barrychucks
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what do pro traders that use level 2 specifally look for as in patterns, etc....? any help is great
what do pro's look for
- Thread starter barrychucks
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Jaydee
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new_trader
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Pro traders look for suckers, and they always find them.
The problem is that Level II is no longer the useful indicator of sentiment or buying/selling pressure it used to be...this is due the automation/algos that have appeared in the last 4 to 5 years. For example, there are algos that only show a small sliver of the total order size to hide the real volume and then there the opposite algos that will display a very large size to try to give a false indication.
Do not get me wrong, it is very useful but it is not the be all and end all. To get a good feel for it, pick a top stock in an industry you are familiar with and then just watch the action for a week. I mean literally, watch it tick by tick and how Level II moves...look at the Time and Sales, see what actually gets hit and how the MMs move their bids/offers.
THEN pick up a book and it will make more sense...
Do not get me wrong, it is very useful but it is not the be all and end all. To get a good feel for it, pick a top stock in an industry you are familiar with and then just watch the action for a week. I mean literally, watch it tick by tick and how Level II moves...look at the Time and Sales, see what actually gets hit and how the MMs move their bids/offers.
THEN pick up a book and it will make more sense...