Description

My basic trading philosophy can be summed up by one simple quote:

"Trade the ticker, not the company" - Nate Michaud


Thursday, February 13, 2014

Level 2 - The Very Basics

I get quite a few questions about reading level 2 for OTC stocks. Below I'm going to post some old videos I made about the very basics of reading level 2 that will, hopefully, clear up some confusion for everyone. There are a few points that I may not have sufficiently covered in the videos:

1. Level 2 is most useful to me in times of volatility (spikes or panics)
2. Level 2 is more useful to me for OTC stocks than for listed stocks
3. When I trade during volatility (for OTC stocks) I base my decisions more off of level 2 than the chart
4. During consolidation, key points on the chart matter more to me than random level 2 movement






It's possible, if not likely, that I'm unclear at certain points in some of these videos.  Feel free to email me if you need anything clarified. In the future, I will post additional level 2 videos and get a bit more in depth. Until then, review these and memorize the basics, because the basics are key to understanding the next round of concepts!
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52 comments:

  1. Q BFebruary 14, 2014 at 7:27 PM

    This comment has been removed by the author.

    ReplyDelete
    Replies
    1. Tim GrittaniFebruary 16, 2014 at 10:09 AM

      That post is coming soon! I just needed to get videos out with the very basics first, because level 2 in action and my commentary will make no sense if I don't establish these concepts!

      Delete
    2. UnknownApril 14, 2017 at 4:13 PM

      Hi Tim thanks for this i bought Trading the Tickers dvd. If want the stock to go up i look at the BID side and if i want to short the stock I look at the ASK side? I so confuse with this level 2 because it moves so fast. Thank you Time

      Delete
  2. UnknownFebruary 14, 2014 at 9:35 PM

    Thank you for posting the basics! I had been meaning to ask about how you read L2. As Eric stated it would be extremely helpful to also see examples of it in action for the most basic "tells" so to speak. What a good entry/exit looks like via L2+Time and sales in OTC stocks.

    ReplyDelete
  3. UnknownFebruary 14, 2014 at 10:23 PM

    Tim, thanks so much for sharing much of your wisdom about the markets, you truly are an inspiration to us all! Your story is just mind blowing and I hope to one day have success like yourself because you make me believe that its all possible! Anyways I was just wondering which one of Sykes' DVD's would you say has helped/benefitted you the most which still applies to your trading today? Thanks again for all of your help!

    Ben

    ReplyDelete
    Replies
    1. Tim GrittaniFebruary 16, 2014 at 10:10 AM

      I've only seen Pennystocking Part Deux, a lot of people say that's the best DVD of his. I recommend it more for beginners than someone who knows the patterns already.

      I also highly recommend Nate's DVD. I'll probably do a blog post soon about this as well

      Delete
    2. UnknownMarch 25, 2014 at 11:50 PM

      What is Nate's DVD called Tim?

      Delete
    3. DanielMarch 29, 2014 at 5:17 PM

      Investors Live: Textbook Trading DVD
      http://www.investimonials.com/dvds/reviews-investors-live-textbook-trading-dvd.aspx

      Delete
    4. UnknownApril 1, 2014 at 1:23 PM

      When you enrolled as Tim Sykes student didn't you get all the material as far as DVDs? Did you only watch the one or how did it work for you and how did you learn?

      Delete
    5. UnknownApril 5, 2014 at 5:46 PM

      Thank you Daniel

      Delete
    6. UnknownJuly 5, 2020 at 6:19 AM

      Thank you for education us on the use of LEVEL 2 . It was very helpful as a newbie. Please continue to teach. THANK YOU!

      Delete
  4. JoeFebruary 18, 2014 at 5:38 PM

    Tim - Thank you very much for the videos! Keep it coming especially regarding advanced level 2 - love learning from the master. Congrats on your success - hope you have much more success. If I can only learn to cut losses. I have good Winning%:- 65.1% Avg Gain:7.56 - but not getting the results I want as I let losers run.

    ReplyDelete
  5. ChrisFebruary 20, 2014 at 9:40 PM

    Hi Tim Thanks a million for your info. I also cannot wait to see your next video on level 2 since I think understanding how to use it is paramount when trading

    ReplyDelete
  6. Sean SternFebruary 25, 2014 at 2:08 PM

    Thank you for the basics video. Still a newbie but have been trading live for about 4 months and didn't know the simple level 2 concept that a market maker can only show up once on BID or ASK. When a big order went away I thought the person cancelled it or it was gone. Didn't know could have just been an order closer to actual price of stock from same market maker. BIG HELP - Thank you!

