Things I Wish I Knew: Don't underestimate the importance of spread in trading. A tight spread may indicate a heavily traded stock with limited potential for big moves. Aim for spreads of 3-5 cents or 5-10 cents. Watch the level two and tape closely to gauge trading activity. Look for quick movements, upward trends, and lots of green orders. When others are buying and the stock is moving fast, that's where you want to be. #TradingTips #MarketTrends #MarketAnalysis #SpreadAnalysis

So what exactly do I look for in level two beyond the big, uh, the big orders I would say it's so someone asked me this earlier. Um about the spread? Uh, you know one cent spread is not necessarily a good thing. If you've got a really, really tight spread, then you know that's telling me that you've got a stock that is pretty thickly traded, might have a higher float, may not make as big of a move. So it's a spread of three to five cents or five to ten is totally fine.

That's not a big deal. I can look at the level two to see how stacked up the orders are going down on the bid or up on the ask and I can look at the tape and the tape is what I look at probably the most closely because I want to see. Is this moving quickly? Is it moving up quickly? Are there a lot of orders going through in green? Because that means there's other people stepping up to the plate and buying this thing. and if there's other people buying, it's moving quickly.

That's where I want to be buying to.

By Stock Chat

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5 thoughts on “What i look for in level 2”
  1. Avataaar/Circle Created with python_avatars David Grubbs says:

    What class/recording is this part of? I'd really like to watch it. I'm in Pro Ch 8 currently, but still struggling with L2. Thanks!

  2. Avataaar/Circle Created with python_avatars Lynn Lynn says:

    CCG

  3. Avataaar/Circle Created with python_avatars Peter Thomas says:

    MLGO

  4. Avataaar/Circle Created with python_avatars Lynn Lynn says:

    MLGO

  5. Avataaar/Circle Created with python_avatars Lynn Lynn says:

    BTM

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