Technical Analysis | New Person Post - Level 2

9th Mar '21 by unbelievablejeff

11 comments 1161 reads

Hi all,

I am in the midst of doing some research on Level 2 and have looked at ADVFN as it had been mentioned in a book. They have an ok video explaining their offering,

My understanding is as follows:

L2 shows the full order book
Thus enabling you to identify trend and areas of possible support/resistance etc

Where I get a bit confused is say you have:

Looked at the order book on ADVFN Level 2 and established the price you want to get in at.
How would you normally go about placing your order at your required price? Would you just place a limit order with your broker?

I am sorry if this has been covered before but I was advised there isn't a search feature for the forums currently - which is a little surprising.

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About the Author

Unbelievablejeff

Premium Member

I've invested for a while but mainly in funds that are multi-asset and that you put your money in and then not do much more! I am now looking to progress and take control of my own investing. As a newbie I have a lot to learn I am sure, but looking forward to it. more »

11 comments

snavira

9th Mar '21

You would place a limit order. On the question of enhanced search features I remember raising this a while ago as a request, not sure if it has made it onto the roadmap

unbelievablejeff

9th Mar '21

Thank you for your response.

I have opened an account with IG and see they offer DMA but with that you buy a CFD rather than own the asset directly. Given my experience at this time I think a limit order seems a better option so I am almost glad that was your response

Laughton

9th Mar '21

I could well be wrong so more than happy to be corrected but my experience of DMA and placing a limit order has been less than brilliant but maybe that was a problem with the broker I used.

When placing the limit order I had to agree to partial fills so, for example, if I wanted to take a reasonable position size in Company A at a price of 100p so placed a limit order for 10,000 shares.

The problem was that sellers kept taking small bites and it took 20 trades spread over the day to fill my order. OK the broker didn't charge full dealing charge on each trade but dealing costs overall did impact the overall cost.

Something you might want to consider and clarify with your broker before going down this road.

unbelievablejeff

9th Mar '21

Thanks, sounds like something to keep this in mind.

Rusty2

10th Mar '21

This limit order filling happens on share dealing accounts as well on IG.

unbelievablejeff

23rd Apr '21

Thank you for taking the time to reply and information, apologies for my delayed response - I thought I would get a notification to say someone had replied to my thread but it doesn't look like you do?

unbelievablejeff

23rd Apr '21

Cheers Herbie

dcon85

23rd Apr '21

Hi unbelievablejeff,

I was looking into this recently and found an article that may be of use:-

https://www.shiftingshares.com...

It's probably not something I need due to my investment style, but something I've noticed about my conventional share dealing broker is that I've never had a Limit Order, Stop Loss or even Market Best order filled before. Despite prices being reached - ie I could go and place a trade directly but the pending order wouldn't fill. I accidentally placed a Market Best order once on a share that was rising fairly quickly so I phoned up to cancel the order. I asked why it hadn't been filled and they explained that the orders go into a queue - I'm with ii - I don't know if it is the same with other brokers.

Hopefully some of the above is useful.

Rusty2

23rd Apr '21

It does happen with other brokers, on HL I have cancelled fill orders to buy and bought at a price below the order price. On IG I've had partial orders filled at a low price but for some amounts not the whole order. HL did not do partial orders. At least the dealing fees on IG are low, I pay £3 per transaction, HL is nearly £12. On IG I would like the option of partial or full order or at least set a limit on minimum number of shares, it's not worth buying just 2 shares in most UK companies, even if the price is good.

unbelievablejeff

24th Apr '21

Thanks for sharing the article it was an informative read. I did also find a guide from ADVFN on Level 2 that was a good read.

I have Level 2 at the moment with ADVFN. I am still working out whether I need it long term but it is helping with my overall education, especially being new to this. Some may say that’s an expensive eduction but I like to have a good understanding of things I get involved in, even more so where my money is involved!

I am with IG and I have placed a couple of orders on the book with limit orders, utilising Level 2 to get me in at a better price but whilst still having a realistic chance of being filled in the timeframe I wanted it filled.

One share I placed a limit order was a smaller share and it did not appear on the order book or get filled. This confused me, especially as the price reached my level and ended up going below it. I questioned this and was told it was because the share in question was a SETSqx (as it was a more illiquid share) and my order would only appear on the book during the auction.

GloucesterBob

24th Apr '21

Naked Trader recommends Level 2, but it's not cheap, my question is, if you are not a trader what advantage does it give you, above saving a couple of percentage points, which if the share is a long term hold, does it matter.

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Unbelievablejeff

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