All right, so we'll do a quick video lesson here on sort of the nitty-gritty of level Two. So, and this is also going to be on hotkeys, so we'll get a couple things here, try to cover both these topics. So first of all, when we're looking at the level two, you know I know there's some people in chat that don't use level two, but level two is extremely important for me and the way I trade breakouts. Now you know when I'm trading these breakouts.

especially like it was a good one yesterday, it was why why we were watching. Let's see, I'll pull back the chart on this. We were watching this for a breakout over 78 and you can see how we have this ascending. We have this wedge pattern forming right here.

Now it did drop down at the close on Wednesday no on Tuesday and then it popped back up on Wednesday and so right at this key level of 77, 98, 78. That's where I'm watching the level to and I'm watching the number of shares sitting on the ask and I'm watching the orders going through. and I want to see big buyers coming in taking down sighs. One of the things with high-frequency trading is that all these hundred share orders.

These are computer. For the most part, these are computers. English shares. These are algorithmic traders, the institutional traders, the high-frequency traders.

just check. Ll yeah, although that does look good, so throw that one up. now. What? I like to see if I'm getting ready to buy something is I want to see some big volume coming in more than just hundred share blocks I Want to see you know, thousand shares, Two thousand shares I Want to see that there's retail traders like like me coming in.

Taking downsize to move this now Pandora This is the stock we're looking at here. This is a you know, this is manipulated and traded a lot by the big guys so it's not quite as quite as easy to trade because it will chop around a lot. So let's take a look at Ello here. So this one.

we've got this pretty big extension bar on the 15-minute chart 5-minute also popping up pretty quickly. We've got a top just under 65 so this is one that I would look to potentially get long above 65 and I would watch it basically when it gets up to that 65 level I would look to see if the volume is going to start coming in if we're going to start seeing a lot of buyers. So in terms of in terms of preparing my order, what I do is I use hot keys so I'll press my hot keys are I press shift and then one through ten is a thousand to ten thousand shares. So if I want to take a starter, you can see 6450.

That's my order that's above the ask. it's a limit order above the ask and I can move this I have it automatically set to five cents above the ask. so I can move it up with my right and left keys. If I press shift, it'll move it up by ten cent blocks and then that way I can start to find.

okay, I'm willing to pay 6505. Let's just say for example: so I'll have that order live or I'll have it ready I don't I don't send it until I start to see the volume coming in right at that level. Now if I use my up and down keys I can switch the routing of my order. So if I'm looking at something and I'm afraid I might not get filled I'm going to choose Nasdaq or ARCA because those are direct routing.

If I do something like LS PT that's going to be that's going to route through through Light Speeds internal routing program. it's going to be a little bit slower. It's cheaper, but it's a little bit slower. So when I'm worried about not getting filled, I'm going to go and try send this on ARCA So these are all set on hotkeys so I can quickly adjust now.

I also have it set so I can adjust my position size either by thousand share blocks or by hundred share blocks. So I have all of this laid out on my keyboard so it's very fluid and I can move very quickly. So as soon as I start to see the buying coming in, I can take a starter or if it looks like it's going to go, I might take full-size So let's watch Ello here because we've got this flat top happening right under 65. So it was so something like this in terms of managing my risk I want to keep my risk within my parameter so for me it's a $200 max risk.

So if I'm going to risk 200 bucks, most likely watching the price action here, I'm going to have to. Probably if I try to get in at 65, my stop is probably going to be about 80. so 20 cents. so I could take I could take a starter of 500 shares and then I could double up if it starts to go.

or if I want to be aggressive I could take it I could take a thousand shares and if it starts to rip right away, double up to two thousand and then I have to stop out very quickly if it doesn't break. So again, I'm going to have my order ready just slightly above the ask. so I don't won't worry about getting a partial fill. it does rip.

I'll get my full order and then I can fire that order and immediately send a second order. So let's see how this one develops. This is: this is a one-minute flag one-minute flag pattern. We don't have the 15 minute or the 5 minute lined up, but we do have a one minute flag pattern so this is a decent one to watch.

