Newbie question about Level 2

E

erik_s

So I have been trading Forex for about one year, but recently I have become interested to start day trading stocks, and learning to read Level 2. I just wonder, if this orderbook is enough for trading the level 2: https://www.avanza.se/avanzabank/kundservice/kundhandboken/orderlaggning/bild2f.jpg The orderbook is up in the right corner (under the text "ORDERDJUP"), and consists of only 5 lines. In professional trading softwares it looks like this http://colossalprofits.com/images/photos/level2screen.jpg here it is 20 lines, and you can also see the ID of the Marketmaker.

The first link i showed I get for free from my broker, if I want an orderbook looking like the second link it´s more expensive here. So I just want to know if an orderbook looking like the one in the second link is required for daytrading with level 2?
 
You can get educated for free online. There are tons of resources. Good decision on moving to real trading. Forex is a gambler's paradise.
 
erik_s said:
So I have been trading Forex for about one year, but recently I have become interested to start day trading stocks, and learning to read Level 2. I just wonder, if this orderbook is enough for trading the level 2: https://www.avanza.se/avanzabank/kundservice/kundhandboken/orderlaggning/bild2f.jpg The orderbook is up in the right corner (under the text "ORDERDJUP"), and consists of only 5 lines. In professional trading softwares it looks like this http://colossalprofits.com/images/photos/level2screen.jpg here it is 20 lines, and you can also see the ID of the Marketmaker.

The first link i showed I get for free from my broker, if I want an orderbook looking like the second link it´s more expensive here. So I just want to know if an orderbook looking like the one in the second link is required for daytrading with level 2?
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The Order Depth is better than nothing. The full L2 with Time and Sales is more information and may or may not be more helpful to you.

Unless you've studied and have a specific need for the additional information, you could start with just the Order Depth (free). You'll know when you need more. Imo.
 
erik_s,

both books are pretty much useless if you ask me.
Your first priority should be an accurate time&sales that uses the SIP feed and doesn't consolidate prints.
You need to see what prices trade and how much volume there is on every price.
Your free stuff is delayed and probably doesn't show every tick. Tradestation is slow as well.

In the beginning I would recommend DASTrader in connection with an IB account. DAS has it's own datafeed so you don't need to rely on IB's snapshot data. Later on you would want to switch to something professional like Sterling or Lightspeed.

If you are trying to read tape, you need accurate information. Otherwise it's just a waste of time.
 
MrMuppet said:
erik_s,

both books are pretty much useless if you ask me.
Your first priority should be an accurate time&sales that uses the SIP feed and doesn't consolidate prints.
You need to see what prices trade and how much volume there is on every price.
Your free stuff is delayed and probably doesn't show every tick. Tradestation is slow as well.

In the beginning I would recommend DASTrader in connection with an IB account. DAS has it's own datafeed so you don't need to rely on IB's snapshot data. Later on you would want to switch to something professional like Sterling or Lightspeed.

If you are trying to read tape, you need accurate information. Otherwise it's just a waste of time.
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Thanks for the answer. Here in Sweden there is a trading-software all day traders use through their broker, but it costs about 100$ per month. So I wonder if it might be any cheaper way to get complete Level 2 and T&S data. Is this a price you could expect to have to pay for that data in the US also?
 
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Guys, I really don't want to argue...perhaps you are right and your brokers really give you a non aggregated realtime timestamp by timestamp datafeed that usually costs 300$+ per month for free.

Most likely though they are feeding their inhouse software the SIP feed, which is filtered so you cannot se e.g. subpenny trades and aggregate 7 trades à 100 shares into a 700 lot print just to lower their infrastructure effort.

I'm not talking about realtime vs. 15 min delayed. I'm talking about the fact that the feed that you asume to be realtime is probably just bits and pieces of what really happens out there...

If you are ok with that, fine, but if I were you, I'd put 100$ per month on the table and get the real deal.
 
Learn to trade from DOM & TS
And you'll learn to trade what's happening.
The many who learn from charts ... Trade what has been ...
 
I applied for the US broker Ameritrade, they have a platform called Thinkorswim. Is this good enough for reading Level 2 and T&S?
 
erik_s said:
I applied for the US broker Ameritrade, they have a platform called Thinkorswim. Is this good enough for reading Level 2 and T&S?
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In essence you were not looking for advice, you wanted to be told you are right!
 
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