t/a and level 2


When Nasdaq scalpers make 200 or 300 trades per day, how many cents per trade are they generally trying to make ?


Ray, Thanks for the comments.


They will be using three level 2 screens side by side.Typing frantically all day long,because everything they do is hot key'd into the key board.The first major move for large profits is the open but after that shooting for 20c-25c runs with 10c -12c stops is common place.

Have you ever seen a stock bounce off the whole number and then get stuck in that 18c-30c area.You could argue that that is all the scalpers at work.

When stocks were high in price the volatility was great then believe me the day zoomed by and you were surprised at the number of trades you did.However the execution costs were a big chunk out of any profits.Plus the fact like any trader you made some mistakes andn that would also hurt your pocket.

So as prices fell it became more difficult to carry out this style of trading that's why i changed and put a t/a slant into the picture.This meant that you only looked for a small number of trades but used level 2 scalping skills with tight stops to enter,exit, manage and read the position.It therefore meant that your risk/reward was better and hence your bottom line was better.

Most scalpers have got there by being chart readers in the first place so by putting both together i would argue they have the best of both worlds.

Now that the market has picked up somewhat this year some stock prices have increased dramatically and this has given a boost to any scalpers wishing to get back in and practice their skills.This is particularly prevalent on the open.
This may sound like a stupid question, but I don't know the answer so I'l ask it anyway.
Can you get selective news scanners? ie just for the biotechs or say the pharms sector. Or is it a case of keeping an eye on all the news as it comes in?
Searching around has yielded very little so far.

The nasdaq charts unlike the uk ones are a lot more transparent and work for me.
UK news has never worked for me, but I believe nas news which is used by a lot of people is a different kettle of fish.
Just out of interest the thing that alerted me today about a potential bounce was that 50% fib pullback on the Dow.


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Last week i had a UK level 2 screen showing some of the ftse's biggest stocks next to Microsoft and Intel's level 2 screen.

Try it sometime.What can i say "You cant be serious!" I thought the UK level 2 screen had developed a fault and stopped working but the trader i was with assured me that that was its normal speed.Dead slow or stop.

Contrast it with a medium sized Nasdaq stock from last week.It had gapped up, held the whole number on the chart and bounced on this support but the 2 main players were selling like crazy.That was the short because the odds were, support was about to get broken.However it needed lots of trades to go through to see exactly what was going on and how these two guys were responding.It did break and collapsed another dollar in ten mins.Without lots of trades going off it would have been impossible to understand the action.

This is the idea of putting level 2 together with t/a.Finding the set up and then cutting out a wrong move that many would make by understanding the level 2 screen.Volatility is a must.You cant make money if something doesn't move and you cant understand something if you've next to no movement on the level 2 screen.

A good example of all this is NTES.A stock that moves,loves t/a,look at those pullbacks in the attached chart, both fib levels.A big ax who drives the stock and plenty of movement on the level 2 screen to understand what he's up to.


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Hi Naz

Perfect trade example!

Good set-up if you have entered at 34 or even at 35!

I’ll be interested to know your exit point did you exit

at 17:30 at round $37.8 or you stayed in during the mini pullback thus continued the ride?

By looking at the chart this stock looks like it’ll continue push higher to $44 then shorting opportunity could arise and I could be the first to take it!!

I may even go long and join the bulls at $39!

Keep up the good work Naz.

By the way I have red all your posts with interest and have

decided to join the chat!

Hi Technologi,

To be honest i just switched in to it over the lunch period looking for stocks that might give something for an evening move.I tend to trade this stock and its friends in the same sector very often and i know its level 2 play very well.It had pulled back to a fib level over the lunch period and as i just looked at the right level 2 players, watched their play and bought some just as they started the run. ie just under$37.

I just shadowed the ax (the major market maker) on the level 2 screen all evening and he was never a true seller so neither was i.Then just sold out as we approached the close as i didn't want to hold over the weekend.

