Why Nyse stocks ?????

Originally posted by dgabriel




Specialists and MMs with a deep book will push a stock over an important s/r level when they know they can immediately trade out at a profit.

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This is a key line here. Specialist will push a stock....

think about that rule again on the NYSE. The Specialist can't buy on an uptick or sell on a downtick. Meaning he move the stock himself --all he can do is be looser on his bids/offers trying to encourage others to.


That means if the price is 50.00 bid and 50.10 offered and the specialist if can't sell the 50.00 bid or buy the 50.10 offered. He has to go inbetween. For him to get long he has to have a 50.09 buy and he can make sure he is the buyer at all price levels below that but he can't force the uptick .......somebody else has to.

If he wants to sell he can't hit the 50 bid. he has to be at 50.01 or better so that it is an uptick so that he can sell.

Specialist has to ALWAYS go against order flow




Market Makers on the Nasdaq aren't forced by this rule. They can sell on a downtick or buy on an uptick. That is one of the reasons I can't hold a .05 stop on NASDAQ stocks that aren't in the NAS 100 list. I can easily have it go .20-50 cents against me due to other market makers backing away (they aren't forced to be a buyer at specific price levels like the specialist is required to do).
Now somebody will say that's great take advantage of it. Problem is for me to take advantage of .20-30 price moves means I am taking on 2-10 times the risk if I do the same size that I can do on NY.


Robert
 
I meant MMs only pushing a stock through a level, but was thinking about both when I was typing. My mistake for rushing my reply.

NYSE stocks can take abrupt jumps when crossing over s/r levels and that's why I never place a market order when they approach a level or have a market stops
 
First of all I would like to say I have never seen anyone doing what Praetorian2 does.

The guy is without a doubt the best bottompicker I have ever seen, as no one else I know trades what many consider to be a suicidal set-up (or at least nothing more than a once in a while thing) and does so well with it.

Yes, you will have a lot of stop out's and a lot of small losses but it is the big swing in the end that makes it worthwhile. You have to admire someone who probably lost hundreds if not thousands of dollars on the stock yet still keep on hitting it with size until he makes it all back with one big swing.

When I read Praetorian2's posts I see literally the total opposite of myself as we believe in completely different things, I always make sure I get sufficient sleep and I never drink before a trading day, I get in the office for research on time and I spend hours after hours after work. I rarely hit it big but make up for it with consistency, yet he makes up for it with a ball that is probably 5-10 times the size of mine right now with large concentrated positions like this.

Now don't take this as an insult but I have always believed that my way of doing things is the RIGHT way (not the trading style but the way I respect the market and give my 100% to it), but in the mean time Praetorian is far ahead with nothing more than a laptop versus 4 screens I have and (at least compared to most others) relatively minimal effort. This is almost exactly what one guy on my team wants to do but I told him it is impossible (he shows up late frequently because of late night parties and basically just picks bottoms). I pointed him to the seven figure performers at our firm and showed him how they come in to the office at 7AM every morning for research, how they stay late most of the days for more . . .

Something is not right here, it SHOULDN'T be this easy (at least that's what I told him), I have been waiting for a nasty blow-up (like holding a five digit position followed by a multiple point halt that wipes out half an account, which is basically the worst nightmare of anyone doing this kind of set-ups and basically, what happened to my friend with KMI just a while ago, with "just" 4000 shares) for a while now, but NO ONE CAN ARGUE WITH THE RESULTS, as the guy just keeps on winning.

I am going to give the address of that chat room to two of the guys on my team who LOVES bottompicking and I hope they can learn something from the master, in the mean time I still don't believe that someone with this level of work ethic can beat someone who dedicate himself to it over the long run, we will see where we are a few years from now, but in the mean time I have a LOT of catch-up to do.

Good luck, if you eventually get to 500K a year doing what you do now it will be one hell of a success story. Regardless of what happens there are things you have done that I would never ever have dreamed of, like getting caught long before the 9/11 and opend the day with a massive loss only to turn it into one of your all time best weeks by going long again (and if I remember correctly the market didn't go straight up from there, it went down even more next day or so before the hard bounce).

Here is hope to a great week to all!
 
