Another must read for the would-be trader. Christopher Farrell draws upon years of experience as a NYSE trade floor specialist by revealing how specialists make money, how to mimic them, and how to keep on the right side of every trade.
Farrell will teach you how NYSE specialists have been profiting for years by exploiting the bid-ask price, naive public market-orders, taking the opposite side of bad trades, and manipulating the supply-demand picture to their advantage -"keeping the general public's interest in mind" -all within the means of regulatory.
According to Farrell, specialists, equipped with better tools, better timing, and better information, -never loose, by trading only when the odds are in their favor.
In Farrell's world, the exchange is a place where common investors and trade floor specialists duke-it-out for profit. A place in order to win, you must first understand the house rules, their strategy, and how to spot them in a trade so you never have to bet against the house.
Here are just a few things Farrell taught me:
Did you know that specialists are required to place your order before theirs?
-They are, and that's how you can exploit the bid/ask price, too. Just don't let specialists become of aware of your presence, cautions Ferreall, or they'll "pick you off."
Did you know there was a way to find out where specialists are lurking in the stock?
-It's called the "open book." Due to recent regulations, NYSE specialists are required to record price, volume, and time. You can look up a particular stocks "open book" activity on either the NYSE or the NASDAQ.
Did you know limit orders are a form of negation and can be used as such?
-It can. Instead of paying on the ask price next time, set your order at the bid.
