Level 2 Strategies Every Day Trader MUST Know (Taught by a Prop Trader)

In this video, learn level 2 strategies every Day Trader MUST know (taught by a Prop Trader). Learn more setups from our traders bit.ly/2RAwemC
#Level2 #TapeReading #daytrading
SMB Disclosures www.smbtraining.com/blog/smb-...

[@smbcapital]

Learn more strategies from our traders bit.ly/2RAwemC

[@agedvagabond]

I have been trying to model my trading around this trading style for a few months by trading NQ rather than the tech100 components, I am curious what SMB thinks about trading the futures directly and using leading sympathies like Apple etc as a gauge of the whole market and using tape as an indicator on futures in general, in a slight reversal of what Ryan is doing here. I have really been experimenting with this full time and somedays it's like taking candy from a baby and other days I can't seem to get anything right, having my daily hard stop well below the range has let me manipulate my average price to great effect but figuring when to take the losses a bit quicker and save some stop for later has been an absolute torment as I tried to define these situations with rules, recently I just put it down to needing more experience reading the tape and accepting some things are not quantifiable and cannot have rules that are set in stone. I have also been experimenting with using Advanced trade management/bionic trade management to catch the pops on the tape and steal ticks at a predefined ratio with an autobreakeven and fast trailing tp, which works well mid range but seems to chop out at range extremes where I need to switch back to trading around a core with a wider stop and start manipulating my average price again. I have started breaking down the 15min price action by the last 3 or 4 bars and deciding to either BTP or STP, buy the pop pr sell the pop on 1 min and this has helped alot, I am wondering if SMB thinks I am wasting my time with this approach in futures, I feel I am not and it makes sense to me the way I think about the market, but I'd like some input if possible. Trading US equities is not really an option for me atm so I am playing the hand I am dealt, but I may have to experiment with stocks in play on demo.

[@Posterharpua]

ryan is a natural teacher. I love these videos and they're extremely helpful. More tape reading please!

[@smbcapital]

Glad you like them!

[@Donks-R-us]

Ryan, you do a great job at explaining what you're doing. It would be nice if your charts and tape are more easily readable.

[@scottydog9997]

Absolutely solid play, I have started using the scaling out method with my plays to build into a larger idea as well. Just phenomenal to see it being used by professionals.

[@jessemarch6613]

I'm always highly profited from watching Ryan's teaching. This was very profitable as well. Thank you for producing these instructionals to aid us in our trading journeys.

[@G_Mac_Trading]

Excellent analysis and game play, Ryan’s thinking process, short and long term plan is extremely helpful. Thank you Ryan & Mike👍

[@mikemeyers9712]

The different trading ideas are so diverse between SMB traders. Just amazing!

[@itsAsian513]

Ryan's the man. I learn so much from his scalping videos

[@smbcapital]

He's great!

[@allenc2289]

I struggle with reading the tape,are you focusing in on the Bid and Ask and the size plus the time and sales. No doubt this video will be a re-watch.SMB your the best and I appreciate the absolutely best of all teaching through the tape.Keep up the great work.

[@mikelacross1496]

1st time I really start understanding reading the tape. Excited to learn more. Great job Ryan!!!

[@lucholland3938]

Really nice work massaging that trade Ryan - great work carrying size into those resistances both on the re-add and scaling out as well as into resistance later in the day. I find those legs of the trade are the hardest to hold. Being patient into zones were we should take risk off is key to maximize r:r and put us in the driver seat.

[@smbcapital]

agreed, Ryan did a great job trading around a core on this one

[@alex94115]

Another great video from SMB. Enjoy Ryan's videos. He has an easy tone and excellent ability to explain details for the trade.

[@smbcapital]

thanks! ryan is a great teacher for sure

[@W8aMinuteG]

That was 1 of the best videos you have ever released in my opinion!! I have to watch it again and Learn the craft! Big thank you Ryan and SMB!! Very much appreciated!

[@smbcapital]

that's awesome to hear. Looks like we need to make more like this. Thx Ohad

[@W8aMinuteG]

@@smbcapital 100%

[@markusius]

It is really great watching a professional work the tape. More videos like this, please. Also, another video covering expected moves for the day would be helpful. Do you guys have a standup meeting in the morning and after the day is done to discuss? How is this done in a professional trading office?

[@KGtrades]

Great value in this video! Thank you and Keep them coming!

[@smbcapital]

thank you Kameron

[@artydodger6163]

I used this profit taking strategy this morning on AMC at the open between $15.62 and $17.27 thank u Ryan and SMB!

