When are level II or DOM orders placed?

[JumpOff]

Hi,
I have a basic question about the use of Level II order screens. - Can you tell (or guess at) what percentage of orders are parked on the system in advance? How many people use a limit order to enter, stop loss or take profit, according to some plan they have - I'm talking about orders that are entered 5 minutes to several days in advance. -And how many of the sales that flash across your screen are people hitting a button that effectively says, "buy (or sell) now at the market?

Thanks,
JO

 

[Trader333]

Level II is primarily used as a means of determining the intention of Market Makers who are responsible for "Making" the market by offering to both buy and sell stock. Reading their intention is not an easy task but it can be done. When many people hit market orders it is evidenced by what is happening on Time and Sales more than it is by the level II screen.

I have found it useful to reduce risk at market entry and I only know of one other person who uses it in quite the same way as I do. Naz is a good person to ask questions about Level II but he does use it in a very different way to me.


Paul

 

[JumpOff]

So if I took a couple of screen shots of Level II (or Depth of Market for futures), and compared that with a report of time and sales, I could get a rough idea of the percentage of sales that were orders that got hit, and what percent were last minute market orders. ?

I know that many traders keep their entry, stop, and limit orders only in their head.
JO.