run the stock a nickel or a dime...it's so funny to watch.
Anway, back to my tape reading....
Don
Sorry Don, can't agree with you here. Open book is total crap. Those orders are mostly daytraders who will pull the bids and offers the second the size bid they are leaning on gets pulled. No large player is going to show his hand in the open book. That is why there is a specialist. He is there to help him work the order. Not the show the whole world that there is a large buyer out there.
Come on, think about it. Where is the logic here. Why would lay your hand on the table for the whole world to see. You wouldn't. No more then you would lay your cards down in poker and show everyone at the table your hand.
I could care less about all the daytrader's bids in the open book. I care about one thing, the institutional buyer in the stock who continues to step up with 100 shares and take out every size offer he sees.
Quote from Maverick74:
Sorry Don, can't agree with you here. Open book is total crap. Those orders are mostly daytraders who will pull the bids and offers the second the size bid they are leaning on gets pulled. No large player is going to show his hand in the open book. That is why there is a specialist. He is there to help him work the order. Not the show the whole world that there is a large buyer out there.
Come on, think about it. Where is the logic here. Why would lay your hand on the table for the whole world to see. You wouldn't. No more then you would lay your cards down in poker and show everyone at the table your hand.
I could care less about all the daytrader's bids in the open book. I care about one thing, the institutional buyer in the stock who continues to step up with 100 shares and take out every size offer he sees.
Mav could you please quit crusading and telling the whole world that all my bids/offers in the NYOB are fake....
Now I won't be able to fool anyone...
I think the NYOB can be useful but can't be trusted.... There are a lot of jokers like me out there...
mnx
Quote from Maverick74:
No spoos chart, only the quote. No charts! The rest of the space is used primarily for pre-market research. During the day, maybe have a news feed up and the web. Pretty simple really. All this crap about having 20 flat panels and shit never worked. The rule at our firm was, the more screens a guy had, the more negative his account was. The top traders in our firm kept it very simple. The more things you look at, the more it distracts you, including the internet.
Is this what your talking about when you say just the quote? Just a plain L1 quote sheet.
Quote from Maverick74:
Sorry Don, can't agree with you here. Open book is total crap. Those orders are mostly daytraders who will pull the bids and offers the second the size bid they are leaning on gets pulled. No large player is going to show his hand in the open book. That is why there is a specialist. He is there to help him work the order. Not the show the whole world that there is a large buyer out there.
Come on, think about it. Where is the logic here. Why would lay your hand on the table for the whole world to see. You wouldn't. No more then you would lay your cards down in poker and show everyone at the table your hand.
I could care less about all the daytrader's bids in the open book. I care about one thing, the institutional buyer in the stock who continues to step up with 100 shares and take out every size offer he sees.
I understand your reasoning and for the most part I agree but you can still find many players sending electronic orders to NYSE, therefore hitting the openbook with enough size to move the market or at least hold it for some time (when I say players, that includes short sellers, if you see what I mean).
Now, how much the openbook is gonna help is in large part relative to the stocks you're trading and the specific strategy you're running.
But in general I agree that big players will do everything they can to hide their game (when they have the time) and that relying on the openbook alone will drain your account.