[@luismadrigal9896]

The “one good trade” book is extremely helpful

[@smbcapital]

awesome Luis!

[@derekmiller3234]

Excellent video Keep these specific level 2/scaling in and out videos coming!

[@smbcapital]

thx Derek, will do!

[@sams5708]

Amazing learning experience👏 Such a talent Ryan. More videos 🙏

[@smbcapital]

thanks a lot Sam!

[@guillaumevidallet7246]

What a great video, had a great trade today on PLUG implementing this strategy. Thank you

[@muthiahlakshmanan5104]

appreciate the honesty of the trader and his suggestion

[@smbcapital]

thx Muthiah

[@birdie_energy]

Thanks for the video. Do you still use manual strategies such as getting in front of a held bid/offer or using it as way to enter a trade when it drops, unusual hold on the bid/offer, pattern recognition, corresponding futures plays?

[@greges6809]

this is amazing! what a priceless lesson, thank you! more videos from Ryan, please :)

[@smbcapital]

Thanks Greg, will definitely have Ryan back on

[@t.j.mueller--artfromabove1837]

Thank you for sharing, Ryan! Brilliant work.

[@smbcapital]

Glad you enjoyed it!

[@SuccessOverStress]

Ooooooooh. I watched the entire thing. Not as colorful as watching Tiktok... but just as exciting!!!! Thank you!!!

[@Peter-fi7tu]

great vid...whats even more imp then reading L2 in my eyes is the risk mgmt and the way of managing risk with size

[@smbcapital]

risk management is critical, so important!

[@joebaby555]

That was so great! Thank you for this generous educational content 🙏🔥✍🏻✍🏻✍🏻

[@smbcapital]

Glad it was helpful!

[@ehudkrispil]

Thank you for the informative video here - I may watch this few more times and take notes. Ryan and SMB - Shana Tova!

[@smbcapital]

Awesome! Thank you!

[@nicklovelight3304]

soo cool and important video...love your reading the tape series thank you ryan and smb!

[@smbcapital]

thanks Nick!

[@tonyjin9018]

great video! Thank you so much for sharing !I have a question, does dark yellow means sales on the bid and light yellow means sales on the ask ?

[@sebastiantevel898]

Priceless. Thank you for sharing.

[@jasoncarrasquillo3599]

Great video. Put this to work this morning shorting TSLA early. I need to rewatch this. Like a good offense in football, I am striving to execute. Thanks for helping me become profitable again!

[@smbcapital]

Nice Jason, hope it was helpful for you!

[@richardarmenta5366]

Watching this i think I've learned how to know when a price is holding well in an area and how to scale up your position while scalping for profits and waiting for the big push to the upside. This is a great video. Thank you

[@smbcapital]

Glad it was helpful!

[@joshuatan9002]

Really good step by step explanation as well as showing the tradervue entries and exits...thank you!

[@smbcapital]

Glad you enjoyed it!

[@RawNoLimits]

Very advanced trading here. What I mean is, Ryan does a fantastic job at looking at the long-term intraday play while also implementing a scalping strategy to adjust for share size. Goes to show you need to be malleable as a trader.

[@smbcapital]

Couldn't agree more!

[@hobobum1216]

very cool thanks for the perspective. enjoy the concept of building cash in a range before the move of the day you're looking for

[@smbcapital]

thx!

[@sommi888]

🧡💛💚💙 Amazing video. Raising the bar every day ! 🧡💛💚💙

[@simonboniface905]

Excellent demonstration!

[@charlesz31415]

Great detail in this video. More please!

[@smbcapital]

You got it!

[@VisualGruntMedia]

This is gold! Thank you!!

[@Blasterzorz]

excellent video more indepth videos just like this on lower float/lower volume tickers!

[@Diety30]

Great trading, great explanation, just great content overall

[@ZoeRilla1804]

“Another one” (DJ Khaled voice) 🤣 thanks for the great video guys. That 115 area held up like a champ.

[@smbcapital]

haha, thx Lu!

[@rickyastudillo6300]

Great video Ryan and SMB!

[@smbcapital]

thx Ricky!

[@jasontaylor2237]

great video. Ryan mentioned he was stopping out so was he using a auto stop order of a certain amount everytime he got long? So if the trade didn't go his way he'd just have to stop out and get back in. Again great video I do wish there was a little more info on say what type of buy orders he was using. I assume some type of custom order script. anyway thanks

[@jambear7862]

In regards to the tape being implemented onto the candlestick chart in terms of bid ask footprint chart. What is SMB’s view on this? As it seems it would be much more useful? Thanks in advance

[@satanking35]

Thanks ryan God Bless U Buddy

[@markusius]

It is really great watching a professional work the tape. More videos like this, please. Also, another video covering expected moves for the day would be helpful. Do you guys have a standup meeting in the morning and after the day is done to discuss? How is this done in a professional trading office?

