TIM: Learn Level Two is a 6-hour multi-disc DVD package with a 150+ page instructional manual that teaches viewers how to use and read Level 2 quotes. Traders often use Level 2 quotes to choose better trades and get better executions…a few cents/share here and there on every trade really does add up so I’m gonna teach you how to profit from predicting where other people place their stop losses, recognize ideal setups, market maker games and pockets of opportunity in order to minimize mistakes and get ideal executions.
Level 2 data displays the best bid and ask prices (also known as “top-of-book”) for each market participant in a given security. In other words, at a given time there may be several market makers participating in trade-matching for a specific stock. Level 2 data will display the highest bid and lowest ask for each individual market maker.
Level 2 information is of interest to traders and brokers because it indicates the buying and selling pressure behind individual securities.
Similar in format to live streaming share prices, a typical Level 2 screen is split in two vertical halves and will show orders on both the bid price of a security (left hand side) and the offer price (right hand side).
On major, heavily traded stocks the “depth” of the orders can quite often be in excess of 20/30 orders to both buy and sell at lower (left) and higher (right) prices.
Traders can use this information to predict the short-term movement of a share or security in conjunction with volume traded, and attempt to profit from this information, which is usually legal as the information is in the public domain. The reason for this is that Market Makers sit “behind” such a screen by being obliged to both buy and sell the share at the posted price up to what is known as normal market size.
For certain market centers such as NASDAQ, a full depth-of-book (DOB) is available, whereby every quotation for every market participant is displayed.
That’s nice, but it doesn’t get into the details of how to use Level 2 quotes to your advantage in choosing the best trades, getting better executions and not falling into market maker and advanced trader traps like this 6 hour DVD package does.
I’ll be filming this over the next few days using LiveStream’s advanced video tools so DVD students will be able to see for the first time Level 2 quotes up close and personal…after all, to truly use them to your advantage, you should get as comfortable with them as possible.
Topics I will cover include (this is just a taste, not a comprehensive list):
-Level 2 glossary and terms
-Level 2 basics, verrrrrry basic even for the biggest beginners, but basics are good
-Recognize the five signs of when is a good time to buy a stock
-Recognize the five signs of when is a good time to sell a stock
-Recognize the five signs of when is a good time to short a stock (yup, they’re all slightly different)
-Market market and hedge fund tactics used to trick retail investors/traders
-Early morning vs. late day trading tactics, traps and tricks
-The best and worst Level 2 software to use
-How to analyze Level 2 data on Pink Sheet & OTCBB-listed stocks
-How to get a few more cents per share on ALL your executions (the savings can add up over time)
I’ll tell you this, Level 2 understanding and analysis isn’t required to earn huge stock market profits, but I gotta say that out of the $3 million or so in trading profits that I’ve enjoyed over the past decade, this skill is one of the most important.
You know I have a ton of other instructional DVDs explaining how I use everything from chart patterns to hardcore research and fundamentals analysis. This new DVD package really rounds out my educational products nicely.
Learn it, trade it, LOVE it, most of the time profit.