Best Thread US day traders thread.

[Mr. Charts]

I said last night,
"Also those who like to think laterally and understand the relationships in the market might be interested in seeing what happened to Google when the YHOO news came out after normal market hours tonight."

I do hope some here thought about that and traded Google tonight when the EBAY news came out.
If so you would have got at least a chunk out of the $6 rise.............
Richard

 

[Naz]

Sometimes the hardest part is the beginning.If you look at the spikes on the candles at the beginning of the EBAY move its just odd orders going off.I just concentrate on where the body of trading is and stay with that.Looking for the signs that tell you the results are coming and which way the move is going to go. If you want to make things easier play the move when it truly tips its hand.Which will be the best idea with GOOG tonight.This in the past has been the real daddy of them all.

Here's what EBAY did.

 

[layman]

Naz,this is the best trading strategy i've seen on T2W.

You can make 100's of points very, very quickly! I use IB for trading the Nasdaq can i do the same thing with that?

 

[Naz]

Hi Layman,

Yes you can use iB to trade those kind of moves.Maybe you might just want to see the confirmation first before you enter.

 

[Naz]

Just for info GOOG results should be out within the next hour.

 

[Naz]

BRCM seems to be the good one at the moment.Nothing has come out yet on GOOG.

 

[Naz]

Well i dont know whats happening with GOOG so i took nearly an $18 run out of it whilst i was waiting for the results.For spread betters thats nearly 1,800points.

Here's the chart and my account entry and exit.

 

[Mr. Charts]

Great stuff, Naz.
Not sure what happened to your news feed, but the first info was out at 9pm UK, 4pm EDT
I traded it twice and for a change I've attached screen shots of the bid and ask sides only of both entries and exits.
Short #1
Profit
+$2.70/share

 

[Mr. Charts]

Covered a couple of minutes later

 

[Mr. Charts]

Here's the second short

 

[Mr. Charts]

And the second trade covered for a very similar profit of
+$20.97/share
What's quite interesting is that we both read the imminent end of the move at the same time and must have exited within a second or two of each other.
Also the very bottom of the move came within 20 seconds.........since then it's risen twelve dollars.
Richard

 

[Naz]

Mr C your right, i missed that first very small,headline after 9pm when so many things were happening and i was looking at different stocks.Thats why i appreciate it when the news service highlights the main details in red or green like the main info they posted at 10.50gmt which was probably the catalyst for the bounce and the close of my short.

I attach a screen shot of the archives to show how the news came out.

 

[Naz]

Some general info.

The great thing about the Nasdaq is the stocks move! Incredible though it may sound its easier to trade something thats moving rather getting analysis paralysis trying to figure out the wiggles and jiggles of something slower that is going no where.

The Nasdaq in their wisdom have allowed day traders through ECN's and direct access to participate in these earnings moves unlike many other markets that seem to want treat retail traders as second class citizens.

I suppose other markets figure that many people will be like bank customers and feel comfortable with something they know rather than change to a better deal.

As a Nasdaq trader, one is able to pick a stock thats suits ones personality.So GOOG might be for day trading maniacs,but for something slower one might pick Intel that gently responds to its results and moves maybe a dollar.The best way at the start might be to look in the Nasdaq 100 and pick a stock in the $10-$50 dollar region.Rather than the $300 price range of Google that others tend to play.

The next is to have some decent charts both Intraday and pre and post trading activity.I use www.Tradestation.com

In the screen shot attached of lasts nights move you can see that i entered on the break of support.So in that instance the chart helped.However you may wonder why i exited.That was purely because i saw the momentum suddenly change on a level 2 screen i was using.

So the ideal package i believe for the Nasdaq trader is to use both.

Many organisations will try and offer their own standard L2 configurations.I prefer a company that gives me the options to let me design the way i view detail in that screen.so that i'm able to cut out mm that are no use.Highlight ones that are doing interesting things and best of all in pre and post market trading cut out all the rubbish thats not doing anything and concentrate on a full screen of orders that mean something.

One of the best things from yesterday is one of our beginner traders made his dollar run (100 points) in the first four trades of the day.With the right share size that is all a US day trader needs to make a living.

