Direct access stock brokers
Online Trading Academy has its roots in the largest trading floor in the Western US, founded in by Eyal Shahar. Independent traders needed training to be successful in their investments, and soon a teaching model was born.
Enriching lives worldwide through exceptional financial education. Prior to the advent of Direct Access Trading, traders would place orders to buy or sell stock through a middleman, known as the traditional brokerage firm. A trader trading in this way would incur various problems due to the presence of the middleman, such as a delay in trade execution or execution of the order at a price outside the best market price available.
Direct Access Trading is a method of trading stocks without a middleman, which eliminates many of the problems associated with traditional brokerages. Direct access brokerage firms eliminate the trading desk or another middleman from the trade execution process, by allowing traders to connect directly to the market via a computer and internet connection.
Through this direct connection, traders see the "inside market" - the best prices at which the stock can be bought or sold - as well as all the other players in the stock, thus allowing the trader much more information and a greater opportunity for profit.
Direct-access trading - Wikipedia
This transparency is displayed in a format called Level II. Direct Access Trading DAT and Online Trading trading via the internet are actually two different forms of trading stocks or other types of investment vehicles. While trading via the internet has empowered the individual to take a much greater role in his or her own investment strategy, DAT goes one step further.
With the advent of legislative changes in the stock market industry over the last 15 years, Direct Access Trading has become a viable and profitable form of trading. Although the NASDAQ was the first market to allow DAT, others have followed suit. An example Level II window is shown below.
To understand more about Level II and Direct Access Trading, you will need to be familiar with some basic trading terminology:. On most DAT systems, the Time and Sales Report is found on the right hand side of the Level II quote screen.
That is because the Prints report the actual cross or meeting point of actual buyers and sellers for the moment, where as the Bid and Asks are merely a display of intentions. The information that is reported in the Prints is what software packages use to plot the charts of the stock or underlying security, calculate its effect on an index and is used by officials to correct or rectify trades. The Prints are also essential to traders for determining exactly where the market is trading at the moment in order to fine tune their order placing technique whether it would be for scalps, swing trades and even longer-term trades.
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