I don't use all or nothing I I will accept partial fills I have nope, you know I want to get as much as I can and sometimes you know you'll see your order getting filled. you know it's 500, 600, 700, 800 and then pauses for a second and then all of a sudden you get the rest. If you're doing all or nothing, it slows down the order. so I don't do all or nothing.

and then if I want to bail out. My my hotkey for bail out is Control Z It's like the old the old undo key like when you just made a mistake control Z So that's my bail out. Now this is saying a hundred shares and you can see it's giving it a 10 cents below the bid. So it's going to be a marketable order that will fill as low as 10 cents below the bid.

and if the bid drops then I might not get a full fill on my order and I might have to wait a second. And the reason it says 100 shares here is because that's just the default because what it's supposed to do is take my full position and sell it regardless of what my position size is. Whether it's one thousand, ten thousand hundred thousand, he'll take my full position and sell it. Okay, so this is coming in a little bit.

So I have a my sort of bailout button. That's control Z Control X is to bailout of half my position so that's sometimes. If I'm getting a little bit you know, like it doesn't quite feel right I maybe have a little too much size I want to give it a chance to form I'm going to I'm going to bail out a half and I'm just going to do a market order because I'm just a little nervous peak. Ours has a nice five minutes set up here.

So then on the flip side, when I'm in the profit when something is moved up I have a couple ways: I can sell. On the one hand, I can go ahead and use my Control Z or Control X to just bail out of half or full. but if I want to be more aggressive, what I do is I press alt for and alt and my hotkeys means putting shares on the ask. that's going to be more aggressive.

so I'll say alt and the shares are up on the ask now. I don't have a full I don't have a position here. Control Z and Manuel X are marketable limit orders. I'm answering a question for Mack here he's in the chat room.

Yeah, so those are those are marketable limit orders. They're not market orders. They're ten cents below the bid. So if this thing drops 50 cents, I won't get filled I'll be sitting still 10 cents below.

Now for some reason this these are coordinating I only am on it to do the video lesson. The pot key might be a little bit messed up, but what it's supposed to do is it's supposed to throw half quarter or full up on the ask to start getting filled some of my shares. So I'll throw my shares up on the ask and one of the things you want to do is try to sell through ARCA or Nasdaq because you'll get rebates just the way you have to pay when you route your orders through them. When you're buying shares at the market they'll give you money back when you sell.

Now if you sell it market they don't give you money that you have to pay them again. but if you anything that's not a marketable order they will give you money form. So if I put my shares up on the ask and they have to sit there for a few minutes before they get filled or even a few seconds I'll get rebates for that and it's a small rebate. It's a half penny per share.

you know? So ten thousand shares would be an extra 50 bucks, you know? So hey, that's not bad. If you're adding liquidity, you know it's something like that. It varies broker to broker but adding liquidity on the one hand helps you. You know make up a little bit on the Commission's that you're spending and to selling on the ask helps you get the best price.

So I have both these hotkeys ready to go I can if I'm a little nervous I could just bail out on the mark basically on the bid which is a marketable limit order or I can have some up sitting up on the ask and I can be doing both. Now this is the size of my level 2. Obviously some people want to have level 2 stretched out so they can see. you know, see more of it I not you know I keep mine pretty small, especially when I'm doing breakout trading.

The times where I may be more curious about what's further down would be a stock that trades a little more a little thin like Zillow or maybe GW pH because I might want to see well you know, where do we have some size holding this up or holding it down? But beyond that for for most of the trades that we do, we try to trade pretty liquid stocks stocks that are trading on heavy volume so those stocks were not going to be super concerned about about looking down the whole level to. So let's see. So here on this one you see an 8,500 share block went through, a 2500 share block went through. so those are those are you know, bigger size, five hundred, five thousand, Whatever.

