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Level II: The Unsung Hero..
Not the user friendliest of things to grasp, yet it’s such an important tool to master. There are a plethora of technical overlays out there. And to each their own, it works for some and it doesn’t for others. As a Day Trader myself, I love to keep it simple stupid. All those overlays, I stay clear off. Nonetheless, every now and then I resort to the MACD and VWAP. That’s just about it. Before you come attacking, in my defence all these indicators and overlays are “L**A**G**G**I**N**G ** I**N**D**I**C**A**T**O**R**S”. The ONLY real time indicator is Level II (IMHO).

Think about it 🤔🤔? Everything else needs for things to happen before a clear move is provided. If we had real-time indicators, we’ll be yippee-ki-yayi__n around camp fire. If you’ve been in the markets long enough as a day trader, you know every second counts. You need to make adjustment to your plan the moment you enter a trade. These overlays are great if I want to SWING or hold for the long term. But for day trading where I’ve been in plays that lasted less than 10mins. They’re of little use to me. If they work for you, cheers to you..

Level II is just showing where both parties are, buyers and sellers. I describe it as this “it’s _like __ _a _confirmation _bias__, _seeing _al__l _the_ marke__t participants, _at _what _prices _an__d _their_ order _sizes_ eithe__r _confirms _my _thesis _on _the_ stock _or _debunk__s _it_”.

Like Siamese twins, you can’t use level II without T**i**m**e ** & ** S**a**l**e**s.** The former confirms my bias, the latter adds that extra layer of confirmation. Say I see about 5 market makers with 100,000 share size each at $12. That’s a lot of shares to offload, from the level 2 I can tell if the buyers can chip away at those sellers. Is that price point and those MMIDs are still there after a min or so, with confirmation from the T&S display of “red prints”, it’s as clear as day that buyers are getting overwhelmed. And that momentum might be shifting, making $12 a solid resistance candidate. That might be sign to take on a SHORT position. Cool trick right 😎😎..

At the end of the day, as I mentioned early on, do what works best for you. Understanding and being able to interpret Level II made me a better trader. Albeit challenging, once you get the hang of it, it’s pretty cool..

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