DepthTrader

Profit margin of 9. And could someone explain how the stock market works.? Thank You for Submitting a Reply,! Level 2 quotes, in addition to Level 1 info, shows the actual trade orders of market makers for a stock and the identity of those traders. Register now to create your own custom streaming stock watchlist. Nasdaq and OTC stocks traded on Electronic Communications Networks ECN's allow trading of stocks from all major exchanges and even OTC stocks between all traders, including brokers, broker-dealers, large firms, and mutual funds. Auction markets also have market-maker type traders for any given stock called 3rd market makers.

Sep 07,  · Just a basic question about how can Level 2 quotes help me further in understanding the current price action in Forex Markets. For example, lets look at the attached picture.

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ECNs generally display the best available bid and ask quotes from multiple market participants, and they also automatically match and execute orders. ECNs offer a reserve order option, which is composed of a price and display size along with the actual size. Hidden orders, which are an option where investors can hide large orders from the market on the ECN, function in a similar way but are invisible on Level 2.

This allows for more discretion in determining prices. The best way for users to determine the status of reserve or hidden orders is to check the time and sales for trades at the indicated prices. Price improvement involves attaining a higher bid price, if selling An equity commitment note ECN is a type of mandatory convertible The day-trader can then shop around and buy or sell shares from competing market makers who are offering what the day-trader interprets as the best quote price for shares of that stock at that point in time.

Programmable algorithmic smart trading software a Must! As noted earlier, most of such trading strategies are accomplished by successful day-traders using programmable algorithmic smart trading software.

Such day-traders regularly fine-tune the trading perimeters of their trading programs to reflect the particular day and stock they are trading at the time. Without such programs, the day-trader cannot effectively trade against the high speed and sophistication of the dealer-brokers and other market participants. Day-traders trade on a variety of financial markets at once to attempt gain the edge - the best price possible at a point in time.

As well, many day-traders, besides trading just on Nasdaq through Level 2, will simultaneously scan ECN's and even Black Pools for the best price they are seeking on a particular stock at a point in time. The Extraordinary Penny Stock Investor trades on another level beyond the white noise of such quick trades on fractions of a percent of the day-traders, dealer-brokers and other market participants.

The trading strategies of such Extraordinary Investors do not require Level 2 Quotes knowledge at all. Such traders are not trading directly with or against broker-dealers for the best bid or ask price within tenths to millionths of a second frame. Any serious day-trader will require DAT Level 2 trading access coupled with a DAT smart routing system and intelligent highly advanced algorithmic trading programs, because that is what the big player day-traders including mutual funds, ECN's and other large trading firms and dealer-brokers use to obtain the edge.

Day traders must implement different strategies for trading on an auction market. A closer look at the Level 1 screen compared to the level 2 screen - what information you would see: You can see this activity displayed by typing in a ticker symbol of a stock on any financial website like charts. Level 2 screens , as previously discussed, provides much more information about the stock, including. What has just been described about market maker trading activity is not an accurate description though.

Not accurate because what you see on the Level 2 Quotes screen of market maker trading activity is not complete - you will not see all the trading activity of market makers or the other major participants.

Market makers play tricks on day traders and other market participants by hiding trades they make or hide the volume of shares traded to gain an advantage over traders and their trading software to make a profit. Market Makers are in the business of making a profit off of other traders and also to keep prices of a stock stable and liquid. Part of the strategy of market makers is to prevent other traders with level 2 Quotes from learning about all of their trading activity.

They do this to confuse other traders about trends changes, and turn the tables on them, making profits off of their confusion. Then, after getting the desired result, they turn around and cancel the order and trade just the opposite. When broker-dealers trade some of their shares on an ECN this creates problems for day-traders in implementing their strategies. No matter how complex, intelligent and efficient a day trader's programmable trading software is, it will always be flawed and produce errors and losses because not all the data is present due to this trickery by market makers and other participants.

ECN's are the same networks where you or I, and many other retail investors, could trade stocks using DAT broker provided software. On an ECN ATN Electronic Communications Network Alternative Trading Network the individual traders, brokers, day-traders, institutional investors, and dealer-brokers all trade without their identities revealed; so, attempting to locate who the dealer brokers might be that are trading on one or many ECN's is not accurate.

Since the market makers' ECN transactions cannot be tracked by level 2 software , day-traders and swing-traders are pretty much in the dark. There is no clear easy way to make successful day-trades with Level 2 Quotes because of this trickery. Due to the tricks market makers play, technical software, algorithmic trading programs, and even your own logic will be flawed in discerning successful trades because all the facts of the trading activity of market makers is not accounted for when using Level 2 Quotes.

The average is about 14 market makers per stock listed on the Nasdaq but could be as many as 42 or more market makers on fast moving stocks. No competition between specialists. Final summary and A few extra bits of info that you may want to be aware of. The average market makers per stock is You can see this for yourself by viewing Level 2 Quotes. This information may be used to identify trading patterns for each market maker and could identify potential trends before they happen.

Wholesalers Order flow firms - Many online brokers sell their order flow to wholesalers; these order flow firms then execute orders on behalf of online brokers usually retail traders. Here are some of the most popular ones: Why Use Level II? Level II quotes can tell you a lot about what is happening with a given stock: You can tell what kind of buying is taking place - retail or institutional - by looking at the type of market participants involved.

Large institutions do not use the same market makers as retail traders. If you look at ECN order sizes for irregularities, you can tell when institutional players are trying to keep the buying quiet which can mean a buyout or accumulation is taking place. We'll take a look at how you can detect similar irregularities below. By trading with the ax when the price is trending, you can greatly increase your odds of a successful trade. Remember, the ax provides liquidity, but its traders are out there to make a profit just like anyone else.

By looking for trades that take place in between the bid and ask, you can tell when a strong trend is about to come to an end. This is because these trades are often placed by large traders who take a small loss in order to make sure that they get out of the stock in time.

Tricks and Deception Although watching the level II can tell you a lot about what is happening, there is also a lot of deception. Here are a few of the most common tricks played by market makers: Market makers can hide their order sizes by placing small orders and updating them whenever they get a fill.

They do this in order to unload or pick up a large order without tipping off other traders and scaring them away. After all, nobody is going to attempt to push through a , share resistance, but if a persistent 10, share resistance is there, traders may still think it is a beatable barrier.

Market makers also occasionally try to deceive other traders using their order sizes and timing.

The Players

Forex Trading Currencies: Features real-time forex quotes, trading 24 hours a day over five days a week, view currency charts and the top eighteen currency pairs in the global market. Keep track of your trades with real-time currency quotes and charts, view the BID and the ASK price, change in price, high and low for the day. Free real-time streaming level ii stock quotes shown here display live stock orders as they flow through the ECNs. If you cannot see the quotes then you can turn off your Internet browser popup blocker for loamcalculator.ml and try again. Level 2 Forex provides access to over-the-counter foreign exchange contract markets. Trading in leveraged forex or derivative contracts entails high risk as .