Description

My basic trading philosophy can be summed up by one simple quote:

"Trade the ticker, not the company" - Nate Michaud


Wednesday, February 26, 2014

Level 2 Example: NVLX Morning Panic

Please review the NVLX setup coming into the day, which I covered in this watchlist. Hope you find the level 2 video helpful!

video

If video quality is poor, please view at this link:

https://docs.google.com/file/d/0B82U0eZh1EYQQWRxVXR6VElMOTA/edit

30 comments:

  1. Thanks for posting this. Did you cover your short around the first green candle (~0.345) or did you hold through that and cover lower down?

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    Replies
    1. I covered at .34ish fake bottom and failed to reshort when the bounce failed

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    2. Hi Tim....wanted to ask regarding SureTrader....Im not much into OTCBB or Pink sheets and I just wanted to ask about STs executions on Nasdaqs. HOpe all is well.

      Nick

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  2. Tim that was great. I'm so tired right now I didn't absorb it all but I'm going to watch it again in the morning. I see you use level 2 from ST and chart from TOS. That's what I'm currently doing mostly because I couldn't find as good level 2 in TOS. I assume it's not there if you can't find it either.

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    Replies
    1. Malcolm - did u mean suretrader or speedtrader?

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    2. Joe I was meaning suretrader. As I understand it speedtrader is the american part of the same company so I imagine their software is almost if not exactly identical. I use suretrader to get around the PDT rule.

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  3. This is the missing link for me. Can't wrap my mind around it right now will watch it over and over again until in get it. Thank you so so much

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  4. Nailed the bottom. Great vid Tim, thanks a lot man! Very informative

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  5. Wow this is tricky. It seemed apparent that momentum began to turn at .3415, but it turns out on the intraday that was a total false bottom and it ended up going to .30 before starting to really bounce. Looks like I gotta go look at the Level 2 DVD. Thanks a lot for sharing!

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  6. This is my biggest challenge, I have difficultyputting level-2 and sales tape together. As well as reading the charts to determine a plan for the following day. Anyone have any advice? Thank you.

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  7. Hey Tim. Do most pumps have a parabolic last days pumps that increase the share
    price like 100+% in a day or two? Should you a wait for a day or two were you get like 100% increase to decide that the dumping is near? I'm asking this since I bought into WPWR at .5633 and so far it has been increasing at a daily increment of 10-16% every day. I'm waiting for a day that it increases 50-100% or even 150%.
    When I see that it has increased by 50% in a day I would know that the dumping a block away so I would sell.

    What do you Think?

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    Replies
    1. first down day is today. So it's the beginning of the end from now on.

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    2. I wouldn't say WPWR has to have a huge 50-100% increase day before it's over, in fact that's very rare. I also wouldn't bind myself to rules like "first down day means the end". See how far that would have gotten you in NVLX...

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  8. Hey Tim! Happy B-day man. Make sure you get extra cheese on that pizza bro. You deserve to splurge a little. :P

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  9. Another awesome video. Hey man, if you ever run out of blog/video ideas, you should create a section of your blog called "Spot the Dip" where you record level 2 action like this to find the dip buy on a breakdown or something. Just watching a solid level 2 turnaround is beneficial! Happy Birthday man, live it up buddy!

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  10. Here's my breakdown of the video.

    (Time - Action)
    21:21 - MM's on the BID starts soaking up size
    21:27 - Flurry of green prints
    21:43 - More MM's pile onto the BID
    21:48 - ASK starts thinning out
    21:54 - Prints above the best BID.......end of dip

    I couldn't have done it without your video lessons Tim. I've learned more in a week than I've learned in the past 2 months! So a MASSIVE thanks!


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  11. Exactly what i was looking for - thank you so much for taking the time to do this.

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  12. Hey Tim,

    I have a lot of trouble forecasting the next day, I write down what I think the stock is going to do the next day and watch to see, for example I was wrong about NVLX, When it declined early in the day I would have shorted it and did not expexct the spike back up. Can you offer any advice on how to i educate myself on forecasting. Thanks, I appreciate it.

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    Replies
    1. You wouldn't have been wrong to short the weak NVLX open though, it dropped down to $.43 which was about 20% below the opening price. That's a great gain, all you have to do is cover the short! The bounce all the way back and then to new highs is a pretty rare move to see in OTC stocks, so don't get too down on yourself for not being able to call that. It surprised me too.

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  13. Tim. One question please.
    The Time/Sale prints. Some Red. some Green. Usually Red print is a sell and Green is a buy. Why on your Montage Window is the other way around? Just to make sure I understood correctly. I have SureTrader and has similar display as SpeedTrader, which I presume you use.

    Thanks

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    Replies
    1. Pink print = print below best bid
      Red print = print at bid
      White print = print between bid and ask
      Green print = print at ask
      Bright Green = print above best ask

      No matter where the print, in order for it to be a trade there is always a buyer and always a seller. Hope this helps!

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  14. This video helped me understand Level II so much, thanks man! I identified the bottom and was actually surprised I found out I was right. Please keep making these level two videos.

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  15. Tim, first how do you get your TOS chart to show price in the thousandths? I can't get that in mine, it always has a digit in front of the decimal. Even when I go to settings and type .001

    Second I have trouble understanding how you sell on the ASK. I do understand placing an order above or below market and waiting for price to come to you. Is this whats' happening? Or is it when you route through NITE in this example is that MM just taking the order on your behalf, thus you selling on the ASK, sort of like you're acting as the MM NITE? That's all I can think of, not sure if that is it though.

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  16. Hey Tim, how do you place bids on the ask vs the Bid like you said you did?

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  17. Finally just had my Level 2 AHA! moment!! I can't believe I ever even considered trading before being able to read L2 properly. My eyes have been opened. Thank you so much Tim!

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  18. Same question as Adam:

    "Second I have trouble understanding how you sell on the ASK. I do understand placing an order above or below market and waiting for price to come to you. Is this whats' happening? Or is it when you route through NITE in this example is that MM just taking the order on your behalf, thus you selling on the ASK, sort of like you're acting as the MM NITE? That's all I can think of, not sure if that is it though."

    Thanks for the video and the help!

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  19. Thank you so much for your LVL2 videos, you've got the best teachings for that subject. Seeing momentum swings like that is very important and thank you for explaining your knowledge

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