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trader by the name of Mike Campion once described Level
II trading as the closest you'll get to sitting in the
cockpit of an F-14 Tomcat and flying into battle. Your
enemies are professionals who capitalize on your errors
if you read their actions incorrectly. You must focus
on your opponent's movements and accurately assess their
intentions. Once you believe you know what those actions
are, you than make the appropriate decisions to enter
into battle or retreat and stay on the sidelines until
a better opportunity comes along. This in a nutshell is
what trading with a Level II system will do for you whether
you're scalping, day trading or swing trading.
A
Level II system is a quote screen which is constantly
moving and being updated. It shows the various lot sizes
and prices at which a stock is being bid and offered.
It also shows the exchanges and market makers that are
involved. Some screens have a Time and Sales section
also known as the prints, meaning the size, time and
price that the last trade took place. Most online systems
have a Time and Sales or Last Trade screen available.
We would highly recommend utilizing this info with the
Level II quote system. With practice it will allow you
to have that extra edge in being able to tell whether
buyers or sellers are entering, leaving or just giving
you a head fake. As for utilizing the Level II system
along with Topline Research recommendations, keep in
mind that with the exception of PowerTrades and Intraday
Alerts most of the recommendations are swing trades.
Although Level II screens are not necessarily needed
for this type of trade we all would love to enter our
trades at the optimal moment. Using the Level II quote
system will give you (once learned) some added confidence
with your entry and exit points. This will also maximize
your upside potential and limit the downside risk. Also
keep in mind that this works as well with the art of
shorting.
Most
well established online brokerages now offer access
to Level II quotes for frequent traders. While some
offer these for free, others charge a nominal fee for
this access. Whatever the situation, it's well worth
the time and expense to learn to a Level II quotes system.
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