L2 is where my knowledge and experience fall short. take your word for it then. thanks for the info, always good to learn something new
Essentially what we have is L1 where we only see the best ask and bid (the top row) and we canāt see the size.
L2 helps show support and resistance. It shows a list of buyers and sellers stacked up and at what bid and asks they are wanting to pay/receive and at what size. So you can see where the movement is going say if you have lots of buyers wanting to hit the ask or a seller wall preventing the SP from going higher.
Thereās also L3 but thatās MMs for entering quotes, executing orders.
iād genuinely want to dig deeper for this if i didnāt need the rest of my brain for my day job. these kinda statistics related things make me happy
Most retail including myself will never need it, and most will never know or care what actually goes on behind the scenes.
To add to it the L2 can be bluffed and manipulated, itās a bit like chess I guess. And spotting signs like splitting large orders into smaller chunks. Thereās also signals using the size like āhold it here donāt let it go upā, āneed more sharesā etc
The key thing really is Time & Sales basically what are the trades and size thatās getting executed.
You might need to right click open image in new tab to see
thatās my weekend reading then ha!
i will read before i make another comment on being annoyed at horrible execution delays on pie orders
unfortunately its US based, but you can be UK and look a the order book on US stocks. 3 mths free, then its $2 a month I think.