Hello YouTube garage day-trader, coming at you today with another question, answer video coming straight from a question off of YouTube when we talk about level 2 and time and sales. Alright, so forgive me if I say this anywhere close to Wrong by mucus. Dhoni asks about level and how you use level 2.
Well, let’s try and look at a live example here of exactly why I level 2 is important and how you should so.
Let’S go ahead and blow up this level to a little bit for you guys, so that you can see it a little bit weather on the screen here. Okay, so you got your level 2, so, basically, all of that your level 2.
This isn’t Scott your Market order in the top, so you’re going to put in there how you, if you want to do a limit order on Market a stop order. You know your range for one you wanted to do and then you’ll have your buttons for buysellshort.
All that stuff said Parts easy. The important part is come here, and this is the part that you need need need to learn how to read and learn how to read effectively.
Okay, it’s on the left side, you’re going to have the bitters where the price is currently at on the bed now. The way I have it set up is the yellow is where is currently at and then the other colors are where it is above and below and a given price.
So if we’re looking at twx, how much is Time Warner? Currently, the bid is at 861 and the ask is at 862 now. What I need to see here is that the ask see the size here that ask is a lot higher than the bed, which was 1861.
What’S the big got taken out by the time and sales here you can see that is printing a lot of red as opposed to Green.
The price went down now the app cuz I need 60 visit 857 and the ass is coming down again. So you can reasonably assume here that this is probably continue down for at least a little bit here, we’ll see you can see the the buyers getting taken out there again now it’s down to 8:50 on the bit 857 on the ask okay.
So here’s what is important about time and sales and little too when you’re treated you need to learn, not to watch the chart. Once you figure out your do not look at the church anymore, once you figure out where you’re going to get in and once you figure out where your stop loss is okay. As soon as I figure out, where I’m going to go into say, I was going to shore twx right here, as it came down back down under 89 about an hour ago, so it will go okay.
My stop loss would have been Right Above the Tie there. At 8920, so soon as I click the 89, I will completely stop watching the charts all together and I would only be focusing on the level 2 and the timing. Okay.
So what you going to want to watch for is, if you’re in a short you’re, going to want to see that the fire buyers keep getting taken out as you go down, and that the sellers keep stacking up in good numbers.
As that price comes down as well, okay, we use this in conjunction with your time and sales.
So here at 8:48, you can see there’s a lot of buyers sitting there. So you want to see on the time and sales here that you’re going to want to see that red printing on the 848 before you would be interested in that right now you can 850 sprinting. So it’s probably going to go up here in a second now.
One of the questions you guys ask me is: how do you know when there’s a liar a lot of buyers or a lot of sellers stacking up when say the bid says that they’re one just one buyer there at 8:45, for example, say it said there was One buyer there at 8:45 there’s a whole bunch of sellers at 8:46 and for some reason, just wasn’t cracking and you’re looking over here at the time and sales and UC 45 putting over and over getting red.
Well, that’s a good sign that there is a hidden buyer there and you need to be careful and that’s going to happen because don’t know how big that Haydn, buyer really is okay. So if you see that happen, then you really need to attention to what happens immediately after that, because a lot of times it’ll go back up again before comes back down to that point and depending on, if it tution how big and how many shares that they’re Trying to get rid of it that price you might see it bounced back up a backup off. Okay, the same clothes for the reverse, if you see especially around whole numbers and half whole numbers so say it came back up here, 289 range.
Okay, and they said there was one seller at 89 and you’re trying to get it as a breakthrough.
That 89 range.
So you’re waiting for it to break and you see one pill or 89 and then you just keep seeing 89 praying and praying and praying and praying well.
That means really more than once out of there at 89 and it’s a hidden Cellar.
So you don’t know what the size of that hidden seller is going to be.
So that is why you always have to pay attention when you’re in a trade no longer to the Chart. You have to know in your mind, wear price Target is where your stop is, and you watch only the level 2 and the time and sales when you guys see me in a trade when I’m staring down at the screen after I’ve entered. These are the only two things that I’m watching: I’m not I’m not watching my charts and, most importantly, not watching my p & l.
If you watch your p & l, you will not make the correct decision on when you should get it getting out of stock, because you just going to be watching your money going up and down.
And that brings in all the emotions of the day trade, which is not what you you want to be focused in on the technical side of it and take it based on the level 2 and the time and sales. So if you guys are trading or if you’re practicing practice, you know if you need to getting into a trade and then maybe minimize your piano, minimize your chart and only then trade it based on watching your time and sales. That is one of the best piece of advice I can give you, and I just want to think that has helped me the most in my trading.
So hopefully, this was a little bit of a explanation to you, guys just on house used time in sales and level 2.
I can’t stress enough how important it is for this to become a skill that you, When Your Arsenal, when you’re trading, so if you guys have any more questions on it or any comments about everything I just said. Let me know down in the comic hello and maybe we’ll do it.
Another question answer video here soon, so thank you guys very much garage day trader signing out.
The Importance of Level 2 and Time & Sales in Day Trading
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**The trades seen in these videos are in no way intended to be used as advice or guidance for your own trading. These videos are intended for an educational and entertainment purpose only. Day trading and investing in the stock market in general is high risk. Please do not take any comments as direction in trading your own account.**