How to Read Time and Sales why it is Important for Trading

[Music] hey guys welcome back another educational video coming at you uh today hit the like button hit the subscribe button we have so much information to pass along to you guys uh today we're gonna have a conversation uh just about time and sales so we talked in our previous video a little bit about the level two and all the different aspects of the level two and how important it is to a trader today we're gonna focus on the time and sales so another aspect of day trading that you have to know what it is you're looking at so let's bring in the guys and kick things off here about time and sales guys we have so much information to cover here from size what is printing as far as gateways are concerned uh we can talk about the time itself and how important that is yeah i mean look you cannot have a discussion about the markets without looking at the time and sales why because everything is about actual transactions that take place yeah you can see the bid and ask on your level two and yeah you can see historical prices in your charts but the time and sales shows you real time every single trade that's going through uh you have the price it happened at you have the amount of shares that went through and the market center because as we discussed in our other video you have all these different gateways and i'm looking at a nasdaq stock like siri which has you know half a dozen different gateways you can trade on you see the time that these comes through there's so much information to be gleaned here some people trade using momentum in the time and sales some people don't like to look at small prints they look for those larger size orders i mean there's a million ways either you can digest the time and sales here uh honestly it's one of those things where you should never open up any kind of trading layout if you're not looking at the time and sale sean for sure and i mean especially in this environment guys there's a lot changing uh you know every day here at the exchange and what we like to notice here is the market center so i'm going to pull this out a little bit on our time and sales to show some of the different columns that we do have here of course px is going to be price for us size that this is very important for me i mean the time is is important too these are just time stamps right if you're looking at stocks that are active like this on one we have up here now is intel so you're going to see trades happening pretty much every second going to give you an idea of sort of the liquidity uh that's going through here but look at this i hope you guys can see this but the market centers come through here like for example all of these d's a lot of traders very concerned about dark pools hey look super important find out where the liquidity is coming from you're going to see ds here noting the dark pools you're also going to see cues that comes from the nasdaq exchange itself so if you're saying hey where can i find shares well just look to see what exchange is printing the most p is arca k is edge x and you know what attached to this video i think it'd be a great idea and look below we'll put a little indicator here of which market centers are which uh indicator here so which layer letter represent which market center p arca q nasdaq zed batch it goes on and on that's so important for me because you definitely want to be able to see where the liquidity is coming off and then use that to trade accordingly like when you're seeing these big prints come off on d prints you know you have to use a dark pool route to access those shares that's so important to note i'm going to take it a step further here because i i feel like a rainbow on your time in sales and i'm looking at apple and it's the same thing here now most people are going to be familiar with hey a red is going to mean a tick came off the buy side so someone selling to the bid a green is going to be someone buying from the ass or upward momentum but there's all these blue ones in the middle i've seen people have it white or a different color i have blue and that means a print that's inside the bit in the ask and on apple look at how many that is and they're all coming off as d prints because those are hidden midpoint orders and it's important to know how often they're happening because sometimes you can save quite a bit about a money if you have access to those dark pools instead of executing paying the spread which is the difference between the bid and the ask you can execute in the middle and it's the kind of thing that adds up if you're very active trader uh certainly if a stock had a bigger spread than one penny maybe you're saving you know five cents on a big spread every time you execute if you make 20 30 trades in a day that's the kind of thing that can add up for you but simply knowing that that liquidity is there and what it might mean could be important uh to your trading uh certainly if you're not looking at it make sure you find a way to be able to have access to that all right guys i want to focus a little bit more on this uh market centers uh and the prints that are coming off and and more importantly the liquidity that's coming off from those different market centers i think it's very important in our our previous video we talked a little bit about the different gateways the different options that you have when it comes to sending your order to the market and the relationship that the time and sales has with the level 2 is very important for people to understand if you if you've never seen one of these before and you've never seen a live print before as we're showing you in this video it might be a little bit confusing so let's dive in a little bit more to the market centers and the different gateways and the relationship between the two and how we can take advantage of them maybe when it comes to actually trading i actually have a good example here i happen to be long pinterest uh and look i'm looking at the chart look at this we got this nice little top at 19 30 1935 we've been getting out a couple of times off of what looks like a shy of the high of the day now if i say to myself i'm looking to get out of this position i want to be a seller i don't want to lose the spread i want to see if i can get out on the offer maybe i want to get 32 or 33. well one of the things you might consider if you're working a larger position is well what's actually printing if i want to have the least amount of impact in the market and the best chance of filling i'd look to see where the green prints are coming off for the buy prints i see a lot of t's that's going to be nasdaq this nsb so i could go ahead and join that line if it's going to be advantageous to me the other thing you can you want to consider here if you're exiting your position is if i need to actively get out what bids am i going to look for am i just simply going to go for the most liquidity or am i going to concern myself with just routing to all of them at once a bit of a bonus point that you really really need to consider here as well is when you're watching the stock move in and out through these different prices let's say it takes out 32 so the bid goes away in this case it just took out 33 on the offer what prints were associated with that there were almost no prints off the time in sales you didn't see anything that was green so a lot of what's happening is just people putting orders in and pulling them whether it's algorithms so it's always good to have a feel for how much true liquidity is there when you go to execute because what i just saw at 33 was almost no prince a few dark pools there and then the offer