    ReplyDelete
  7. KiliMatsFebruary 26, 2014 at 8:02 PM

    do you have the private link to view those two video in high resolution like the other you posted recently ?

    ReplyDelete
  8. SuperMario8March 5, 2014 at 11:33 AM

    Awesome Videos Tim, you are the best!!!

    ReplyDelete
  9. -JohnBMarch 25, 2014 at 8:00 AM

    Gosh Tim, watching L2 on ERBB today from 10:15 was just poetry in motion. I was watching for the crack of 0.1050, which it did and the price just ran with MM's just loading on the best ASK as it fell and fell. By 10:30 I saw as the ASK dried up, and the BID started stacking - we now had the bounce in play. This is pure Tim Grittani Trade The Ticker knowledge learned right here in this post.

    ReplyDelete
  10. UnknownMarch 25, 2014 at 11:53 PM

    Tim,

    Is there a link to a better quality for these 2 videos?
    Thanks again for the vids. Humbly appreciated!

    ReplyDelete
  11. DanielMarch 29, 2014 at 5:41 PM

    For ultimate beginners like myself who can't grasp the data from Tim's videos above, I found the link below which helped me. I have no affiliation with investorshub, I just wanted an undercut to Tim's explanation. Now to re-watch Tims videos!

    http://ih.advfn.com/education/what-you-need-to-know-about-level-2-stock-market-quotes

    ReplyDelete
    Replies
    1. DanielMarch 29, 2014 at 5:52 PM

      Now every word of Tim's post makes sense to me. Thanks Tim for the valuable information!

      Delete
  12. UnknownApril 18, 2014 at 4:28 PM

    Tim
    Thanks so much for taking your time to help us out. Its very nice to ask questions and get honest, straight forward answers that we newbies need to get better. Sometimes when the long term , experienced traders explain something it's in terms and on their years experience level and sometimes hard to understand. Thanks for taking the time to get back down to our level and remember where you've been. That will only help us get to your level some day and talk smack across the table.

    ReplyDelete
  13. UnknownApril 22, 2014 at 5:04 PM

    Tim
    So i notice by watching your videos on youtube that you usually base your actions on what level 2 is doing correct?
    If so, when do you go long or short? when level 2 is doing?

    ReplyDelete
  14. EricJanuary 10, 2015 at 9:20 AM

    Great stuff!

    ReplyDelete
  15. UnknownFebruary 4, 2015 at 7:22 AM

    For the first time since 2011 I am able to understand just a little bit of level 2 and time and sales. You are an asset!

    ReplyDelete
  16. BenJuly 10, 2015 at 4:48 AM

    This comment has been removed by the author.

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  17. UnknownJuly 29, 2015 at 2:48 AM

    This comment has been removed by a blog administrator.

    ReplyDelete
  18. HJNovember 15, 2015 at 3:18 AM

    I have a question.... What really are pink prints and what does it mean when you mentioned something of a panic?

    ReplyDelete
  19. UnknownDecember 8, 2015 at 11:17 PM

    This comment has been removed by a blog administrator.

    ReplyDelete
  20. KMercadoJanuary 14, 2016 at 7:37 PM

    Hi Tim G,

    Thanks for all you do - in the first video; when someone is soaking up size - should it be viewed as positive or negative?

    I guess it depends on your position (long or short) but can you give a quick example on two scenarios? Or do you cover this in a video?

    Thanks!

    ReplyDelete
    Replies
    1. Tim GrittaniJanuary 18, 2016 at 12:22 PM

      When buyers are soaking up size, if you're short, it's a bad thing and a sign maybe it's time to cover. If you're looking to long though and play the bounce, that's maybe a sign that it's time to give it a shot. Sorry I don't have more videos of this!

      Delete
  21. AnonymousJanuary 21, 2016 at 2:25 PM

    Hey Tim just want let you know that none of level two videos work except for one. Btw I really appreciate all the info in this blog. I have seen everything except for the level two videos. Thanks a ton.

    ReplyDelete
  22. eShopSuperStore.comJanuary 28, 2016 at 11:57 PM

    I see no videos.

    ReplyDelete
  23. eShopSuperStore.comJanuary 28, 2016 at 11:58 PM

    This comment has been removed by the author.

    ReplyDelete
  24. a1February 7, 2016 at 7:51 AM

    Where are the level 2 videos?

    ReplyDelete
  25. Clay WoodsFebruary 8, 2016 at 7:46 AM

    Hey Tim,

    I was just trying to view the level 2 basic video and I couldn't find it. Could you repost please?

