Thanks Pete! "Light Bulb" moment for me in understanding how order flow correlates into the candlestick formation! Starting to see the charts with much more clarity thanks to you!!! Best Wishes...
Green Prints with price moving up = Active buying Green Prints with no price movement = Distribution Red Prints with price moving down = active selling Red Prints with no price movement = Accumulation. Very simple concept.
distribution and accumulation can not be subjected to the candle's color. it is mainly a range of candles with sideways movements. may contain different color candles.
How are you seeing who exactly is doing the buying and selling (like when you said you “see Goldman Saks buying…and then GSCO”)? I never see personal information on who the seller/buyer is on my level 2 data.
I've heard a lot of people say that the level 2 can be deceiving because there are a lot of fake orders that get put in that are meant to confuse traders. The idea that you'll see big blocks of trades and get the sense that the smart money is stepping in but it's not a real offer to buy or sell.
Hey Akiva! 've seen fake bids and offers, that's called "spoofing" happens a lot less than it used to - block trades are real though - they are actual transactions
If you have a foot print chart (showing a trail/heat map of lvl 2 history) then you can see how long that liquidity has been there. Longer term (several minutes) flow tends to actually trade VS algos popping bids in for several seconds to pressure price and disappearing as the price approaches the order.
another question if I may. we are always talking about inflow and outflow. if every purchase of a share is accompanied by every sale of a share. then what does outflow and inflow really mean?
Thanks, Pete -- very informative. I still am not sure what the entry point would be. I normally enter in a buy zone, but if a stock is passed the buy zone, where would the entry be?
Past bullish performances of a stock don't guarantee a bull run will continue. Just by looking at where smart money has gone, how do you know if its the right time to enter?
This is the opposite for me- I use the Level 2 and Time & Sales for execution and see order flow, but the chart gives good context for potential areas of buy/sell pressure through daily/premarket support and resistance and gap fills etc. These levels you wouldn't be able to just see on the Level 2 if it's far back
Wow so many wannabe traders don’t even know how to use or even know what level 2 is and time and sales smh actually level 2 is outdated level 4 is way better
A lot of videos I've seen though are just labeled as Day Trading, but specifically for stock trading, this is more relevant. I don't pay attention or know anything about Futures, Options or Crypto but I don't think they have Level 2 or a Time & Sales no?
