Description

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

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


Friday, February 21, 2014

Level 2 Example: PTOG Opening Action 2/20/14

Please begin by viewing my "Level 2 Basics" video before viewing this one!

Before jumping into the level 2 action, let's start by examining the chart setup and my mindset going into the day:


PTOG had a very strong day the previous day, mostly due to a sketchy PR about this oil company entering the marijuana sector. However, I don't care about the news, just the price action. PTOG managed to close up on the day almost 200%, breaking out past the morning high late in the day. I liked this strong closing price action, so I decided to take an overnight position. I slowly bought into a position at the end of the day, and I bought 500,000 shares to hold overnight from an average of $0.0215. The stock closed at $0.0234.

When starting a fresh day, you don't have a whole lot of chart action to play off of. Going into a new morning, there is really only one price point that I typically consider to be key, which is the previous closing price. If the stock can stay green on the day, or in other words stay above the previous closing price, it is a sign of strength and a positive indicator for the stock. However, if the stock goes g/r (green to red) or, in other words, drops below the previous closing price, that shows a huge shift in momentum and the odds of a large pullback increase.

The video below will show the level 2 action from the morning of February 20, 2014, as well as a real time chart developing. Please pay attention to how I analyze the level 2 in combination with the chart as it is developing.

Hope everyone finds this video useful, and please contact me with questions if you're having trouble!

Note: Video cuts off at the end - sorry about that!


Due to poor video quality, please view at this link:
https://docs.google.com/file/d/0B82U0eZh1EYQaUpPN3VQQnNNcTA/edit

34 comments:

  1. Hey Tim, thanks for the great work and inspiration! How do you assume, that a stock is gonna gap the next morning or in other words, what r the reasons for it to happen ? Thanks..
    (oh and btw, could u update ur promoters list? would be awesome since the one u have is little outdated)

    ReplyDelete
  2. Strong volume, strong close, big up day. Those are the factors with an OTC that make a gap up likely in my opinion. Soon I'll try to get my promoters list updated and posted.... it's been less of a priority for me lately as I've been far more focused on trading OTCs with volume than worrying about who is sending emails

    ReplyDelete
    Replies
    1. As a followup to that, after a gap-up, a stock will either spike or crash. How can you tell what are the odds of it spiking or not at the open? Nate says that he sells his position, or part of it, if the volume is too big in the last few minutes, because those last minute buyers will become sellers right at the open.

      Thanks Tim!

      Delete
  3. Very good video bro, thank you! I tune into this blog daily just to see anything new! As a Sykes student, any and all knowledge is helpful!

    Adam Whitman

    ReplyDelete
  4. The commentary was extremely helpful, but it's hard to make out what the bid, ask, and print numbers are because of the video quality... If you could make another one using Livestream software or something (Snagit has very good software), it would be so much more helpful! If that's a hassle, no worries.
    -Challenge Student

    ReplyDelete
  5. Thanks again Tim - That's an extremely helpfull video!

    ReplyDelete
  6. Good info, but quality of the video is very bad.

    ReplyDelete
    Replies
    1. Sorry about the quality everyone! I'll get the issue corrected for future videos

      Delete
  7. What level 2 analysis software are you using? I use thinkorswim, but it isn't as helpful as the one you seem to be using.

    ReplyDelete
    Replies
    1. This is "DAS Trader," provided by Speedtrader or Suretrader

      Delete
  8. Tim great video, just what I need. What broker you used to buy PTOG in this scenario?

    ReplyDelete
    Replies
    1. I traded PTOG at Speedtrader because there were no routing fees there. I would never trade a stock this cheap at a broker that has ECN fees

      Delete
    2. From your blog on brokers to use, you mentioned that Speedtrader charges $.0044/share commission, so does that mean buying 500k of share on PTOG will rack up a roundtrip of $4400? If price action does not go as planned and say you exit at breakeven price, that still seems to be an awful lot of loss, is the mindset to make even bigger gains and this is part of the game with OTC stocks?

      Delete
    3. give that post a reread, Speedtrader doesn't have ECN fees on otc stocks except for ARCA

      Delete
    4. What do you know about "Scottrade" ?

