Comments on Welcome to the Gutter: Moving to Speedtrader

All I'm saying is you don't want to be tha...

2010-05-11T20:50:37.041-07:00

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.

Oh, I meant Reaper and IL use Speedtrader, not Rea...

2010-05-11T20:30:38.648-07:00

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

Hey, JV, Thanks for the comment. The thing with ...

2010-05-11T20:29:50.779-07:00

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.

It's tricky trading without any Level 2, since...

2010-05-11T20:17:42.084-07:00

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