MOJO Day Trading Lesson: Trading with Level 2
All trading platforms Scottrade, eTrade, TD Ameritrade, Interactive Brokers, etc.... have Level 2 Montage. MOJO preferred Level 2 Montage looks like this: See Image Below of IBIO
Trading off the Level 2 is “old school” many traders say that. They say “what are you kidding me”, “the Level 2 is for LOSERS”. Well if Loser is the category for winning on 95% of your trades then I am really good with that label. The Level 2 gives me an in-depth view of the demand and supply on the stock BEFORE it makes the correlating bars on the charts. I am able to see by the size of institutional orders and predict which direction the stock is heading.
Let’s use this example – The stock is IBIO and it’s 10/20/2014 it’s 3:24pm and 30 minutes before the close. You see the high was $2.97 and the low $1.95 and it just came from $2.60 and stops here at $2.30 X $2.33
You say to yourself – look at that BID SIZE – there is 379,100 shares on the bid (represented by EDGX 2.30) and the ASK with 11,000 shares.
Now, if I buy at $2.33 I can sell on the run back up and make a cool $.05 to $.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. That thinking is 90% of all traders. MOST IMPORTANT – IT TOOK ME 3 YEARS TO REALIZE THE BID WIT SIZE IS BEARISH. Oh my that 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 didn’t recognize the signal in the level 2 before the stock fell $.30 cents and over 10%. Once you know how to read Level 2 and trade off the signals your trading probability of winning will go way up. There are many factors that relate to trading off level 2 which includes fake orders and rebate trading. I cover all these topics and give you the skills not only to recognize the signals but profit from them. This is all taught to MOJO Traders in MOJO University – the World’s Best Business Based Stock Trading Course. The next class starts in 2 weeks Tuesday July 5th. Each class has 30 New Students. This class is full so I extended it to 5 more spots so if you have an interest in the course – click here and check out details.
Special Offer - If you join the day trading room from this blog post not only will you get 50% Of the first 30 day trial. I will value add bonus you the MOJO University Level 2 Educational Video. Worth $49 so you basically learn and get the 30 day trial for $0.