Fifty four hundred shares that went through. So you see on this one a mix of retail and institutional trading. the high frequency trading. Let's look at Petsmart This one's trading on pretty heavy volume so I'll do you know I'll do more video lessons when we actually have a setup that we can trade with it.

we can watch trading and you know, see how it plays out and I can talk talk through it. But for this one I just really wanted to go over kind of the you know the nitty gritty of setting up you know which hotkeys I use how I execute my orders and how I use level two so you know for level two I always want to see if I'm buying I want to see other buyers and I want to see the shares going through on the ask I want to see them taking down shares on the ask you know if I'm going to short I want to see people punching the bid and dropping it down. So I watch these sales going through. and when I see something like this, look at how many people are sitting at 10.

So there was a lot. There were a lot of people sitting up there 10 and that holds it down. So if you see the ass getting really, really heavy at a certain level, that can make you cautious on the one hand. On the one hand, you're cautious because you're thinking there's a lot of people holding this down.

On the other hand, if someone comes in with big volume and starts taking down size once that once those shares come out, you can get a big pop. And so we always look for that kind of thing, We look for something to be sitting heavy like to. GMCR GMCR This has been a really good trader in the past. Keep it on one second.

flipping back over to Ello Ello If this was trading up at 65 today, we're at 64 99 and you see 20,000 shares sitting at 65. and then you start seeing someone taking down sighs. Now you've got nine thousand, eight thousand, seven thousand, six five, four three two. As it starts to come down, that's when I start taking sighs I start joining the buyers now right before it breaks.

If someone comes up and throws another ten thousand shares up there, I bail I get out. So okay, someone's holding it down, but if that doesn't happen, then when it goes down to zero, you're going to get that pop and it's going to pop over the number and that's where we can get some really quick, quick, winning trades. We did it on GW pH It popped 80 cents GMCR This has been known to give some really good pops as well. Okay, so let's watch.

GMCR So GMCR got a lot on the daily chart so I'm going to watch this at 1:27 Okay, so what I would do is I'm not going to take an order on this because I'm want do the video lesson but I would watch this for a long over 127 because this is a Momentum stock and we've got high volume. I Know there's been some news circulating on GMCR in the past few weeks Coca-cola takeover stuff like that so this is a chance. Also right to talk about. how do you combat stocks that have a big spread and this is really just an issue of risk management.

If you've got 20 30 cent spread, you have to adjust your size accordingly. You have to think okay, this thing could drop 30 cents or more so you need to take a little bit less size. I'm just going to adjust this really quickly. Save quit All right? Sorry.

Okay, so you see what we did. We got this high of 87 so we came up. We start getting close to the figure capping it and coming back in. All right.

So I'm just watching this here. Got a little bit of sideways price action here. Volume is coming down a little bit which is okay during the flag consolidation the volumes later, but you want to see it come back in on the brake. and GMCR only has 350 thousand shares traded so it's you know, a little little on the light side.

Okay, so the high here. We've got a high at 50. We've got two one-minute candle highs at 50, so this is a spot where you could potentially if you want to be really aggressive, get long at 51. Okay, so let's say we got long here.

Okay, so what I would want to do is I would want to double on the break of highs which is 87 but I would stop out I would stop out at 40. I would take a 10 cent loss if it comes back down and breaks 50 cents. So once you get above E7, really what I want to see is it get above 127. So what I would probably do is hold off on doubling until it breaks 127 and then double.

And yeah, it's going to throw off my average but above? Okay, so right here I'm watching the level 2. We've got 10 looks like a thousand shares sitting at 99. a thousand at 0-0 So I've got an order ready, got my order ready to fire? I'm gonna I would set it at O5. just a little bit above the ask now since bye-bye-bye bye-bye-bye Okay so so one of the things that we'll notice sometimes is that tap up at the figure and then we pull in.

come up and tap it. We pull in, tap and pull in. bye-bye-bye Now because I was being aggressive and getting long down here on the flag break the first candle to make a new high on this consolidation on a momentum play. I would have a good average if I didn't add here and I'm waiting just to break that 127, then I'm not in yet I'm just waiting I've got an order ready at 120 705 to either double or add my first first size.

