StockTrader6080
10-05-2009, 12:49 AM
Not ALL orders are shown on the Level II screen.
So, the concept or idea that when the best Bid gets filled, that it will downtick to the next lower bid price, or that when the best ASK gets filled, that it will uptick to the next higher ASK price, is only good if EVERYONE actually shows their orders.
The CoolTrade robotic trading system and more than likely the institutional computers may not be floating limit orders at all, and thus hiding their orders until they have reached the price target that they have set.
Also, large limit orders could be placed below the best bid or above the best ask, to make you think there is more demand on the buy or sell side, only to have the orders cancelled before the price gets there.
It's important to understand the Level II screen, but be aware that what you see is not always reality.
Keith
Goodbye Mutual Funds. Hello CoolTrade Robotic Traders.
So, the concept or idea that when the best Bid gets filled, that it will downtick to the next lower bid price, or that when the best ASK gets filled, that it will uptick to the next higher ASK price, is only good if EVERYONE actually shows their orders.
The CoolTrade robotic trading system and more than likely the institutional computers may not be floating limit orders at all, and thus hiding their orders until they have reached the price target that they have set.
Also, large limit orders could be placed below the best bid or above the best ask, to make you think there is more demand on the buy or sell side, only to have the orders cancelled before the price gets there.
It's important to understand the Level II screen, but be aware that what you see is not always reality.
Keith
Goodbye Mutual Funds. Hello CoolTrade Robotic Traders.