Level 2 Analysis

Discussion in 'Technical Analysis' started by VinceField, Oct 19, 2020.

  1. How do you use level 2 to inform your trading decisions? What do you look for and what does that tell you about what is likely to happen with price action?

    One thing I've seen is that if there is a big buyer sitting and waiting lower than the bid price, this is a bearish sign, as once that buyer is sold off, the price is likely to shoot down.. that support is gone.

    Likewise, if there is a big seller sitting and waiting lower than the ask price (asking for a higher price than the ask), this is a bullish sign, as once this seller is bought off, the price is likely to shoot up.. that resistance is gone.
    Dollardogs likes this.
  2. Sprout


    Use in combo with a filtered T&S streams. For lack of a better term, lot’s of ‘games’ are on lvl2. To see the ‘games’ more clearly, match order size on the T&S streams with price and volume zones. It requires margin to place even an ‘unintentional’ order.
  3. Weird, I was gonna start a thread on this myself. New to trading, keep hearing in passing that Level 2 is essential. Look forward to hearing what people say.
  4. qlai


    For some, level2 IS the strategy. For some, enhancement to existing strategies. For others, useless noise.
    Dollardogs likes this.
  5. maxinger


    Level 2 analysis is useless unless you are doing heavy scalping.

    Just focus on the chart.
    When it is time to enter a trade, that's where you just look at level 1 bid-offer price.
    In MANY cases, you don't even look at level 1 bid-offer price;
    you simply just press the market order key.
    easymon1 likes this.
  6. Why is it useless?
  7. maxinger


    for certain products like NQ, the tick size is extremely tiny and the price movement could be rapid.
    Even for level 1, we can't register those bid-offer numbers.
    Only superman and robots can do it.

    When the market is moving very fast, I don't even look at level 1 numbers because time is of great essence.
  8. But say you're lurking on a stock in a slower moving market, is it helpful then?
  9. easymon1


  10. Lol point taken
    #10     Oct 21, 2020