I mean, I don't see the relevancy of something that is supposed to provide transparency to something that is inherently opaque. It just seems to me that L2 provides a false sense of market clarity, when there is none.
L2 provides only part of the picture so is less useful than if it provided the whole picture? I think that is fair. The same can be said about any information about the market. The market has so many particants and factors at play at once that it is not possible ever to know everything about everything. No computer is powerful enough (or database large enough) to record every detail of the current state of the market and its participants to the extent required to ascertain with certainty what the next state of the market will be. The market is physically deterministic but epistemically random.
Consolidated Level 2 from every exchange offers information you wouldn't know if you were only looking at the NBBO. The relevance of Consolidated lvl 2 depends on how your trading- if you're swing trading then it's a waste of time, if your scalping the tape then it's almost essential.
hmm not the best comparison imho. When someone subscribed to L2 quotes then that strongly suggests shorter average holding periods and higher frequency trading patterns. With that one has approached a territory where there are market players and direct competitors that rip someone apart with L2 or other limited information in the hft space. Here there is an unfair market where some do for sure have more information. What you allude to is the overall market where only those with insider information may have a distinct advantage.
I'd say "L2" is close to useless in equities. It's still useful in futures to an extent (depends on the instrument) but you have to learn what's real and what isn't.
agree, anything that represents a complete market is valuable information. Equities trade in a fragmented market in the US and hence L2 means next to nothing.