Level II usefulness

[candletrader]

Its still OK for less liquid issues...

 

[c_verm]

Quote from candletrader:

Its still OK for less liquid issues...

Sounds like your candle charts are burning at both ends of the wick!!

 

[smoss]

Quote from c_verm:

Level II is very important to me. I Guess if your not daytrading you dont need it but if you are its prity important to get the depth of each price level & most importanly to spot MM TRAPS!!

What are the keys to spotting MM traps?

 

[newestmember]

Once in a blue moon you may spot something on Level II just before a stock takes off, but the vast majority of the time the size and action on Level II mean nothing. You can't stare at Level II and 'follow the size' anymore like you could back in 1998.

Level II is only useful in that it gives you some idea of how large/small your position should be (how easy/difficult it will be for you to unwind the position).

 

[ChrisRT]

Quote from roberk:

Hmmm. Sometimes I want to buy 3000 or 4000 shares But I don't aways put them out in one bundle for all to see - nor do I leave them at one price. I move them about. And that is with this piddling amount.

If I was looking to buy/sell the quantities you are talking about I would be irked if the SEC told me I had to place it all once so that every buyer in the market knew exactly what I wanted.

I have to agree with roberk here. MMs are really trying to trade against other MMs, not necessarily worrying about 1K orders. You take away their (or our) ability to mask intentions, they are not fulfilling their client's needs as easily, which is a big part of their commission structure. I am not trying to defend MMs, but anyone that forces me or them to display all that I have in order to create 100% transparency is taking the ability away for sound capital and/or risk management tools by both them and us. Maybe there is some kind of common ground (which I think they found by saying if you have reserve, you show 1000), but to say there needs to be complete intentions known in terms of shares available..yikes...seems dangerous.

Chris

 

[ChrisRT]

Quote from newestmember:

Once in a blue moon you may spot something on Level II just before a stock takes off, but the vast majority of the time the size and action on Level II mean nothing. You can't stare at Level II and 'follow the size' anymore like you could back in 1998.

Level II is only useful in that it gives you some idea of how large/small your position should be (how easy/difficult it will be for you to unwind the position).

This is what I agree with and what I tried to say earlier.

And wasting my time looking for the once in a blue moon is not what I want from trading.

Chris

 

[ChaosNSX]

If you want to read level 2 trade NYSE... Much more readable...

 

[volente_00]

Level II is most useful when you are watching it and time and sales at the same time. This helps eliminate the games being played for the tape always tells the truth.

 

[GSCO]

It's real interesting to see how different traders use different strategies. My entire Strategy is based on reading Level two. My only comment to people who don't see any usefulness in reading level two is that "you're not reading it properly."

Not that you can't make money without it, just that there is a right way and a wrong way to watch level two.

 

[GSCO]

Quote from newestmember:

Once in a blue moon you may spot something on Level II just before a stock takes off, but the vast majority of the time the size and action on Level II mean nothing. You can't stare at Level II and 'follow the size' anymore like you could back in 1998.

Level II is only useful in that it gives you some idea of how large/small your position should be (how easy/difficult it will be for you to unwind the position).

I love hearing stuff like this.