Description

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

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


Tuesday, March 4, 2014

More NVLX Level 2 Analysis

In addition to level 2 analysis, I also spend some time in this video discussing OTC routing and how I get executions.


Here's a link to the video if quality on the blog is bad:
https://docs.google.com/file/d/0B82U0eZh1EYQRThyaEVuYWdzanc/edit

77 comments:

  1. amazing, i just learned so much. Thank You Tim G.

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  2. thanks for this Tim. This is why I love OTC stocks. the moves are more easier to see once you understand what the market makers are up to. Missed the short this day because I was in class and didn't trust my mobile to trade off but now I understand what happened that day. grateful for the screen capture

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  3. interesting you mention regal, hadn't heard of them before - looks like a decent broker for otc's if commission is a flat $9.95/trade for unlimited shares.

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  4. Hey Tim,

    Thanks for posting that, this is my weakest area. Your approach is very educational. i still don't fully understand all of it. Ill watch that vid over n over until I do. Do you recommend additional resources to learn this area of level 2, sales tape and market maker activity?

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    1. When I learned I just learned through observation, watching it happen again and again and again. You could check out the level 2 videos on http://tradingwarstories.com/category/the-second-level/ there's no audio but good practice watching panics and calling the turns

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    2. Tim the http://tradingwarstories.com/category/the-second-level/ link doesnt work!! got anything else??

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    3. Aw the site is gone? That sucks! Unfortunately nothing else I can think of

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  5. All I can say is wow, thank you thank you thank you. This video is incredible. Thank you again. I will watch it again and again. This answers so many of my questions

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  6. so every time the sales time is red, the bid is taking a hit and momentum is going down, and every time the sales time is green, the ask is taking a hit and momentum is going up? Gonna use a science law here, but for every action there is an equal an opposite reaction. So for every sell (red) there should be an equivalent buy (green)?

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    1. Hey Austin, I think you might be confused, a print is the transaction between a buyer and seller, so you'll only get one print per transaction. If someone sells below the bid you'll get a red print, if they sell above the ask, you'll get a green print.

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    2. Awesome, thank you for the clarification.

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    3. uh... I believe red means this trade occurred on the bid, not below it. Likewise green means the trade occurred on the ask, not above it.

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    4. Your right Chris, not sure why I wrote above/below...

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    5. Hey Austin, looks like where you're getting confused is thinking a red print is a sell and a green print is a buy. Don't think of it like that. All prints are trades, there's someone on each side of it. The color just signifies WHERE the transaction happened, whether it was a seller hitting a buyer at the bid, or a buyer hitting a seller at the ask

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  7. Thanks Tim. When the down trend was coming to and end and about to turn up you mentioned you'd covered already before it got strong. What happens once it's already gotten strong and just started to up trend again and then you try and cover?

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    1. Once the trend shifts and the stock is spiking, it's going to be very difficult to execute a buy order. Just like it would be tough to execute a sell order into a panic

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  8. Thanks for the video Tim. I was in on NVLX that Friday of the big panic and was one of the suckers who bought into the fake bounce. 31,500 shares at $0.53. You can actually see my order getting filled on your screen lol. God it hurts to watch this streaming video of my mistake! Oh well, I'm a new trader and this was an expensive lesson learned I guess. I'm still trying to grind my account to $25k so I can pattern daytrade. Any advice on that? Once again, thanks for all your easy-to-understand videos and commentary. Your story has been a real inspiration to me since I've found you on Tim Sykes' profit.ly (I'm a Pennystocking silver subscriber). See you in the chat!

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  9. Tim - Big Fan and Congrats. I have questions on the broker you mentioned. In the last big video for T Sykes that you did you only mentioned Speedtrader Suretrader, IB and Centerpoint. You had good points and bad for each one. Regal Discount securities seems to be something new that you are mentioning (at least for me). How are you finding these brokers? How Long have you been using them? I haven't heard of a couple of these till Tim Skyes, Nathan M and your videios. A little worried of a MF Global type situation. Is Regal on par with Centerpoint or a replacement to Centerpoint??

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    1. Regal has very few borrows, so definitely not a Centerpoint replacement. I'd consider them closer to a Speedtrader replacement than anything. I heard of them through "Modernrock", another OTC trader. I'm no longer with Regal, but got my money in and out no problem

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  10. Tim,

    I noticed on the speedtrader demo, if there is an "S" below the anchor the stock is shortable and if there is not then it is not shortable. Is that a demo thing?
    Today watching FITX, ONCS and NVLX there is no Bid market makers on the left only ask market makers, and none are shortable. Can you clarify that for me? Thanks a ton.

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    1. Sounds to me like you have a faulty level 2 feed, because mine shows bids on all of those stocks. However, it makes sense that they wouldn't be shortable at Speedtrader. That's not a good broker for short selling

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    2. So are you using Speedtraders platform to analyze the trades, but you short sell with another broker? Is it SureTrader that you short with?

