Level 2 Quotes

The Importance Of Using Real Time Data In Our Trade As A Trader

Have You Ever Wondered What To Do During This Uncertain Time?

It has been a tough week with the Dow fluctuating between 12900 and 12500. The Market seem to up a day and down in another.

There are no clear direction. Market Watch reported that the market has had the worst first-eight-sessions-of-year slide in 17 years. One of the largest Bank in America….Citibank is in the red with a quarterly $9.8bln loss. Country Wide need rescue and being acquired by Bank of America.

Headlines like this were not common during the last don’t know how many years ago. In case you are not aware, this is a serious situation. If you are an investor, you need to be vary of the problem that exist now. Be prepare to cut your losses if you need to.

On the other hand, you may find that the unpredictable market has created a new breed of profit seekers. These ‘high risk’ traders are making profits quietly behind many investors’ back. They go for the kill during this volatile market to make tons of money.

They have the necessary skills and tools to make the kind of money during the uncertain market. These are the survivors. They know that only the fittest trader who use the most up to the second real time data are going to whack the market time and over.

You can’t just get the  yahoo stock finance stock quotes and hope to make some money out of it. You too can’t get yahoo stock quotes and financials to match them. You can’t use google finance too. Those are old stories in this market right now. You need something more powerful than that.

You need to understand technical charting and being able to scan stock market real time. This is the secret to survive in this market right now. There are so many hidden secrets in the Level 2 Quotes that you will understand on how does data compression work.  Once you understand how the Level 2 Quotes work, you will not have guessing work anymore. You will have better confidence to trade and make the kill yourself. Check it out on the Level 2 Quotes .

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January 16, 2008 Posted by | Level 2 Quotes, Level II Quotes, Options Trader, Real Time Data, Stocks Trader | , , , , , | 1 Comment

How Do You Scan Stock Market Real Time?

Is it a tough job to Scan Stock Market Real Time?

Answer is…… NO!

As long as you know what to do and where to find it.

I was speaking to a group of Traders during a seminar on Options Trading last week here in Kuala Lumpur. The audience comprise of novice and some experience Traders. Some of whom have more than 10 over years of experience in trading and investing in stocks. A couple of them had been trading options too.

I had a surprise question at the end of the seminar. One of the seasoned Trader, Patrick asked me How Do I Scan Stock Market Real Time? I was taken aback by his question. I thought to myself for a second before I responded, “Er…. Have you heard of Real Time data from Nasdaq?”

“You mean you can buy stock data?”, Patrick responded. “Oh yes you can subscribe it from Nasdaq”, I replied. “The Nasdaq provide the stock data at less than 15 Dollars a month. It is called the Level II Quotes”. The rest of the crowd responded in surprise. …. “Level II Quotes ?”

It was unbelievable! I mean I am not the only one who found the Level 2 Quotes 2 years back and I know I am not alone. This could be one of the most important data available to any serious Trader out there. It is the window to a comprehensive supply and demand data in real time. How can you tell where the stock price is heading if you don’t know how much of the stock is in demand and in supply?

My personal experience has convinced me the effectiveness of this tool in my trading decisions. I would not commit any trade without first seeking the confirmation from this Level 2 Quotes.

I have written an indepth article on How Level 2 Quotes Work. In that article, I explained the technicality on how datas are used to make a trading decision.

January 13, 2008 Posted by | Level 2 Quotes, Level II Quotes, Options Trader, Real Time Data, Stocks Trader | , , , , , | Leave a comment

“The Best & Worst Months For Stocks”

Have you ever wondered whether there is such a thing like “The best and worst months for stocks”?

I think the easiest way to explain is to look at it from the perspective of an Investor and from a Trader point of view.

From the perspective of an Investor, there is a usual trend of a ‘Santa Claus Rally‘ towards the year end. The heat accumulates from the mid of December although in the recent years, the market players tend to catch it earlier and they start as early as end of October.

Why is this Santa Clause Rally important to us as an Investor? The explanation is because most working class will get their bonuses. They will somehow park part of their fund into stocks in anticipation of a stock rise. When everyone starts buying, stock price rises. You will get the Santa Claus Rally going full stream towards the end of the year.

The rally is added with more power with the year end ‘Window Dressing‘ by companies which had their closing in the end of December. In order for the CEOs to have a better presentation in their AGM, the usual practice is that they would want their company stock price to close as high as possible at the very end of the month. This will in fact drive up the stock price as well.

The ‘October Effect‘ which is self explanatory happen in the month of October. It was the psychological expectation from the previous major catastrophic market crash that prompted the market players to be extra careful on October. Majority of them have the fear of history repeating itself. They know about the October 1929 which lead to The Great Depression and the October 19, 1987 which lead to a 22.6% plummeting of the Dow.

For a Trader, they trade in a different kind of environment. Although they would still observe the Best & Worst Months For Stocks, they know what they need to do in order to capitalize on it. Their priority is to trade with the current trend, the current momentum and the current wave.

They use Charts extensively to determine the trend. Some of them will use up to the minute chart to determine the best momentum for entry and exit. To the Traders, a single cent difference will make a big difference in their trade over the long run because they trade according to the market fluctuations. They look for the lowest price to buy and the highest to sell.

Chartist use support/resistance, trend lines, channels, break out of triangles, MACD, Stochastic, ADX, Volume, MA and many others to determine their decisions.