The entry was t/a/level 2 and managing the trade was very very simple level 2 work.

Nasdaq level 2 screens are now being offered for free-$15/month on the web.The level 2 action can be watched separately and then traded with anyone that offers access to the Nasdaq like IB,CFD's,internet account,maybe even a sb company.

By the way i checked out the Diamonds recently on my level 2 (Dow index tracking stock) the liquidity was great and the spread at times was very small and sometimes nothing.) The great thing was you could look at the level 2 screen and view how everyone wanted to play the index.


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Hi Technologi,

Yes i'm really glad you did well.I like your saying that trading without Nasdaq level 2 is like trading over the phone.

These chinese internet stocks are hot,hot,hot.

There is only one place to trade at the moment and that is the Nasdaq.
There was a switch today into AMZN,EBAY and YHOO.

AMZN was upgraded by CSFB with a target of $40 and also beat its numbers by 4c.

However the chinese lot were sold off because ASIAinfo missed by 4c.


I couldnt agree more, AMZN was a great trade today right from the open and I was in and out making 75c in just over 4 minutes.

Of course without a level II screen you would have been guessing as to whether profit takers were going to immediately make the price fall but they didnt and it was clear they were taking it higher.

Hi Paul,

Yes AMZN was good wasn't it.Another one that did well was ASKJ (ask jeeves) now up about 1,700% in the last 12 months

Re the chinese lot. SINA reported after the bell and this was the result.

SINA Sina.com matches consensus, guides higher (26.98 -1.09)
Reports Q2 net of $0.14 a share, in line with the Reuters Research consensus. Revs rose 203% to $26 mln
Haven't the SINA results set the Chinese INTERNET stocks alight eh!

Sina closed last night at $26.98 and at this moment its trading at $34.31.

Mind you the post above probably alerted many to be looking at it today.I hope so anyway.
With regards to SINA, 23% of the entire share volume traded in June has been traded up to 6.30pm today which is quite incredible really and is just over 16 Million shares traded.


Which broker do you use to enter a short position in NTES?

Both mine (I use 2 direct access firms) say NTES is not 'shortable'.

I wouldn't have taken a short position today but I would like to have the opportunity in the future should the circumstances arise.

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Originally posted by Naz

Nasdaq level 2 screens are now being offered for free-$15/month on the web.The level 2 action can be watched separately and then traded with anyone that offers access to the Nasdaq like IB,CFD's,internet account,maybe even a sb company.

Naz - I'm sure you have posted this info elsewhere, but I can't find it! Just where do you get free (or $15 pm) Nasdaq Level 2?
Hi Roger,

I believe that tradestation.com and esignal.com both let you get level 2 as an add on for a small fee.

Money.net will offer it free for 2 weeks.Medved quotetracker was also offering it free.Oldun, my broker wont let me short those stocks at the moment.
Hi Naz/Roger,

esignal appears to charge only a small fee BUT in addition there is an additional charge ($50 pm from memory) for what they call 'market depth' services!

Medved is free BUT you still have to sign up to a data feed and the medved L2 platform is not at all good. For example not easy to highlight the ax and I can find no way of displaying any island quotes in the screen other than screening the whole island book.

MBT will provide a L2 simulator which seems quite good. It is possible to get the demo then use the data in Medved.

Pointdirex has good data and trade pricing BUT their charting is cr*p so to get decent charts you have to sign up to Quote.com ($80 pm I think).

Ho hum! Why can't somebody put the lot together to give one quality package at a sensible price.

Perhaps they could also allow shorting of NTES so we can all join technologi in his style of trading.



I think you use IB. If you do, place an order to short NTES (do it at a silly limit price so you do not get filled if things have changed) and you will get back a message telling you the reasons you cannot short the stock.

You can short NTES up to 10,000 shares with PointDirex who are also well priced on trades being $5 or $10 per round trip.

RogerM and Oldun,

Nasdaq Level II data on esignal costs me $10 per month only and I think this is linked to the fact that I have an IB account.