Guide to Day Trading Strategies

H O W T O D A Y T R A D E
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do not have to worry about missing the breakout because they got distracted. The important 
thing to remember about this type of stop order is, that using a stop limit will be important in 
case the market spikes dramatically at the breakout spot. You would not want to get 
À
lled at the 
top of that spike on a market order.
Level2 and Time & Sales Window by Lightspeed.
Level2
Once you have setup an account with the broker you feel will be a good 
À
t for your needs, you 
should be able to pull up a few different tools from inside the platform. You will need to pull up a 
Market Depth (Level2) window, a Time and Sales window, and an Order Entry window. With some 
brokers, all three tools are included in one window, while others have separate windows for each 

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R O S S C A M E R O N
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tool. When you are looking at the Market Depth window, you will 
À
rst see the Level1 prices on 
top. Level1 is the 
À
rst level of the market, this is the simple bid and ask price, also known as the 
National Best Bid and Best Offer (NBBO). The bid price is always on the left, and the ask price is 
always on the right. The bid is the price where there are buyers looking to purchase shares and 
the ask is the price where there are sellers looking to sell shares. A Level1 quote, which is what 
many part-time traders will use to place their orders, shows you the current bid and ask prices. 
However, Level1 is only the very surface of the market. As day traders, we want to know the 
Market Depth. The Market Depth, also called Level2, is two columns of price with the bid on the 
left and the ask on the right. Level2 shows us the actual number of buyers and sellers on both 
the bid and the ask. This can give us a sense of the sentiment of a stock by telling us if there 
are more buyers or sellers. A typical Level1 quote would not give you that depth of information.