Level 2 v Technical analysis

[theoriginalboss]

I am investigating Intraday trading (scalping). I am looking to buy and sell stocks within seconds/minutes using level 2. I have three questions and would greatly appreaciate answers to any of the three.

1) What are the main technical indicators that would accompany such a trading strategy?

2) Can I trade this way using only level 2 and no technical analysis?

3) What broker offer the tighetest spreads for UK equities?

 

[Trader333]

In answer to the above:

1) Impossible to answer as everyone has a different approach to this.

2) Yes but it is not easy as there are all sorts of tricks being played on Level II screens

3) Probably www.interactivebrokers.co.uk


Paul

 

[roguetrader]

3) What broker offer the tighetest spreads for UK equities?

Brokers don't offer spreads, they quote market bid and ask so the market makes the spread which would largely be a product of liquidity in the stock being traded, as such they don't really differ in this respect. This suggests you are interested in scalping through a spread better, an ambitious prospect.

 

[timsk]

This suggests you are interested in scalping through a spread better, an ambitious prospect.

originalboss,
Many people wouldn't have expressed this nearly as politely as roguetrader has - to put it mildly! Spread betting is where many traders start their trading careers, but it's not the best vehicle for trading intra day due to the spreads and bias. As some here will testify, it is achievable, but it ain't easy. That said, to adopt a scalping strategy using SB is next to impossible - I would have thought. Certainly, if you are successful doing this, then you're not just good, you're quite exceptional!
Good luck,
Tim.

 

[peto]

originalboss,
That said, to adopt a scalping strategy using SB is next to impossible - I would have thought. Certainly, if you are successful doing this, then you're not just good, you're quite exceptional!
Tim.

Agree. But to scalp UK equities on a seconds/minutes timescale using a direct access broker is also near impossible due to stamp duty.
Consider US equities, better spreads, no stamp duty.

 

[theoriginalboss]

Thanks for your advice above. Is it not feesable to scalp using cfd's? i have a good feel for level 2 in the UK, is it a different ball game in the US? Which US broker would be the best to use for scalping?

 

[peto]

Thanks for your advice above. Is it not feesable to scalp using cfd's?

Sounds like a better idea for the UK. Choose a Direct Access CFD provider (such as GNI Touch), using CMC and the like will be just as difficult as SB's but without the tax advantage. I speak only with experience of the latter, however, so I am unable to confirm the practicality of scalping with the former.

Which US broker would be the best to use for scalping?

I concur with Trader333 above

 

[lurkerlurker]

Consider US equities, better spreads, no stamp duty.

Good post, but have you considered whether the parent has $25k to comply with the PDT rules?

Also, futuresbetting and TwoWaySpreads have close enough to market spreads without taxes, if you insist on using a SB firm.