Level II Software Investing Tools Will Change The Way You Trade
Using Stock Market Level II Data To Time Your Penny Stock Trade
Level II Software Investing tools use NASDAQ Level 2 Quotes to time entry and exit points for your trades.
How Does Level II Data Help Me Trade?
Basically, Level 1 data tells you the best Bid and Ask price of a given stock, and includes the current price per share, and volume traded. This information is fine for a snapshot of where your stock is currently trading.
But to effectively judge the direction a stock price may be moving, NASDAQ Level 2 Quotes are necessary. Level II software investing tools study the Bid and Ask prices in-depth. That is, using Level 2 data, you are able to see the market makers and their order sizes beyond the Level 1 picture.
By the way, I am not compensated by Bloomfield Investment Club in any way. but, they seem to offer a good Level II package at a fair price.
For example, NITE may be the best inside Ask for a stock with a size of 5,000 and price of .05, while just above it is ARCA with an Ask size of 10,000 and price of .06.
Over on the Bid side, HDSN may be trying to buy 50,000 shares at a price of .045, and beneath that, DOMS may have a Bid in for 50,000 shares at .04.
Level II software investing programs would look at this Bid/Ask structure and determine that Bid support is huge compared to an apparent thin wall on the Ask. Given this, the stock trade software may signal a buy order.
Keep in mind that “size” does not always translate to an exact number of shares. In the penny market, NASDAQ Level 2 Quotes sizes tend to max out the size system. A quoted size of 5,000, may actually represent 500,000, or even 1 million.
Black Box Warning
Like any stock trade system, Level II software investing systems depend on trends and previous stock price behavior based on historical data. As traders, we all know that past performance does not guarantee future results. So, while the software may give you a buy signal, you still need to use your judgment, based on current events and your research, to determine your entry and exit points.
There are numerous places to obtain NASDAQ Level 2 Quotes, but you’ll have to pay for the access to real time data feeds. If you are happy with a 20 minute delay in your data, and want to test drive Level 2 Quotes.
In my opinion, delayed quotes are fine for casual trading. But to effectively use day trading, swing trading, or momentum trading strategies, you need real time quotes.
Where To Find Level II Software Investing Tools
Here are the links to several companies that may be able to help you out. I am not affiliated with any of these, and merely list them as a convenience for you. You could also conduct a search to find more alternatives.
The services these companies offer is above and beyond basic NASDAQ Level 2 Quotes services. Also, important note: if you plan to trade the penny markets, make sure their quote or trade alert service covers the best penny stocks and OTCBB to buy. Many do not.