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otherwise receive similar benefits. The cost to the trader is usually a small fee for the processing of the trade transaction. |
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The fact that orders (within SOES size/limitation) can be executed in seconds at the quoted market gives the DAET trader assurances of liquidity. Why is this so important? Primarily, because it enables the DAET trader to limit losses by being able to liquidate any unwanted positions in a matter of seconds regardless of how busy the market conditions are at the time the liquidation decision is made. As I discussed previously, and will emphasize continuously, cutting losses quickly is the key to trading success. In many other trading arenas it is not always possible to liquidate quickly, but in DAET trading it is routine. The peace of mind in knowing that you have hands-on control over your losses is the single greatest advantage of the DAET system. |
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Capability of Spotting Market Trends |
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Utilizing the Nasdaq Level II market quotations in conjunction with DAET execution allows the astute DAET trader, in many instances, to see previews of coming attractions, in that one can identify a trend in a stock early while there is still an opportunity to get in before the trend accelerates. By closely following market makers' price changes, an astute trader can many times observe a stock beginning to trend either up or down while still having time to access one of the remaining market makers before it has traded with someone else and has changed its price quotation. This enables the DAET trader to participate in the move while it is taking place. On other exchanges, the only basis for identifying a trend is by last sale price reporting, which tells you what already happened as opposed to what is in the process of happening. This is a subtle difference, but it can make the entire difference when day trading. Market makers, floor traders, and "locals" all have a similar advantage on the listed equity, option, and commodity exchanges. Now, for the first time, the DAET trader can also enjoy inside "flow" information. |
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In addition, a first-class DAET system will have an automated "tracker" program, which will monitor the entire Nasdaq market for any price movement you choose to see. |
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