Trading the NYSE intraday

first of all the NY specialist is NOT out to get you. don't forget when there is a move in a stock you a probably the last in line behind people in the crowd. it isn't the specialist just trying to screw you and your order. its the guy in the crowd with 500k to buy that screws you when he gets in ahead of you. they move the markets not the specialist.

reading the quote is not as helpful a tool anymore because of the move to decimals. too many 1x1 quotes nowadays. reading the prints on the tape however continues to be a good tool. you can hide size on the quotes but not on the tape.
 
trading groups has been my style of choice lately. mainly oil service(esv,slb,do...) and home builders(bzh,phm,tol...) look for the laggard.
 
I read a couple posts that said to avoid IBM because of the specialist. Personally, I don't think IBM is that hard to trade, and the specialist seems fair. Never have I had a problem regarding execution; even when going short when IBM was downtrending.

The stocks I do have a problem trading are MU APC APA. The MU specialist makes it almost impossible to daytrade the stock. Multi-day trading with it isn't easy either as it just doesn't seem to trend like other stocks do.
 
reading the quote is not as helpful a tool anymore because of the move to decimals. too many 1x1 quotes nowadays. reading the prints on the tape however continues to be a good tool. you can hide size on the quotes but not on the tape. [/B][/QUOTE]

This is a powerful tool to trading the nyse. Learn to read the time and sales
 
Yes, the prints mean a great deal... bit I still think there is scope for a combination of bid and ask size with print action... often there is information contained in the combination of information, particularly for thinner stocks...
 
The combination of information paints the most complete picture, especially on a thinner stock.

Bid and ask size don't mean as much on a heavily traded stock, where only a small percentage of the days total volume will have been posted by the specialist. On a thinner stock one can often see the quantity shown in time and sales simultaneously disappearing from the bid or offer.

As was pointed out here earlier, some stocks are just very difficult to read. For some reason the specialist's behavior is not always consistent, or is misleading. In one stock I watched for awhile he generally showed size on the bid when the stock was going down, and size on the offer when it was rising. Trying to pull in buyers or sellers to help him move the stock he had to buy or sell. Reminded me of liars poker.

Keep searching. I have found a stock where the size posted on the bid and offer has integrity. I also watch the prints, are they green or red? What is the trend? What about their volume?

Is the stock/sector strong or weak for the day? I love to short w/bullets, but if the trend is up I won't get much, it's more forgiving to play the long side, less risk.

What is the overall market's momentum? If the market slows down or stalls, how does my stock react? Does it slowly roll over, or do I need to anticipate and be quick?

It's kind of like being with a woman... if you spend your time with one stock you can get to know it very well. If you get along, great! If not you're better off to find another one.

Yes it can get boring at times but by watching and being available you learn to recognize a good opportunity and act on it. I like to trade small lots often to get a feel for the action and keep my head in the game, and then take a bigger position or add on when a low risk situation presents itself.

Candle's opening questions are great, I wish someone would answer them all :)

Swing (a misnomer, actually a daytrader)
 



[*]the use of bid and offer sizes in deducing direction

Depends on each specialist....as noted above the thinner issues are easy to deduce, the more liquid is harder.....If you are unsure of which way a stock is heading, bid or offer 100 to 200 shares and see how quickly you get filled. If your bid gets snatched up immediately, there may be a seller trying to grab stock quickly and vice versa for offers

[*]the significance (or otherwise) of block trades

Reuters allows you to have a seperate field that only records block trades going off.....I would keep an eye on block trades that go off in a stock at the end of a big move down or up.....this could be the clean up print and your signal to exit or flip the other way.

[*]lower average volume stocks versus higher average volume stocks

Thin stocks you are better off trading with a thousand shares if you are micro scalping....You are able to nx out of the trade if it goes against you if you are leaning on size. Trading size in the thinner issues may be painful because when its time to get out, you will get your legs chopped off from all the nx orders going off and eating the size.


[*]the efficacy of technical analysis in NYSE trading

Intraday patterns and TA really don't manifest much for my trading in listed. I basically read the tape and use basic support and resistance and the spoo/premium ticker to enter and exit trades. The only time I Really Use technicals is before the open: looking at the dailies and seeing if there are any patterns forming, breakouts etc. macd divergences....I keep it pretty simple.

[*]NYSE sector trading
I sector trade quite a bit- example: scalped the short side of all the energy stocks yesterday- ila, duk, rei, aep, and bhi. I will sometimes quickly look at the index for the sector to see how it corresponds with the stock I am in. I trade the drillers everyday for example, and I know who the leaders are and who the laggards are. Watching the sectors and knowing which ones in them will move the sector is very helpful.

