How to Read Level 2 for Daytraders
I hear it every day, “Level 2 is Old School, and Level 2 is for doesn't work.”
Well, I have said it before and I will say it again, if winning on 95% of your trades over the course of 3+ years is being a loser, then sign me up, because that sounds pretty sweet to me!
The Level 2 is not only present on all trading platforms, it is the basis of the MOJO Day Trading Style. A style based on old school fundamentals. Reading charts and studying technical - garbage I tell you.
The Level 2 allows me to see in-depth where the supply and demand is for a particular stock. With that information and years of trading knowledge all recorded in my journal, I am able to score at super high WIN RATES!
Reading Level 2 is an intuitive reaction, I don’t need to do any cognitive thinking, my brain automatically processes the information and knows the answer. This is accomplished by years of practice and training - just like a pro athlete or pro whatever!! Guitar Player, Doctor, Golfer, Pilot, etc.... This is the type of speed that makes MOJO ProTraders the best of the best. It has taken me years to build up this advanced capacity to read Level 2, but I will teach it to anyone who wants to learn and make this trading game easier.
The demand and supply on a particular stock creates the chart - so knowing BEFORE what the setup is really matters. Knowing which direction its headed is crucial - you can spot moves BEFORE they happen - yeah boy!!
So, while people wait for the bars to hit the charts, I am already passing them by - that is the MOJO liquidity I look for - buy low sell high ya know!!
That’s why MOJO is always one step ahead of the game! I am able to see the size of institutional orders, which indicate which direction the stock is heading and react in the blink of an eye!
Here is an example for you:
Let’s take a look at this $IBO Level 2 from 10/20/2014. The time was 3:24 pm, about 30 minutes before the close. The high was $2.97 and the low $1.95. It was just up at $2.60, but has made a stop at $2.33 X $2.33.
Now, most trades would say to themselves: “Look at that BID SIZE- there are 379,100 shares on the bid (which is represented by EDGX $2.30) and the ASK with 11,000 shares. Now, if I buy $2.33 I can sell on the run up and make $.05 - $.10 and if I am wrong I can just sell at $2.30 because there is so much size there I would only lose a penny or two.”
This is the thinking of roughly 90% of all traders.
What is most important to realize here is:
THE BID WITH SIZE IS BEARISH
If the stock got crushed and you hesitated when the selling started at $2.30 and it closed at $1.97, you got crushed. Why? Because you did not recognize the signal in Level 2 before the stock fell $.30 cents and over 10%.
Once you know how to read Level 2 and trade off the signals, the probability of your trades being winners goes up dramatically. That is why MOJO Day Trading works!! The stock courses and online day trading learning is second to none!!
There are many additional factors that go into reading Level 2, such as fake orders, no intention to buy bids, and rebate trading. All of these topics, and more, are covered in depth in MOJO University Stock Courses.
So, ask yourself: Are you trading with 95% accuracy?
If not, take the world famous Mojo University Online Day Trading Course for FREE just for becoming a member of the chat room.
Take a watch of this educational video and let me know if you want more...