was completely gone you saw it go down not up why because there was no actual buying yeah i mean i have that that's a perfect example i love that uh sometimes you can call it spoofing orders or whatnot you're looking for actual fills and when i was training uh a bunch of traders i used to talk about uh all of these different gateways as different stores so you're trying to find out which store has all the sales and then the time and sale is like your bill of sale so every single time there's a trade made it's actually coming off here and basically printing like a receipt all the trades that are going through ge is one of those stocks where you get a lot of in between so sure you still think that the level is 33 by 34. but look at all of these prints here if you could see 33 74. these are decimal place orders and look where they're all coming off dark pools so you see a huge print come through here 33 half 33 370 but then you see the market center here all of these dark pools so those are trades that have to be executed away from major exchanges and and that can be a very very big thorn in some trader sides if you don't understand them or on the flip side if you do have access to some of these dark pools then you can get favorable pricing especially on a stock like ge where you don't want to necessarily wait in these lineups so what you do instead is trade sub pennies inside the range here like somebody just got long 3307 and then you see over here different prices coming off 32s 3250s so on and so forth so even though they're sub pennies if you're trading size you know 4 000 shares 5 000 shares sometimes just taking some of these ticks very very important and if you don't watch the time in sales then you may be sitting here with sort of your hands on your hips and saying how are these trades going through well now you're understanding hopefully that when you look at a live level two and a live time in sales what they're indicating here and look sometimes you're gonna miss trades and this is why a lot going off on venues outside of the normal brendan uh guys as a last point here that uh we can cover i want to let everyone in on a little bit of a secret if you've if you've been used to staring at a retail platform and you've been used to using a retail platform to trade you pull up let's say apple for example your retail platform might actually show you one price for that stock and you can buy or sell that stock at that price let's maybe if somebody's coming from a retail platform they don't really understand even what the bid or the offer is let's let's break this down a little bit further and explain you know the difference in the bid and the offer and how it's displayed both on the level two and how we can take advantage of that when we're seeing those prints where we're seeing those prints coming off on the time of sales yeah i mean i get the primary advantage of this level two in time and sales is uh when you do see those two prices the bid here these are all the people on the level two looking looking to buy the stock and the prices they're willing to pay and subsequently on the offer you see the same thing that spread which is the difference between the two or these prints that come off in the middle that's an opportunity if you have the access to the time and sales and the level two because that's money that you can be saving now it might not seem like a lot uh when it's something like an apple but believe me it adds up over time and sean's example with ge is an important one you know if it's a six dollar stock a half a cent if you're trying to catch a one percent move on general electric is six pennies uh half a cent is a big deal especially if you're trading ten thousand shares well that's fifty dollars that's going to add up over time and when you have direct market access you have the time and sales be able to see those midpoint prints and access that liquidity looking at it on your level two in time and sales all of a sudden you're able to have different styles of trade with larger share size where you have different types of a gold when it comes to growth and those half prints i'm telling you right now those are very very important as a profit center it makes you a more efficient trader and reality is if you don't have access to the level two and the time in sales it's almost like playing checkers instead of chess when it comes to trading i mean it's hard to follow neil that's a great explanation right there and uh yeah for those of you that don't really follow you know bids and offers basically anything on the left side or where the buyers are and on the right side are the sellers so as you go you're just looking for interest here and i have a stock here bac very similar interest on both sides uh you look at here at the different size levels and yeah this is a good example of basically an equal marketplace buyers and sellers matching up and as trades happen if you want to go to market you can see right here roughly arca has 4 500 shares nasdaq has 37 shares 3 700. so if you want to buy and sell it's a great spot to find the liquidity and this is where you can find the buyers and sellers a big point to note here guys this is a very important aspect when you come up to key levels i like the even dollars like when bac gets to 22.50 or 23 dollars you're gonna see some significant size on the buy or the sell side use those as indicators as well and shawn when you talk about those levels and the time in sales if i see a massive level let's imagine apple had one at 318 even had a 100 000 shares on the offer when it goes through that price i'm gonna look at the time and sales did that order get filled or that order pull if you look at a chart you just see that it traded through that price there is a big difference whether or not someone sold 100 000 shares on apple or 318 or whether someone was going to sell and pull that order the impact is going to be different and if you don't put these two together the time and sales and the level 2 you're going to miss that all together absolutely great stuff guys we'll uh we'll wrap it up at that i mean so much great information when it comes to time and sales you have to understand what is printing in that very second and we mentioned at the beginning of the video that the time column is important as well and this has happened to many traders say you have to be out of all of your trades at the end of the day when the market closes at four o'clock if your computer happens to be off a few seconds the time column on your time and sales comes in very handy because that's coming from the exchange so a great way to know when you need to be flat at the end of the day we talked about the gateways what market centers are and how you can identify them on the time and sales we talked about where the prints are coming off whether it be on the bid or the offer or even a midpoint in between the bid and the offer great information hope you learned something about time and sales let's go over to malaria hey brandon thank you for this great explanation please subscribe to this channel and catch us live every day at 9am eastern time

Channel: More TraderTV Live

Views: 48,712

Keywords: time and sales trading, time and sales, time and sales interactive brokers, time and sales explained, time and sales thinkorswim, day trading time and sales, time and sales strategies, time and sales trading strategy, day trading, time and sales for beginners, how to trade with time and sales, how to read time and sales, top time and sales strategies, understanding time and sales, Robinhood time and sales

Id: wxGdqokWIro

Length: 13min 32sec (812 seconds)

Published: Fri May 29 2020