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    3. I use Centerpoint to short sell

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  11. Your Level II videos are really useful…thanks for posting them.

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  12. Thank you so much Tim for sharing your knowledge and insight. I know you had said that when you started studying under Tim Sykes (I'm a Pennystocking Silver member) that you didn't trade for a few months as you wanted to learn first. I will watch the Level 2 videos at the link you posted above but would you recommend having a platform like thinkorswim or stockstotrade that would allow me to watch the Level 2 from the watchlist you and Tim Sykes put out daily?
    Thank You For Your Time,
    Dean

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    Replies
    1. Thinkorswim level 2 is pretty crappy, I'd get familiar watching it on a broker that uses DAS trader as their platform, or StocksToTrade

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    2. Would you do E*Trade Pro platform over the Suretrader platform? Both use DAS trader I believe. Currently I only have TOS and Schwabs Smart Edge

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  13. Thanks a great deal for posting this, this means a lot to someone like myself who is trying to soak up as much as possible to get good at this.

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  14. Interesting - shares are able to be covered via the bid, AND the ask?

    Cannot find any information online, but logic seems to be dictating to me right now that this could only be done on the bid. Am I confusing something?

    Thank you Tim.

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    Replies
    1. I definitely confused myself. Anyway - answered. Here's a good link for anyone on the basics of the Bid and Ask: http://www.sanglucci.com/the-lost-art-of-tape-reading-part-2-the-bid-and-ask/

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  15. At the beginning, did you just feel that the stock hadn't come down enough yet to really have a big reversal (which resulted in that fakeout bounce)?

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  16. Great educational material! There is a lot to learn. Keep it up! Thanks for the effort! And wow its free. Thanks man!

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  17. Hi Tim,

    what do you mean by getting filled on the ask and bid. Are you saying when you route when you try to sell you put them on the bid side?
    I am confused....lol

    (I understand the bid/ask and how it works, just not sure what you mean when you tried to get executed)

    Thanks for the video though! Learning alot!

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  18. When I talk about getting filled, I simply am referring to where I will place my order. So if I'm trying to fill on the bid, I'm placing my order at the price the level 2 bidders are currently at. If I'm trying to hit the ask, I'm putting my order where the market makers on the ask are

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  19. Hey Tim,
    Really benefiting from your blog man. Couple of questions for you: what time-in-force do you use in your orders? I'm assuming GTC?
    Also, thanks for going over where you would try to get filled for the trades but can you please elaborate on the actual procedure you follow to exit a trade if it's going against you? I find it very difficult to quickly identify the price I want to exit at and to type in the number for a limit order if I'm trying to sell, since by the time I type the desired sell limit, it usually has dropped past my mental stop loss. Do you have any pointers for this and being "quick on the trigger?"
    Looking forward to your reply!
    Ben

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    1. I use GTC orders, but I never leave them open overnight just to be safe. If you're having trouble quickly entering orders, perhaps consider setting up "hot keys" with your trading platform so you don't have to try to type quickly

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  20. I would recommend watching video without audio first, making notes what is going on and then watch that once again with Tim's voice. The only way how to learn something... Great videos! Continue pls...

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    1. That's a great idea. I like it and will do that from now on.

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    2. Imagine Tim sitting next to you. First, you are gonna tell him, what you see, then you get feedback immediately - what is really going on. It is like a personal teaching... and what did you pay for that?!

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  21. thanks for the video Tim. Luckily I traded small my first panic and learned I needed to refine my level 2 skills a lot and only lost minor change.

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  23. Thanks Tim! This is very helpful with level 2 material. I am starting to understand the difference between the bid and ask as far as stacking up on one side while it doesn't move and looking for those changes to occur where the momentum shifts.

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  24. Wow! A lot of helpfull details in here Tim! Thanks!
    One question: at .4688 the ask was holding really well, taking a lot of hits and it's been thiner than the bid all the time. Didn't you think that the bounce would fail at that point? And why not?
    Thanks!

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    1. At that point yes, I would have been very concerned the bounce might fail. At that point what I'm looking for is whether the stock sets a higher low on the pullback or cracks the previous bottom. If it sets a higher low, I'm likely rebuying whatever shares I sold

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  25. thanks for posting this, very helpful. It was hard to make out the numbers on level two, not sure if that is an issue with my PC or the resolution of the recording. Anyway, thanks again.

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  26. Keep up these level II videos! They help so much!!

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  27. Great video! Quick question: I'm using interactive brokers and they don't provide level2 for pink sheets. Do I need to sign up for a different broker for this? My googleFU skills aren't working for me for this. Can't seem to find the answer.

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  28. Tim, just have to say thanks again!! these videos helped immensely man!! 2 perfect strikes yesterday and today because of it.

