Thread by @SalehTrades_

🚨Lv.2 / In day trading, the bid and ask prices are important to understand, as they represent the prices at which a security can be bought or sold... --> #level2 #Lv2 #bid #ask

... The bid price is the highest price that a buyer is willing to pay for a security, while the ask price is the lowest price that a seller is willing to accept. The difference between the bid and ask prices is known as the spread, and it represents the cost of buying or selling.

To use the bid and ask prices in day trading, traders should consider the following tips:

1. Look for a high number of buy orders: If there are a large number of buy orders at or above the current market price, it may indicate that there is strong demand for the stock.

2. Look for a small number of sell orders: If there are relatively few sell orders at or below the current market price, it may indicate that there are not many sellers willing to sell the stock at the current price, which could be a sign of strength.

3. Look for a narrow spread: A narrow spread between the bid and ask prices may indicate that there is strong demand for the stock, as buyers and sellers are willing to trade at relatively similar prices.

4. Look for large orders: If there are large orders being placed on the level 2 data, it could indicate that there is significant buying or selling activity for the stock, which could be a sign of strength or weakness depending on the direction of the orders.

5. Clearing a wall on the ask is the process of buying a large quantity of a security at the ask price, with the intention of pushing the price higher. A "wall" on the ask refers to a large number of orders to sell a security at the ask price, ....

5. cont... which may create resistance and prevent the price from moving higher. Clearing a wall on the ask involves buying enough of the security to absorb all of the sell orders at the ask price, which can help push the price higher. (Chipping the ask)

6. A seller dumping into the bid is the process of selling a large quantity of a security at the bid price, with the intention of pushing the price lower. (Selling into the Bid)

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Happy holidays all <3

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