Originally posted by rpc
From what I have read on this thread, it appears that putting on large positions on the NYSE is easier than doing the same on the NASDAQ. Now there has to some large traders on the NASDAQ also, so how do they go about putting on the large orders? Is there a size limit on the NASDAQ you shouldn't go over? If a stock presents itself as BMY did but, was on the NASDAQ what would be the max position a trader could put on knowing they may have to get out quickly? (I know each situation is different but I am curious as to the general methods that a large trader may use when on the NASDAQ.)
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Large traders usually call MMs and 'work the order'. That is they negotiate a price, basically asking how much the MM can provide and at what price. Obviously the higher the volume, interested in, the higher the discount from the present price. In this way the MM then takes the risk and uses his skills and resources to complete the order. Their objective obviously is to make money by getting the shares less (if customer going long) than agreed to price. This is the process that large traders (mutual and hedge funds, etc.) use.
 
the question to ask is IF he (p2) is doing so well with it, then HOW does he do it? or better yet, how is it done.
if you refuse to believe in a god given gift of the trade (as i do) then what mechanism(s) in the market permit his success?

instead of imparting supernatural talents to the trader, let's look at the market. instead. what is it about
market dynamics that would allow this strategy to produce successful results?

my gut tells me (hehe) his tape reading skills are not useful or accurate other than in a very general
way. (afterall, he even claims just a "dumb guess"). so lets assume this plays no real part in his success.

i'll bet you it's something very simple, just a few factors processed subconsciously that anyone
could reproduce if willing to take on the risk. "gut feels" are nothing more than patterns recognized
subconsiously and acted upon. a little introspection could shed some light on this but god forbid then we
couldn't claim these delightful mysterious "talents" if we reduced them to a explicit set of simple rules.

:-/


________________________________________________
FREEZE TURKEY!!!
 
I just saw this old thread. I see that this is a recurring theme with P2's "style."

http://www.elitetrader.com/vb/showthread.php?s=&threadid=2074&perpage=6&pagenumber=1

I value your incessant search for the truth - I believe that you are a scientist at heart, if not by (previous) profession.

However, I do know that there are people that act on instinct and are very successful. For example, even in a "closed system" like Chess, where exceptional analytical skill is a priced possession, there have been exceptional players that will tell you that they don't analyze much and simply make what appears to be the best move of the given position. They can't really tell you how they know - they may give some generalizations, but if pressed, one begins to see that it really is based on instinct acquired over many iterations.

In some sense, you can see this even more clearly when comparing Deep Blue against Garry Kasparov - Deep Blue analyses something like 200,000,000+ positions a second. Garry, on the other hand, may analyze a total of ten to twenty positions per move total. Yet, his tremendous "experience" (gut feel, whatever, these are nebulous terms for the scientist) allows him to face such a monster.

I do not doubt that P2 trades on "instinct." However, I do agree with you that underlying that instinct is a powerful "processor" (that is giving him some sort of strange edge - my opinion.)

I have not been around on ET long enough to notice if P2's GNP strategy works in all market types...But that may be the whole point, it is not so much this or that pattern for him is what "works," it is instead a well defined setup that brings out the best trader in _HIM_. I sort of keep saying this, but I believe you become successful when you find yourself in the market. I do not know if what I said above is unclear, but this is what I mean by it. I believe at the core of my heart that you need an edge to be successful in the markets, but as I explore the markets more and more, I am not convinced that this edge is not more than a "market situation" where the most powerful _YOU_ "shines through," (and because you are consistently profitable as a result of a conscious action, creates the illusion of an "edge") as opposed to some Platonic Mathematical truth(/edge) that lies "out there." I hate to be existential, but there is very little in the way of common (scientific) experience to draw upon (except Penrose's book - maybe)

BTW, I do not know if I believe (belive is a strong word, perhaps, a better word is hypothesize) this in Options trading...A more mathematically rigorous form of trading...

As an aside, there is a very interesting book by Roger Penrose called

"The Emperor's New Mind : Concerning Computers, Minds, and the Laws of Physics"

This book, although highly controversial in the field, may be a fascinating read for you (if you have not already read it :) ) - it was for me. It sort of hints at what has been debated about P2, and the human brain in general.

nitro
 
Originally posted by FasterPussycat
you want more from me? would you prefer i give brilliant comments something of this order....

"P2, you are the most unusual guy.
and I say it again, you really impress me.
only new member can ignore your track record.
I don't care how you do it, money talks."
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FPC, this demonstrates my point, you don't read this thread and you don't bring anything. anyone can read the thread and see who did add value and who did not. I will just hit the ignore button on you, no problem. have fun, we know your kind.
 
tnt, i'm here discussing the subject matter. i question the source of p2's alleged success (btw, has
his track record been confirmed?), namely whether or not it is largely "external" or "internal." i am
leaning toward external at this time.

i also think the evidence indicates that "instinct" can be rendered into an explicit set of rules, at least
in theory. is "instinct" largely a set of unexamined beliefs? i think so? then why in the world would
anyone think that an obscure belief system aquired in a haphazard fashion is better than
a detailed examination of the process is beyond me? however, i know from experience that these
opinions are not well taken by many (you?).

you term my comments not contributing anything useful to the thread, and you may be right. but
tnt, how are your comments any better?

