Page 270 - THE MARKET WHISPERER

266 PART 9 - The Trading Platform

The T&S window shows every transaction executed for
a stock. The usual display is for the latest trade to appear
in the window’s upper section. As you see, the latest trade
occurred at $54.25 for a quantity of shares listed as “1”,
in other words, 100 shares. The trade before that was for
400 shares. If you look a little further down, you will find
a trade at $54.249, a transaction that only market makers
are capable of making as they “cut” the price between
buyers and sellers, and it is the first in the list between the
spread. This is their advantage area, since you and I have
no legal ability to perform trades with fractions of cents.

Why is the T&S window so important to me? For several reasons.
• The first reason is explained with this example. Let’s say a large scale

buyer is not interested in showing the quantity of shares she or he
wishes to buy at $54.25, and therefore I cannot see the true quantity
that the buyer seeks. But the information that the buyer cannot hide
from me concerns the number of transactions, ie: the volume of trade
occurring at that price. In the T&S window, I see every trade and the
rate at which they are being executed. This information, together with
the quantity of shares displayed in the market depth window, will give
me a reliable and realistic image.
• The second is the following: the T&S window has an additional important
characteristic: the color used to display each transaction. When a trade
occurs where a buyer is willing to pay the supply price, known as ask,
which in this case is $54.26, the color of the line in the T&S window,
representing the quantity being sold, will be green. Green means buyers
are more aggressive than sellers: in other words, they are willing to pay
the full price requested by the stock’s sellers. On the other hand, when
a trade goes through at the demand price, ie, the bid, it means sellers
are capitulating to the buyers’ demands, and they are willing to sell at
their price. The transaction color in the T&S window will be red. A
sequence of red colored trades tells us that buyers are under pressure,
and a sequence of green colored trades tells us the sellers are under
pressure. If the spread between buyers and sellers is greater than one
cent, a transaction might be executed at some intermediary price, which
would be colored white. You can define these colors yourself on your
trading platform, and even add additional colors for various other types
of signals.