[*]how specialists shake traders, and how to differentiate a fake shake from a genuine reversal
This can only be learned by trading and watching each stock individually. keep a note book or make a mental note.....We can start posting on this thread which stocks we trade often and his patterns. In general, if you are short a stock and (keeping in mind what the spoo is doing) you are involved in a big move down today and it looks like the specialist is cleaning it up and you go to cover.....if he fills you and the next couple prints pretty genreously (meaning that he has ripped the stock down say .80 already and he shows a bid for 20000 at 20.00, and evveryone runs to cover, If you get filled at 20.01 and a lot of stock goes off, then more stock goes off at 20.05, then more stock goes off at 20. 10, and stalls out there, I would get a ticket ready to sell it again. Think about it...If the specialist got long down at the figure, why would he take stock from you and allow you to cover at such a good price? He could and has filled me .20 higher then .40 higher very quickly. Why is he giving you such a good fill? because he is still short and picking up a little more stock....he's not going to let it trade to high to prevent the momentum from really turning on him. Another example: AEP yesterday: can't remember the exact prices but thescenario was this....I was short and he was trending down and not bouncing much at all. He keeeps spreading the stock down. then he reaches the figure and spreads it 1.00 (eg. 43.00x 44.00 everyone who is short like myself is saying thank you lord! but he prints lets say ony at 43.90. Now everyone is saying oh crap! He was just baiting us with that quote to get others to sell more so he can get cover and get long (this is a trick the specialist uses a lot....especially on ones where an event is occuring like sgp the other day and the stock is spreading .50 and 1.00 both ways.) So what happens? The cattle runs to cover hoping to get out at a decent price. The specialist lets me out at the figure and lets others out .10 .20 .30. This stock has been ripping down, could easily have printed 44.00 44.25 44.50. 44.60..........never goes past .30 (this is from memory and not exact prices) and I sold again and was able to pick up an additional .50 as he traded and ripped it past the 44.00. Point is: cover when you have to, but watch and see what the fills and prints are like. I always have in my mind a contrary scenario against the rest of the cattle stampeding (usually so does the specialist). However, don't stick around in a stock and say to yourself (hey, I think he is still short). you may get squeezed beyond belief. Cover and tape read and get back in.

[*]preferred price ranges
Know which stocks trade in small ranges= small point moves for you

[*]ultra short-term scalping versus intraday swinging; high probability versus profit maximisation?

All depends on your personality and style. I know both do well. I dabble in both


[*]specialists to avoid

Brokers in general, Tech (MU TXN). CBE, BRl, LLL, DDS These stocks are very profitable very quickly when you are on the right side, but when you are not:ouch

[*]arbitrage techniques

Trying to find out more on intraday pairtrding myself....threads on ET are too general.

[*]trading with the specialist on imbalances
Depends on the situation (damaging event or downgrade or what not) whether to fade or not.

[*]psychological barriers to making the transition from Nasdaq to NYSE

Never traded NAS

[*]if it is the case that institutional activity is more prevalent within NYSE trading, will Summer institutional vacationing lead to relatively better intraday follow-through on Nasdaq stocks this Summer?

Who knows?
More...
 
I read a couple posts that said to avoid IBM because of the specialist. Personally, I don't think IBM is that hard to trade, and the specialist seems fair. Never have I had a problem regarding execution; even when going short when IBM was downtrending.
More...

IBM isn't difficult because of the specialist (true in general about any NYSE stock, but there are exceptions) IBM is difficult because it is a highly optionable stock, and players are constantly hedging themselves with the common, which means that you are the last one to know what is going on. This is true for all highly optionable NYSE stocks - IMHO, stay away (from directional trades) unless you want to play basketball against Michael Jordan.

If I were starting to trade NYSE today, I would start by:

1) pick a stock above 30
2) pick a stock that trades above 1 Millions shares a day
3) pick a stock in the SP500
4) pick a stock that moves with the spoos (prem)
5) make sure I had my squawk on, and watch every tick that goes by for a month on....

I would pick GE during dead zone. Try to get the price action here, and you will have mastered an important skill (You will be bored to tears, but noone said this was a glamorous job.) At the same time, work your way out from this, that is, trade GE and a couple of others (e.g., GE, JPM, BMY, HD) during the open using OO orders, and then the close.

This is already alot, but if you are already used to watching more than one thing, then doing what metal1 suggests is _EXCELLENT_, and if you do it the way that Hitman does it, even better.

Throw in a pair or two after all this, and well, you are trading now...

nitro
 
Thanks Nylord-for someone who has traded 90 % Nas, and am just starting to learn about the ins and out of the Nyse, your post was very educational-keep it coming
 
Until recently I have focused on the Nasdaq. I have added many NYSE stocks to my screeners and have started trading them via Island. I have sent some orders directly to the NYSE (During emergency break glass) but otherwise I post to the Island. Usually I get hit within a penny of the NYSE Best B/A. All things being equal I would rather post to Island as my broker passes on the rebate to me but should would welcome comments on using the ECNs ( Island).

Thanks in Advance.
 
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