Level II Quotes

Discussion in 'Strategy Development' started by sportmatt37, Dec 5, 2005.

  1. Hello...not sure if this belongs here but w.e....

    I usually trade on a 3-10 day time basis but recently started to daytrade. I was wondering how some of you daytraders use level II quotes? Is there anything of particular importance to pay attention to while watching them? Thanks a lot
  2. Bob111


    Excuse me for little bit off topic, but I have question for IB’s L2 users-how was the quality? Is there all MM's and ECN participants are shown along with time and size of their orders?
    How was the quality, if you compare it with MB trading for example? Any delays?

    Thank you!
  3. yes, there is a book, which (if you can get past all the commercials) has a great section on level II strategies that will give you a good head start. The book is "Tools and Tactics for the Master Day Trader." Disclaimer: THE MAJORITY OF THIS BOOK IS A BUNCH OF BUNK. I'm giving you the title so that you can only use it as a starter!

    you can't use it alone, though - you have to look at the tape. Those are just quotes on the level II, the tape shows you the rest.

    good answer? prob not complete.....
  4. thanks a lot...any books you WOULD recomend for other aspects of daytrading?
  5. L2 quotes became pretty much useless when they allowed the public to access them in the mid-1990's. What happens is that firm's have automated programs with "if - then" statements that send in and cancel orders continuously throughout the day. This hits the various ECN's and even the NYSE at times. Small trades on OTC stocks really don't help much in picking entry/exit points.

    Valuations have taken a much bigger role in determining trade entries...watch the "peers" and use the overall market PREM for intraday movements.

  6. thankyou...just to clarify, what do you mean by peers?
  7. When picking your "children" - the stocks that you will trade every day, you do the fundamental analysis of that stock and a couple of peers....for example: Trade BAC, peers might be JPM or Citigroup. You want to know each stock extremely well, and see how it trades compared to the overall market, it's industry group, and it's particular peers....sort of a "mental relative strength."

    All the best,

  8. thanks so much