      Delete
  9. Tim, Thank you for your immediate reply. You're so blessed.

    ReplyDelete
  10. Thank you Tim, thanks for the other comments also!!
    more more more!!!!

    ReplyDelete
  11. Not much to add Tim except, again I think you articulate very well. Oh, and had the quality been good, it would have been an ever more helpful video. Really liked your scan settings.... here is to the next video. cheers, Kevin

    ReplyDelete
  12. that was super helpful, thanks for taking the time to record it!

    ReplyDelete
  13. These videos are the essence of trading. No matter what patterns you learn if you don't understand level 2, forget about it. I've learned more from you without paying you a dime than I've learned from everyone else. Thank you, may god continue to bless you and I believe you will be the most profitable trader one day.

    ReplyDelete
  14. appreicate it..
    vids quality could be better, having trouble with visually following.
    if ur too busy, just hire someone to capture the vids, u could prolly afford it ;o)

    ReplyDelete
  15. Tim, what does the blue color means in the level 2 there is baby blue and navy blue..

    ReplyDelete
  16. Might be a stupid question but where did you get that level 2? On ThinkOrSwim mine looks way different and the one you are using looks much easier to use.

    ReplyDelete
  17. Thank you for all your educational shares. I am a Tim Sykes' Challenge Student. I have truly come to embrace your approach. The fact that you selflessly share your knowledge speaks volumes of your heart. I pray God keeps you and your family in His Grace.

    ReplyDelete
  18. This comment has been removed by the author.

    ReplyDelete
  19. Hi Tim, thanks for sharing so much of your knowledge on trading. I've been studying your trading tickers dvd and found the main problem I've encountered to be primarily interpreting level 2 to identify key points where prices reverse their momentum. Is it correct for me to say that when the time and sales tape show large amounts of red prints that clears bids on level 2, the price action is going to look to fall and the opposite would cause price action to spike. also, when bids or asks are stack on level 2 without any movement on the time and sales tape, does it signify resistance to a certain momentum and indicate a potential momentum change?

    ReplyDelete
  20. Thanks you for this Tim, I'm currently trying to understand the L2 action and how to read the turns and spread so again thank you for sharing :)

    ReplyDelete
  21. This is the video I was looking for. Thanks TimG-Greenking49-Challenge student!

    ReplyDelete
  22. The simple truth about binary options which many of us do not know is the fact that it is mainly based on predictions. Without proper knowledge of what next can happen to the stock market, you are sure to lose your funds. That is why it is important to be tutored or mentored by a professional trader in binary options. During few days of being mentored by Sir Robert  I've learnt much and also succeeding in trades and has been doing successful withdrawals and was able to recover all my lost funds. Feel free to contact him on: Robertseaman939@gmail.com

    ReplyDelete
  23. Investing online has been a main source of income,that's why knowledge plays a very important role in humanity,you don't need to over work yourself for money.All you need is the right information,and you could build your own wealth from the comfort of your home!Binary trading is dependent on timely signals,assets or controlled strategies which when mastered increases chance of winning up to 90%-100% with trading. It’s possible to earn $10,000 to $20,000 trading weekly-monthly,just file a complaint with Robert,I had almost given up on everything about binary trading and ever getting my lost funds back,till i met with him,with his help now i have my lost funds back to my bank account and I can now trade successfully with his profitable strategies and software!! Email: Robertseaman939@gmail.com or whatsApp: +44 7466 770724 

    ReplyDelete
  24. He is a professional hacker, he is absolutely reliable and I strongly recommend him for any types of hacking jobs you require. why i said this is because I have engaged him severally in various hacking jobs and he has never disappointed me nor any of my friends who have hired him also, He has really proven himself to be a professional and a reliable hacker, He can help you out with any hacking jobs including this:

    -Cell Phones hacking (remotely)
    -Credit Repair
    -Bitcoin Recovery (Any type of Cryptocurrencies)
    -Make money from Home (Any Countries)
    -Social media Hacking
    -Website Hacking
    -Erasing of criminal Records (Any Countries)
    -Grade Change

    Email him via: hackingsetting50@gmail.com

    ReplyDelete