Okay so I take it there. You have to be very very quick. Now when I take something on a 127 on a whole dollar break, it needs to go immediately. So I'm already a little nervous because for a moment there it dipped down and it was 126.

It was straddling the figure so some bit some of the the bid was below and the ask was above. So I get a little hesitant there and then this is where I throw cancel that. This is where I throw half my size up at you know, 26 or 27 and start trying to scale out. my average is 75 from the double bye-bye-bye I would adjust my stop now to 94 so I could I get adjusted to 99 but just because we're not quite as far above I would probably have it at 94 just so if it did dip down just for a second and pop back up I wouldn't get stopped out.

So I'm watching this here I would use no I wouldn't use a live stop. it would be a mental stop. Be a mental stop. I'm ready.

Basically my order would be ready here and I would I'd have my order ready here probably at 85. Bye-bye-bye Okay now I'm now I'm filled a little bit on the ask. So now I've got some profit, right? So I'm going to keep watching it. I've still got half size.

getting over 12750 is a key level so sometimes what I'll do is I'll throw some shares at 127, 49 or 48 or 47 just under that key level. So I would do that to be to be more aggressive. I would put I take a little size so say I had a thousand shares. I would put I'm down to 500 now because I already sold half.

Maybe I'll sell a hundred or two hundred at 48:47 try to get filled because this might tap this level and then pull in. Alright, so I want to get as much profit as I can and this is one of the cases where I might say you know what 40 42 is the bid I'm going to mark it because look at how quickly that dropped. so I maybe there's some times that's what I'll do if I'm not getting filled on the ask if I hadn't gotten filled, but the bid is up there tight. that's when sometimes I'll say you know what I'm just going to use my you know my Ctrl X key and just take out half of my size.

So my stop on this would be 127 126, 94. Still keep it down there I want to keep it I want to keep at least some size in this if we continue to run. Now the low of the last five minute candle is 126 64 which is that's below my average. So I'm not going to take a loss on this.

This is this is too extended for me to use that as my stop. So I just have to be more aggressive in a perfect world. Yeah I Want to use the last five-minute candle? but I can't do that here This do. We have a couple candles coming down? That's okay.

We want to look for the first one to make a new high the same as we did here. we have a couple coming down first one to make a new high. we move up and you can see we're riding along moving averages. So I don't use moving averages that much.

But if I start to see things like this just breaking down quickly and breaking through them, that's the sign to you know. step step aside. Okay, so we want to see this get above 30. Okay, so 33.

So now it's breaking the flag. Back to the upside: the power should come in. we should get above 50. Ow Gifted the armchairs moving on volume Study.

All right. I'll look at that in a second. All right. So now we've got the flag.

Now we're moving back up. So with this type of trade, you know, down if I'm at this point from my original thousand shares, I'm down to 250 because I've scaled out scaled out a little in the twin like right right around 26. 27 30 scaled out a little more at 49 Now I'm down to 250 shares I can start adjusting my stop and just moving my stop up. So now I'm going to set my stop right here at the low of the last flag.

All right, I'm just going to keep moving it up and maybe I'll take out 50 shares up here and I'll take out a little bit more size and I'll keep paying myself about Bed Bath & Beyond it's a 500. The first thing I look at when I look at news is the amount of volume. 500 thousand shares. That's big volume.

Alright, so we'll go back on GMCR in a few minutes. My stop on that is 127 12. Yeah, 127 12. That's the stop.

And let's say to be conservative: I'm going to try to take out another 125 shares up here somewhere above 50. So whether it's 55 or 67 or 70, I'd be taking out a little bit more size up here. So now my stop is still 127 12 for 125 shares and I'll make a live stop on that because now I'm down to like an eighth of my original position. So I can I could throw a live stop on there and it's not going to I'm not going to worry about slippage.

It's not like a thousand shares or something big. Okay, so let's look at the BBY Bed Bath & Beyond BBB Why? Okay, so we've got some some news on this: I Heard on my streaming news radio high was 59 85 so the first thing I look on these is getting long above the highs. It looks like there's a low on the daily chart of 50 989 which is another low 60 10. So this I'd be ready to take half size 86.