"gee p2, i think you're a swell guy!"
"gee p2, you really impress me!"
"gee p2, i don't care how you do it, your results speak for themselves!"

well, YOU may not be interested in how he does it, but *I* am.

:-/


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if your "gut" is doing the thinking, then what is your brain doing?
 
I have mentioned as others that the GNP pattern p2 is using was discussed in length on ET when you are not a member yet. it is in the archive. that's why we know what he's doing, that he's doing it for a very long time and he's very profitable with and he's posting his trades..
do a search on GNP or GNP2 or just praetorian.

For my contributions, well, I am not even going there.

you may like or not the guy, understand him or not, but if you trade NYSE (or anything for that matter) and see what P2 does, you will have to be impressed unless you are so much a better trader. if you are, please, like P2 share your method :)
P2 never said he's a god. on the contrary, he keeps saying what he does is simple, he's young and he's a constant reminder for us older traders to keep it real. (I strongly disagree with the pro drink comments though).
Yep, probably you can't trade the way he does. I know I can't and I remember very few on the board who said they could. but I don't care. it's not a competition. I always praise anyone who makes money, because it's so difficult. it's a select club. if you are in it, you will soon realize how tricky what he does.

the 80% fail rate ? so what ! it prooves he does a great money management. Who can be up 200% with 80% fail rate ? yep I am impressed.. sorry.
but it's a math and odds games, it does not matter if you fail very often if you hit big gains.
well, i could go on and on. but like I said, this was already discussed.
The thread is about WHY NYSE STOCKS !!!
this is what I responded too, as well as P2 and others. you keep bashing P2 and others (me?) with an off topic matter. No wonder people are not nice with you (me?) you should realize that. I started nicely though but you did not get the message. others did, but you did not get the message. we can keep at it for while. I am interested.
Of course it's obvious you want to know how he does it :) but again, this was covered in full details on this board... in other threads.

tntneo
 
Let me try one post to answer the last few pages of questions, criticisms:
dgabriel: s/r levels on some NYSE stocks can cause unusual price swings when violated, because the specialist will exploit the conditions when they exist. I am sure many traders have seen NYSE stocks with an average spread of .1 - .2 for example, once it breaks an important level either way, will immediately be repriced by the specialist in that direction by .4 -.8 of a point, filling several thousand shares of stops - the unlucky ones - and quickly recede close to the breakout/breakdown level.

Specialists and MMs with a deep book will push a stock over an important s/r level when they know they can immediately trade out at a profit.

What do you mean "blow stops"? Do you mean stops triggered once price has broken through an s/r level? If so, then the s/r is rather well defined, "solid", contrary to your comment.

When I said solid, i think i was referring to the fact that 30 flat was a pretty damn strong barrier to get through. I admit, stops are blown all the time, but it's more predictable, and you can tell pretty fast when it's fake. Getting through 30 would be prohibitavely expensive because there was so much size bid there.

hitman: Thanx for the kind words. What I do goes against conventional wisdom, but don't say I never work. All weekend I was studying charts. I still get in usually at 7:45 EST. I don't need much sleep. I'm a product of Phillips Andover I guess. They trained us to be machines. I will eventually have to slow down on the drinking, it does take a lot out of me. I used to be able to do 6 nights a week. I now do just 3-4 nights. I never go out though until I'm prepared for the next day.

Fasterpussycat: I have the feeling that you'll just argue with me no matter what I say, so this will probably be my last post to you, but It's not just dumb guessing. I've traded this pattern every day now for over a year. I have at least 1000 times seen this in action. I know how to play it pretty well I believe. There is nothing wrong with being wrong 80% of the time if you stop out for a nickle loss. When I get it right I always make at least a point. I'm not just dumb guessing on the bottom. I have a good feel of what types of things make bottoms. When I think I see one, I buy, then stop out just below that. Pretty simple really. As I've said, trading is easy.

nitro/tntneo/limbo/hitman: Thankyou for defending me. I owe you. You guys obviously realize that if you come to this board, your goal is to learn something postiive, rather than criticize someone endlessly without asking any questions. Thankyou.
 
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