Tuesday, May 11, 2010

Moving to Speedtrader

Got caught in the MCGI dump today....no way could I get out in Sogotrade.  So I'm moving funds from my Thinkorswim account to Speedtrader so I can have direct access for when I go long on OTCBB's/pink sheets and thus be able to get out more quickly when such situations arise.
Posted by at 5:17 PM
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4 comments:

johnnyvento said...

It's tricky trading without any Level 2, since only there can you identify where you can get out. Sure, bids can get pulled but on these low-priced illiquid stocks there was probably no underlying bids to begin with. Since I'm not willing to pay for OTCBB data feeds I've given up on trading these kind (the best ones are NSDQ listed anyway) but you'll notice that the people that trade these kind- Sykes, Reaper, IL- all have L2 feeds. I don't know why everybody was in MCGI- I know it was a volume break out but it had serious resistance in 2.40 area- but for those illiquid kind you really need to know how you can get out- I mean the exact MM and target price- and you have to be the first one to hit that guy when you are wrong. That means you have to have hot keys to target ARCA, NYSE, etc. If you don't have the L2 feed then you are putting in limit orders that are basically meaningless. There's no excuse for Sykes to get caught flat-footed since he has L2, but if you don't have those feeds you are trading blind.

Now that I've been a complete downer, I want to tell you that I admire your continuation of your blog and the discipline that you apply to all areas of your life- your trading, your fitness profession, and if you do write a book, I will be the first in line to read it.

JV

May 11, 2010 8:17 PM
James Krieger said...

Hey, JV,

Thanks for the comment. The thing with Sykes is that even though he has L2, he can't directly hit the MM's because he doesn't use a direct access broker. Reaper and Sykes use Speedtrader which is a direct access broker, so they're able to direct hit the MM's.

People were in MCGI because a lot of these pumps show a pattern of an initial morning spike, a pullback and mid-day consolidation, and then a ramp up into the market close. Then they gap up the next day. Reaper's been playing that pattern a lot and has been successful. MCGI showed the same pattern....but again, there's the big risk of a dump whenever you buy these pumps. I thought I would be able to get out if I put in my order before the open, but I was wrong. Hence why it's critical to have a direct access broker if you're going to play these pumps.

An OTCBB/pink sheet data feed is only $10 per month with Speedtrader, by the way.

May 11, 2010 8:29 PM
James Krieger said...

Oh, I meant Reaper and IL use Speedtrader, not Reaper & Sykes.

May 11, 2010 8:30 PM
johnnyvento said...

All I'm saying is you don't want to be that guy. You don't want to be that guy that couldn't get out of the stock and writes Sykes saying he lost $1300 because he couldn't get hit. You want to be that guy that got out early because you had direct access and you saw the MM and you hit him and you got out. Successful day traders get out and unsuccessful day traders can't get out and whine that they took big losses.

I'm being a complete bitch, but you get my point.

May 11, 2010 8:50 PM

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