This is a news play. It's riskier. I have a 200 dollar stop that's 40 cents on 500 shares. So if this does pull back quickly I can get out now.

Could I take a thousand and stop take a 20 cent stop I could do that. but I want to give myself room to double up or possibly average down if I need to. Alright, so the other thing that I look at when I'm looking at news: the initial spike 300,000 shares. the volume is drying up here.

volume is really tapering off quickly, so when we look at the 5-minute chart, we're gonna have this massive volume spike. and then the next candle right now is looking very low. So that makes me a little nervous that maybe this isn't going to have the power in the momentum to get back up to the highs and to break the highs I put my order at 88 I'll put it at 89. Okay I'm watching this eighty-nine If I get filled at 89, my stop is going to be 69.

I'll use a 20 cent stop I'll risk 100 bucks got. So we've got a lot of volume happening here. See and then you get that that big bearish candle. it just doesn't quite have enough momentum.

It doesn't look like to get above that. Alright, so let's go check. GMCR Okay, so GMCR we're still holding this our stops down here now. We've had a little bit of flagging here, so now I'm going to adjust my stop.

The low of this flag was 127 60 I would adjust my stop now to 49 if it breaks below 50. The mental support of 127 50 I Want to have my stop there and now I'm up almost $1 per share on my remaining hundred 25 shares. Okay, so now we could look at this ass 2700 shares. We want to see that we want to see volume, come in and take it down.

When we start seeing selling up here, that makes me a little nervous. I Want to see a buyer come in and take it down. take some size. so depending on how far up I am sometimes I'll throw some shares right? it? You know, 95? you know, 97 98.

So I can. So I can be one of the ones that's selling close to the highs in case it does pull back in. and that was the high of day. and if it does end up breaking 28 in Richmond then you know that's awesome and I'll get more profit on my remaining position.

but I was at least able to lock up some profit up there near the highs, but still. My trailing stop is 127 49, 125 shares left. Look back over to BBB Why? that's coming in too hard so that's that's no good. Nothing there, and yeah, you could have maybe shorted it, but but just focusing on trading with the direction of the market.

at least for this video lesson here. the stop at 127 49 is very similar to setting a stop at 99 when you're long. Oh man, it's just below mental support of the half-dollar So we get mental support at whole dollars. and half dollars.

Whole dollars are stronger than half dollars. but we still get some mental support at half dollars. So if we broke below 50 next next mental support is all the way down 27. So that's why I would stop at 49.

That's a mental support issue. It's not based on the low of a candle. if I was going to use the low of the candle. the previous low of this candle is 127 11, which was the bottom of the flag back here.

But again, I'd be giving back almost $1 off the highs. So I want to be more aggressive now I only have 125 shares. Okay, and now I'm out. Okay, so now I'm out of the trade I booked my profit and I can keep this on, watch or wait for the next trade.

So my stops. oops. So I have control control. s is a stop and you know I'll just tab down and place it wherever I want and that is a marketable order.

It's a market order. Okay so now if I had set my low at if I kept it at the low of 12 back here we can see what would happen. I think I saw it on the level 2 I definitely saw 12 but doesn't look like any orders went off down there. All right.

So so hopefully this helps you understand a little bit more of what I'm looking at when I'm watching the level two. it is complicated. It is a little confusing. it takes time to watch it, but we want to focus a course on the you know the most important things: risk management, choosing the right stocks and choosing the right patterns.

So for risk management I wanted to make sure I wasn't risking more than my max amount for choosing the right stocks. Green Mountain Coffee This is a momentum stock on high volume. We've got some news happening here: Choosing the right patterns. I'm looking at small flattop breakouts on the one-minute and the only reason I'm using the one-minute chart on this is because this is trading on heavy volume due to the news natural gas storage.

All right. Turn that down all right. So if you do have any questions, feel free to email me Day Trade Warrior gmail.com We'll get this video lesson uploaded here in just a few minutes.