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Day trading NASDAQ Level II
Are you using Level
II? No? Still on Level I with your
broker? Or, don't have a clue?
Here is what you need to know if
you are going to be successful at day
trading.
NASDAQ provides three
levels of service for stock quotations on their otc system:
Level I displays the best
bid and the best offer for a particular stock. It was designed for
stockbrokers to give them a good general indication of a stock's current
market. But because of program trading and other fast market
fluctuations, this information may not be accurate for you.
Level II displays all of
the bids and all of the offers and the actual size of those bids and
offers from every market maker in a particular stock. It was
designed for broker/dealer firms to see what all of the market makers were
doing with a particular stock at the exact same time, and therefore much
more of a reliable indicator of a stock's true market and worth.
But, only in the past few years has Level II become available for use by
the general public, usually through other broker/dealers that specialize
in electronic day trading of NASDAQ securities. And this is a very
big deal if you are flipping NASDAQ stocks.
Level III does everything
that the other two levels do, plus it allows a particular market maker to
go into the system and change his bids and offers and size on the stocks
in which he makes a market. A market maker can make those changes at
any time, no matter what is quoted on Level I or Level II. So if you
have seen the price and size change on Level II right before your eyes and
for no apparent reason, remember that all market makers stay glued to the
S&P 500 Futures Contract price first and foremost. For more
information on that, click here.
Most day traders now use Level II
screens and pay special attention to what ever GSCO, SBSH, and MLCO
are doing in their stocks. But the best four letter symbol that the
most profitable day traders use is not even on a Level II screen.
And there is only one firm in the world, whose entire research effort and
day trading research is based on it.
We are the firm. The symbol
is PREM (@PREM, $PREM, PREM.X, $SPS,
$SPINX).
Want to know some more NASDAQ Day Trading Secrets? Then
click
here.
Want to know which Level II Market Makers we watch? Then click
here.
Looking for some more Program Trading Indicators? Then click
here.
If you have comments or suggestions,
please email us at:
info@programtrading.com |