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In this exclusive article, Clem Chambers – Forbes columnist and author of the Amazon No.1 investing bestseller “101 Ways to Pick Stock Market Winners” – explains how Level 2 order book data can help you trade successfully.
Incisive, honest and essential, Clem Chambers’ 101 Ways to Pick Stock Market Winners is the Amazon-bestselling investing guide for all future market millionaires
Level 2 is the order book information for a stock, also known as the market depth. With Level 2 you can see all the orders in the market to buy and sell shares in a company. It also shows you the number of shares each person wants, what price they want and when they placed their order.
The advent of the electronic Level 2 system heralded a massive change in the market. Market makers now present their quotes through a version of the Level 2 display, so you can quickly and easily see where and at what levels Market Makers are pricing stock. As a result Level 2 has made the process of buying and selling stocks far more transparent and far more liquid.
Level 2 shows you all of the orders to buy or sell stock. By watching these orders, Level 2 gives you a much better impression of market sentiment and behaviour.
For more information, read our exclusive ADVFN guide to Level 2.
ADVFN’s Level 2 offers something different from its competitors, Level 3 Montage, the ability to see orders for that stock on other exchanges and MTFs.
Traditionally, to trade a share you would go to the exchange on which the share was listed and trade it through that exchange. Occasionally, companies would be listed separately on more than one market but that was about as exciting as it got.
Now we have Multilateral Trading Facilities (MTFs), a new breed of quasi exchange. MTFs can trade stocks listed on major exchanges, matching and executing orders away from the shares indigenous exchange.
It’s a bit like deciding to buy a new TV. With only Level 2 access you would be able to go to only one shop and whatever their price was, that would be the price you’d have to pay. With Level 3 Montage you have access to all the shops and can get the best price available, you have a lot more choice.
ADVFN are also able to offer Level 2 on your phone. This is incredibly useful for on-the-go traders who want to have up-to-date real time data available at their fingertips.
For more information, you can click on our exclusive ADVFN guide explaining Level 2.
Register and subscribe to Level 2 here, or ring our support number: 020 7070 0961 for a 4 week free trial, quoting: ADVFN Newspaper Level 2.
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