How do I find the AX on Level2? - Trading-Lab

rookie · #1 07-11-2007, 02:59 PM

hello,

I've been practicing with Level2 for a few months now, trying to make sense of all the mess

. For example, I've been studying Level2 and getting used to finding who the Ax is in a particular stock.

Now this so called 'Ax' can change any day correct? Or are there stocks which are well known for being "controlled" by a certain market maker? Also, do you have any additional tips for me on how to spot this Ax, besides what's already been written extensively on books?

thanks!

ProTrader · #2 07-16-2007, 02:15 PM

Level2 is prone to a lot of manipulation, these days. Orders and size can be hidden, and MMID can be anonymous. It's becoming increasingly difficult to find out who the AX is in a stock, due to the reasons I explained above.

Yes, the AX can change on any given day. my advice: take it slow.

daytraderB · #3 07-18-2007, 05:45 PM

the so called AX on Level2 is usually the market maker controlling the action on a stock. Finding it on Level2 has become a lot more difficult over the years. MMs also use ECNs to route some of their orders. Thus, they hide their real size.

The best way to find the ax is to build familiarity with the stock. watch the stock trade on the Level2 over and over again, and all of a sudden it will become apparent to you. Trading off Level2 is no easy business...........

ManhattanTrader · #4 07-25-2007, 12:30 PM

Quote:

Originally Posted by rookie

hello,

Now this so called 'Ax' can change any day correct? Or are there stocks which are well known for being "controlled" by a certain market maker? Also, do you have any additional tips for me on how to spot this Ax, besides what's already been written extensively on books?

thanks!

Not only can the AX change on any given day, there can be an ax in the morning and another ax in the afternoon. The AX is not static. Sometimes there's even no ax at all.

ProTrader · #5 08-02-2007, 03:00 PM

I like to use the Monthly Share Report to build a list of market makers I should keep a closer eye on. I usually toss out ECNs as everybody can use them. I also don't count retails ECNs and wholesalers. I then look at the first 5 spots on the report. It's worked pretty well for me.....

rookie · #6 08-23-2007, 02:34 PM

thanks all. Can anybody provide a live trading example of how the Ax plays a stock?

ProTrader · #7 08-24-2007, 01:47 PM

sure not a problem.

Scenario: Ax on the ASK.

Stock is struggling to move higher when the overall markets are rallying. Stock has no problem falling when the markets turn down. Watch very closely the ASK side of your Level 2 as the Ax is probably right there, preventing the stock from going higher and following it on the way down. go with him. short when the overall market bounces and cover when he's out.

rookie · #8 08-24-2007, 02:40 PM

thanks for your live trading example, protrader.

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#1 07-11-2007, 02:59 PM
rookie Member Join Date: Jul 2007 Posts: 86	Finding the AX on Level2? hello, I've been practicing with Level2 for a few months now, trying to make sense of all the mess . For example, I've been studying Level2 and getting used to finding who the Ax is in a particular stock. Now this so called 'Ax' can change any day correct? Or are there stocks which are well known for being "controlled" by a certain market maker? Also, do you have any additional tips for me on how to spot this Ax, besides what's already been written extensively on books? thanks!

#2 07-16-2007, 02:15 PM
ProTrader Senior Member Join Date: Jun 2007 Posts: 109	Level2 is prone to a lot of manipulation, these days. Orders and size can be hidden, and MMID can be anonymous. It's becoming increasingly difficult to find out who the AX is in a stock, due to the reasons I explained above. Yes, the AX can change on any given day. my advice: take it slow.

#3 07-18-2007, 05:45 PM
daytraderB Member Join Date: Jun 2007 Posts: 63	the so called AX on Level2 is usually the market maker controlling the action on a stock. Finding it on Level2 has become a lot more difficult over the years. MMs also use ECNs to route some of their orders. Thus, they hide their real size. The best way to find the ax is to build familiarity with the stock. watch the stock trade on the Level2 over and over again, and all of a sudden it will become apparent to you. Trading off Level2 is no easy business...........

#5 08-02-2007, 03:00 PM
ProTrader Senior Member Join Date: Jun 2007 Posts: 109	I like to use the Monthly Share Report to build a list of market makers I should keep a closer eye on. I usually toss out ECNs as everybody can use them. I also don't count retails ECNs and wholesalers. I then look at the first 5 spots on the report. It's worked pretty well for me.....

#6 08-23-2007, 02:34 PM
rookie Member Join Date: Jul 2007 Posts: 86	thanks all. Can anybody provide a live trading example of how the Ax plays a stock?

#7 08-24-2007, 01:47 PM
ProTrader Senior Member Join Date: Jun 2007 Posts: 109	sure not a problem. Scenario: Ax on the ASK. Stock is struggling to move higher when the overall markets are rallying. Stock has no problem falling when the markets turn down. Watch very closely the ASK side of your Level 2 as the Ax is probably right there, preventing the stock from going higher and following it on the way down. go with him. short when the overall market bounces and cover when he's out.

#8 08-24-2007, 02:40 PM
rookie Member Join Date: Jul 2007 Posts: 86	thanks for your live trading example, protrader.