The next best level to spot an opportunity is the Level 2 Quotes. It is the window to the number of supply and demand for a particular stock. It comes in real time which means the data are current and you will have an insight what the market makers and the traders have come to a agreeable price. I feel that this is the highest level of data available to any Trader to capture the potential profits.

To me as a Trader, there is no Best & Worst Months For Stocks. I don’t look out for the best and worst months. I rely on the Level 2 Quotes and the Charts to deliver the potential profits.

January 13, 2008 Posted by | Level 2 Quotes, Level II Quotes, Options Trader, Real Time Data, Stocks Trader | , , , , , , , , , , | Leave a comment

How Level 2 Quotes Work?

I was introduced to Level 2 Quotes more than a year ago. Since then, my average profit return has soar and my bad entry has reduced significantly. It has time my entry and exit with almost laser sharp accuracy.

Level 2 Quotes or better know as Level II Quotes or L2Q is uncommon in the Traders’ World. Every Fund Manager, Market Maker, Serious Trader and all other Professional Traders have them on their screen when they trade. It just can’t be like a car without a wheel.

The Level II Quotes is divided into 2 sides. On the left side is the Buy Orders queue and on the right side is the Sell Orders queue. Below the Buy Orders are divided into the number of the shares bid and the bidding price. The Sell Orders column are divided into the number of ask shares and the asking price. At each and every price level you will be able to see how many Bid and Ask are in place to trade.

Before the start of any trading sessions, the Buyers and the Sellers will place their bidding and asking price together with the number of shares they want to trade. During the opening bell, new Buyer may offer a Bid higher when they are bullish about the stock.

This process will match the Ask price from the seller. The transaction is considered done.

If the next buyer wants to own the stock, he may consider taking on the next Ask price from the seller. From the point of view of the Level 2 Quotes, technically the number of queue on the Bidders will increase where as the number of Ask on the Seller’s side will decrease.

Eventually during the active market activity, the Bid price level should increase in terms of buyer who has yet got their orders filled. But on the sellers side their asking price are being matched up actively. Since the activity is being computed in real time, the figures move in the matter of split of second.

As time pass by, if the market is Bullish on Stock A, the queue for the Buyer side will expand and the queue on the Seller side will subside. From the perspective of a Trader, the scenario poses a good opportunity to enter along side with the Bulls. Like wise if it happens otherwise, he may consider doing the opposite, the Short.

I did not use tool as the sole decision to trade. I used this tool to time the best entry level and exit level to maximize my return. Normally after doing my fundamental research on a Company, I would then proceed to the price chart to check on the price trend, support and resistance level and also various indicators such as MACD, Stochastic and Price/Volume.

Trading is a complex process which can be simplified when you know how to break it down to parts. Using Level 2 Quotes is one of the important parts to determine whether to make or break in a trade.

December 9, 2007 Posted by | Level 2 Quotes, Level II Quotes, Options Trader, Real Time Data, Stocks Trader | , , , , , , , , , , , , , , , , | 1 Comment

Why Level 2 Quotes Are Important In Your Trading Decisions?

 

There is not much understanding about Level 2 Quotes in the form of print. The reason is because of not many retail traders like you and me are being expose to this Level 2 Quotes. The fact is that you won’t know what you don’t know!

The Level 2 Quotes is sometimes known as Level II Quotes or L2Q in abbreviated. To the Professionals traders, the L2Q is no stranger to them. All the Fund Traders and Professional Traders use them to determine their trading decisions. They use it extensively to beat the market every time they place a trade.

How does Level 2 Quotes work? In principle they show the supply and demand of a particular stock. When you enter a ticker in the ticker box in the L2Q, you will be shown the number of buyer at a certain price from the lowest queue to the transacted price.

From the Seller side, it will show how many shares and how much these sellers are willing to part at that price. With this information in hand, you can determine which side is stronger. Usually the side with the most queues will eventually overcome the side with fewer queues.

It works the same way like a tug of war game. If the left side has 30 participants and the right side is with 10 participants with the same average participants’ weight, 99% of the time the left side will trump the right side.

When you have the L2Q along side with you while you trade, you will be able to scan through how many buyers on queue are willing to bid at a price say at 45.88. You will also know how many are bidding for 45.87 and the list goes on and on.

Have you ever notice why stock price keeps falling from the price chart? You will be able to see it very clearly from the Level 2 Quotes. 80.9% of the time, the buyer side of the Quotes show that there are very little buyer where as on the seller side is overwhelming.

Those who use the L2Q will have the advantage; they know that the stock price will keep falling until the buying momentum start to swing in. Until that happen what do you think they will do? They will sell even faster. They will not buy until they have a confirmation form the Level II Quotes that tell them the selling pressure has lost its momentum.

They are just following the momentum to get them the profit!

The Level II Quotes prowess is not being commercialized for the reason that most Professional Traders do not want you to know of its existence. ‘The least the trader knows the better.’ This is a fact. Who would want to have greater competition when they are enjoying less competition?

It may sound unfair but in reality it is. This is how market works. I have stumbled upon this tool last year and I managed to increase my profit substantially by ‘listening to the market’ while I trade.

December 7, 2007 Posted by | Level 2 Quotes, Level II Quotes, Options Trader, Real Time Data, Stocks Trader | , , , , , , , | Leave a comment