Level II can provide enormous insight into a stock's price action. It can tell you what type of stock traders are buying or selling, where the stock is likely to head in the near term and much more. Today I explain what level II is, how it works and how it can help you better understand how to trade a given stock better.
Level II is essentially the order book for Nasdaq stocks. When orders are placed, they are placed through many different market makers and other market participants. Level II will show you a ranked list of the best bid and ask prices from each of these participants, giving you a detailed insight into the price action.
Knowing exactly who has an interest in a stock can be extremely useful, especially if you are day trading.
Disclaimer: MOJO Day Trading is a provider of stock market education. MOJO Day Trading is not a registered as an investment adviser either with the U.S. Securities and Exchange Commission or any ...
Disclaimer: MOJO Day Trading is a provider of stock market education. MOJO Day Trading is not a registered as an investment adviser either with the U.S. Securities and Exchange Commission or any other federal, governmental or regulatory authority. The business services and activities of MOJO Day Trading do not requires any such registrations. You understand and acknowledge that there is a very high degree of risk involved in trading securities. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented are for educational purposes only. Such picks, alerts, set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.
Please note: Hypothetical computer simulated performance results are believed to be accurately presented. However, they are not guaranteed as to accuracy or completeness and are subject to change without any notice. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Since, also, the trades have not actually been executed; the results may have been under or over compensated for the impact, if any, of certain market factors such as liquidity, slippage and commissions. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any portfolio will, or is likely to achieve profits or losses similar to those shown. All investments and trades carry risks.
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