    Just trying to learn so that I can trade independently and smart.

    Thanks

    ReplyDelete
  26. RaidFebruary 11, 2016 at 7:03 AM

    When will this be avaible Tim?

    ReplyDelete
  27. GiovannaFebruary 12, 2016 at 10:59 AM

    Will the videos be back up soon? Thanks

    ReplyDelete
  28. UnknownMay 30, 2016 at 5:54 AM

    OMG! I have so much to learn : )
    Received an Inheritance and cannot let it go to waist!
    Thanks Tim for videos and help! Tammy

    ReplyDelete
  29. Blessed1June 3, 2016 at 10:48 AM

    Hi Tim,
    Learning a lot from your blog. Thanks a lot. My question is since you base more off of level 2 than the chart could you further explain when do you buy/sell based on what you see filling bid/ask?

    ReplyDelete
    Replies
    1. UnknownJune 3, 2016 at 12:16 PM

      Hello Blessed, Tim mainly uses Level 2 with OTC stocks. You use the level 2 so that you can try to figure out when the stock is turning from gr/red or red/gr... most of the time you will see the level 2 hold at a certain price a couple times, this is your support.. so if the stock goes up a lil then it comes back down to your support level, you can buy at the point and watch the stock go up a lil bit. While watching level 2, you can see when the stock is gonna turn again and when you see the signs in level 2 you can then sell.

      Delete
    2. UnknownJune 3, 2016 at 12:20 PM

      What you also want to look for is higher lows and higher highs. Once a higher low sets, that should be your new support if its high enough, if that higher low holds a 2nd time you may want to look at buying because as stated above that support shows that it can hold and you can watch the price go up a bit.

      Delete
  30. JasonJune 19, 2016 at 6:32 PM

    Hey Tim, I'm interested in learning level 2 however I work a 9 to 5 and im unable to read the tape during the day. Any suggestions on how I can practice?

    ReplyDelete
  31. Lucia PartikovaJuly 14, 2016 at 6:17 AM

    I love you Tim for this info! Super useful

    ReplyDelete
  32. UnknownAugust 12, 2016 at 9:57 AM

    Hi Tim!!!

    Finished reading everything!!! Super helpful!!! I have a few questions though:

    1. If you are trading base on level 2 and the ticker, it seems that you don't need the fundamentals of the company as long as it has a good volume. The history charts won't matter anymore as well. Am I making sense?

    2. And I might sound like I haven't read your blog or penny stocking 101. But just to clarify... OTC markets are also penny stocks, Right?

    Thank again, Tim!!!

    ReplyDelete
  33. UnknownSeptember 2, 2017 at 9:27 AM

    Hey Tim, does it matter how much market makers are there or that what only matters is the total amount of shares from the best bid/ask?

    ReplyDelete
  34. AnonymousJanuary 1, 2018 at 2:38 PM

    Hi Tim, I am building my Blog and have studies your materials for the past year along with Trading Tickers DVD and many other DVD's; I really like your level 2 videos and content on this blog and would love post them on my blog, Under my " technical Analysis page. I will give you credit and reference your blog: is that okay? see my blog for reference: https://mtdtrades.blogspot.com/p/technical-analysis.html

    PS- I met you and your wife at the orlando conference last year and thank you for sharing and being so humble.

    ReplyDelete
  35. UnknownOctober 3, 2018 at 4:18 PM

    Hi Tim,
    Thanks for sharing your knowledge, its very appreciated.
    Could I ask you about the spread and how this influences the price action, I've noticed the wider the spread and the numbers of shares for each bid and ask influences the direction of the price action, could you maybe run through how this works?

    ReplyDelete
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  38. UnknownSeptember 1, 2021 at 2:16 AM

    I have a question regarding level 2.

    I understand that the red and greed lines hitting the time and sales tape are basically red tapes - hitting the bid / green tapes hitting the ask.

    However, what im trying to understand is does the green line means a buyer is hitting the ask and the red line means the seller is hitting the bid?

    Basically red line - seller / green line - buyer

    The reason why im asking this question is theoretically I can be a buyer and place my order on the bid for a better entry price, does that mean my buying order will be marked red on the time and sales tape since im hitting the bid ( even the fact that im buying not selling )

    ReplyDelete
  39. UnknownFebruary 5, 2022 at 8:49 AM

    This is awesome thank you! The bare basics - perhaps the best explanation of level 2 I have found and it only took 5 minutes!

    ReplyDelete

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