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  29. Replies
    1. Make sure you've watched the intro to level 2 videos first, it's important you know the basics before watching in action

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    2. I did and i actually commented on that one as well. how did you learn this? was it through tims challenge? I need help with this and want to learn

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    3. I actually was mostly self taught on level 2, I just watched it time and time again and started to learn the patterns. Of course it's best used in times of volatility along with what the chart looks like. I'll be posting more videos so hopefully that helps clear things up

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    4. do you mainly focus on shorting OTC stocks?

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    5. Or buying, I'll do either if the price action is right. I mainly only trade OTC though

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  30. ok so what volume are you looking for? sorry for all the question but im just trying to get a better understanding on what to look for

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    1. Usually at least $500k in volume, you can read more about how I scan for stocks on my FAQ page

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    2. ETrade doesnt let me short any OTC stocks even if they're over $2. why is that? and who are u currently using as a broker

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    3. i know you said you use Centerpoint but theres no way i afford it. How will i be able to short any OTC stocks when there is no brokers that allow me too? The only broker is Suretrader but it looks way to shady for me. Please help need to short these pump and dumps lol

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    4. You're either going to have to settle for Suretrader, or go with Interactive Brokers. Otherwise I'd focus more on learning long setups and get a broker geared towards that

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    5. does IB let you short OTC? if so do they let you short ones under $1?
      does tims dvds teach long set ups or mainly shorts? which person is best for teaching long setups? sorry for all the questions lol

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    6. tim do you use any strategies or setups for scans?

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  31. HI Tim, thank you for all your blog posts, they are one of the most valuable sources of information online so far.
    I have the same question like 'nada' , what is the best and cheapest way of getting level2 for OTC if I plan to use IB ?
    Thank you !

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    1. Probably a free option like ThinkorSwim or Prodigio

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    3. Thank you for your quick reply !
      Is there any mayor difference between those two ?

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    4. Gotit .. Prodigio is not really free, whereas ThinkorSwim is.
      Thanks again Tim !

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  32. Hey Tim, thanks for these videos because they are incredibly helpful. I'm finding that I am able to identify when a stock is going to turn in the direction I'm hoping for. My next challenge is on the execution. Lets say a stock is starting to stack bids at $0.0365 and the ask is weakening. Would you put your bid just above the current bid in order to get filled? What I'm finding is that even though I can see the breakout coming I'm often not getting filled.

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  33. Hey there,
    You stated in this video, that you put order(s) on the ASK and the BID. Is this what you described as "BOXING"?

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  34. Hi Tim, thanks for the blog! I wanted to ask if you use these level 2 strategies on non-otc stocks ? Or what differences might there be ?

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  35. These videos made perfect sense to me how price moves in L2 along with the charts and volume. Cleared a lot of things up. Many thanks dude...

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  36. Hey Tim, great video, really insightful. I have a couple of questions that you don't look like they have been covered here:
    1) you keep stressing the importance of which market maker you use - how and why do you use them? If you are trading that stock when its downticking so quickly, why is it more important that you use a specific market maker rather then just getting the order filled, surely an order to buy at 0.500 is an order to buy 0.500.. or is it?
    2). You pointed out when the bid went over the ask - how and why is this significant?
    3). Finally you mentioned you will put in an order say on the bid and then perhaps just under it, whats to stop both these orders getting filled so quickly?
    Sorry for the newb questions man, i appreciate if you're too busy to respond, im still learning so much and have been watching you on the HTMM dvd!

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  37. Hey Tim, great video, really insightful. I have a couple of questions that you don't look like they have been covered here:
    1) you keep stressing the importance of which market maker you use - how and why do you use them? If you are trading that stock when its downticking so quickly, why is it more important that you use a specific market maker rather then just getting the order filled, surely an order to buy at 0.500 is an order to buy 0.500.. or is it?
    2). You pointed out when the bid went over the ask - how and why is this significant?
    3). Finally you mentioned you will put in an order say on the bid and then perhaps just under it, whats to stop both these orders getting filled so quickly?
    Sorry for the newb questions man, i appreciate if you're too busy to respond, im still learning so much and have been watching you on the HTMM dvd!

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    1. 1. If you have a broker like speedtrader with routing options, you can choose which market maker you send your orders too. This can be advantageous, because let's say CSTI is selling heavily on the ask and you want to buy, you can route directly to them instead of sending a normal limit order which would go to NITE and put you in line on a first come first serve basis with everyone else.

      2. Just a possible sign of changing momentum, varies case by case but i do tend to take note if this happens

      3. Trying to sell into weakness on an OTC stock can be VERY tough to fill, sometimes I may get both fills, but even if I did i'd probably be happy about it haha. I just send orders different places and try to fill what I can

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  38. Watched. Enjoyed. Will continue to watch and learn. You are brilliant in your understanding and ability to translate to your viewers. It is really easy to follow you and your lack of expletives is refreshing.

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  39. Watched. Enjoyed. Will continue to watch and learn. You are brilliant in your understanding and ability to translate to your viewers. It is really easy to follow you and your lack of expletives is refreshing.

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