How Do You Determine Supply/Demand Pressure From Bid/Ask Price/Quantity?
You used to see buying and selling pressure with a level 2 real-time trading platform, when the bid/ask spread was in fractions. At that time you could see the market makers line up on the bid or ask and see the buying pressure or selling pressure. It is almost impossible to see that now because the average trader got wise to that play and when the bid/ask was changed to pennies it leveled the playing field, making it more difficult to actually see who is buying and who is selling. Also, there are Electronic Networks [ECN]’s that market makers can use to hide their identity. This is probably the main reason day-traders get washed out of the market. They think the market is going one way when in fact it going the opposite. Reading Level 2 is consistently inconsistent. Under image in Google type in level 2 and you can see what a level 2 screen looks like. I think cost of level 2 quotes is around $250.00/month.