Naz

 

[Naz]

The majority of stocks come out with results after the close today.
Here are some Nasdaq stocks that are coming out with results before the open.

Trade them on the ECN's before the market opens and get an advantage over others that dont do that.

ANAD
ABFS
CELL
FLSH
PETS
VECO

 

[seancass]

Risk and Reward

How likely is it, do you think, that a trader trading Nasdaq stocks could sustain huge losses via direct access trading if, say, there were another major incident in the US? I would always trade with a stop loss, naturally, but of course there is no guarantee that stops will be honoured when stocks are in freefall. Presumably, one could lose thousands instead of hundreds, given the 4:1 leverage with IB. Presumably, with Direct Access there is no broker that would guarantee stops?

Does anyone know of anyone who has experienced this kind of crisis?

Sean

 

[Naz]

How likely is it, do you think, that a trader trading Nasdaq stocks could sustain huge losses via direct access trading if, say, there were another major incident in the US? I would always trade with a stop loss, naturally, but of course there is no guarantee that stops will be honoured when stocks are in free fall. Presumably, one could lose thousands instead of hundreds, given the 4:1 leverage with IB. Presumably, with Direct Access there is no broker that would guarantee stops?

Does anyone know of anyone who has experienced this kind of crisis?

Sean

Hi Sean,

PRE and POST market as far as i know ECN's dont have stops.You do it manually.During the day however if i'm busy i put my stops out on ARCA.I make them market stops so that if it runs through my set price they'll get triggered maybe at a lower level but they'll definitely get triggered electronically.I have never had a problem with stops on ARCA during market hours.

Even if some idiot decides they want to trade miles away from the level 2 price and the chart goes to reflect his trade,ARCA will not stop you out.It follows its order book thats tied into the level 2 screen.Unlike some UK stocks, that means no one mm can suddenly dip the price down to execute a trade which therefore by default would run the stops. See chart, attachment 1, and time and sales attachment 2.

You will notice that out of the blue in the space of a few seconds the price was suddenly dropped underneath support and straight back again.So that if anyones stop was there it would have been triggered.

On the Nasdaq ARCA wouldn't trigger a stop in this instance just because one mm executed an order away from the quoted level 2 price.The chart would pop down to register the order but no ARCA stops would be triggered.The reason is that ARCA is so liquid it responds to its order book that consists of many many traders orders,which by default follow the true price of a stock.

Any trader can view the ARCA order book and see the depth of orders that exist in his/her stock and make a judgement as to where they would decide to place their stop for execution.A market stop will definitely be executed, you have to make the decision as to the liquidity in your stock and therefore the potential area a market stop would be filled.

 

[Naz]

In this example on the Nasdaq level 2 screen you will see that one order went off on the time and sales in red at $70.78.

Let me tell you that the chart went down to reflect that order,the volume looked like there was massive selling.Every t/a indicator would be affected by that order.

I saw what happened on the chart but one check on the L2 screen and the time and sales showed me the truth about this stock,it was still going up. ARCA was trading at $71.23-$71.27 that drop in the charts made by one order would not have triggered an ARCA stop because ARCA never traded there it followed the true movement of the stock.

So i would argue that in showing the two similar moves in the UK and the US that i have more control using an ARCA stop than i have when using stops on some UK stocks.

 

[Naz]

Another factor for getting total control over your position at any one time is to have a really good level 2 direct access execution platform this gives you confidence when taking and managing your trades. I use www.directaccesselite.com.

They've just dropped their prices per trade.

$3 up to 300 shares $5 up to 500 shares,$10 up to 1000 shares.

Naz

 

[Trader333]

Sean

Does anyone know of anyone who has experienced this kind of crisis?

This is why the likes of Grey1 use pair trading as it offsets this kind of event.


Paul

 

[Mr. Charts]

Those of you who use IB can select ARCA on TWS rather than Smart, supersoes etc to do as Naz suggests.
Richard

Sean, planning for such a catastrophe as another terrorist attack like 9/11 is, imo, best with cheap long OTM options. I traded UK options several years ago but am not an expert, so you might like to ask someone like RogerM on the options section of this board. You can trust what he says.