[@smbcapital]

More to come! We only have a few traders in the office right now (so communication has been remote) but SMB has different teams led by a senior trader that focuses on a certain trading style. They communicate all day long to each other. For the newer guys we have about 3-4 meetings each day to discusses what's happening. AM Meeting then meeting after the open then around 11am then one at 12:30 and another at 1:30 and after the close as well.

[@vicpso1]

I really got a lot of encouragement in understanding how we can get a steady income with this one.

[@tradingonthefence]

Bloody awesome, mate! 👏👍

[@smbcapital]

thx!

[@joefeinstein6804]

Great job keeping your head in a choppy situation. I don't know Ryan's nickname but I call him Mr. Smooth.

[@fvb1369]

This is so cool !

[@dooleyh158]

That was very enjoyable!

[@smbcapital]

awesome

[@samw3048]

Ryan’s come a long way from lookin for a point a day in /ES

[@smbcapital]

he still trades futures as well!

[@TheBgtodor]

great video thank you

[@markusthedrummer8143]

This was so impactful, thank you. I was going to ask SMB about scalping in and out like this with a non margin account but it's impossible. But as I make my transition from pt trading with a cash account to ft trading with a margin account I know I have this strategy in my playbook and am committed to it. I welcome feedback however regarding this concern- Am I misleading myself thinking oh I'll do this when I have a margin account that allows me to get in and out of positions several times within minutes? There are several times I want to do this when day trading with my cash account but can't for obvious reasons.

[@hasan0000007]

Ryan, great video as always. How do you exactly use QQQs in conjunction with your trade. Which Scenarios could play out in QQQs so that you decide to add to or reduce your position? Thank you.

[@smbcapital]

Ryan will watch the QQQ and TSLA to see if there are any diversion in either. On a short term basis any quick movement in QQQs might also cause movement in TSLA, especially important if you are scalping on a shorter time frame

[@PauloSousa-wf6mg]

Great video! I'm gravitating more and more towards quick scalping, scaling in and out, and I was not sure if my approach was correct, but seeing Ryan scalps helps me to confirm some type of ideas and methods I'm developping on my own. Thank you so much! Cheers!

[@smbcapital]

Glad it was helpful Paulo

[@rosarioporalmasdelpurgatorio]

Great video. Can you please show in detail how the tape is red? Thank you

[@MRT09]

Hey mike! Here in india there’s no venues like arca etc but only prints,bids nd offers .. is tape reading still useful w/o knowing who’s buyer/seller is?

[@aaroncordwell950]

more of these videos will help people just starting out

[@smbcapital]

plenty more in the pipeline!

[@eddie1428]

Amazing videos, apologies i'm very new can you just clarify meaning of back to my core? do you mean you have take n all lots off?

[@PhillipTritthart]

This is GOLD! Thanks so much Mike, Ryan and the rest of SMB for providing us such a great trading education! I have a more specific question on how you enter and exit these scalps around your core. I'm guessing you’re just placing market orders with your hotkeys? Would you do it the same way on low floats or would you be too concerned about the slippage? Any tipps in general on how to improve your executions (To get in and out quicker, at better prices)?

[@smbcapital]

Traders try to use limit orders most of the time. In Ryan's case he may have been throwing out limit orders above market price to see if he could get taken on his lots. Often you get lucky and will get hit on those.

[@smbcapital]

you can also setup up hot keys that will try to fill a limit order with a max of say 5 cents above the current market price which could allow you to get filled quickly but not as a market order. So if the current price was 430. and you want to get out of a short position you could use that hot key and it will attempt to cover your position though a limit order but wont exceed 430.05

[@DoingJustThat]

@@smbcapital wow now I’m enticed to read all comments

[@mattbella12]

Very interesting!

[@user-pm9cs4py9q]

this guy is incredible

[@linxdude]

yes. good stuff. more level 2 examples of scaling in out. maybe with a more volatile stock.

[@davidoihechi2849]

Can level 2 be used for trading currency pairs or just stocks?

[@jerryhenderson8923]

great video. I would like some definition of buzz words like "core" "core size"

[@TraderThiz]

Love y’all.

[@smbcapital]

love you to

[@THEAIRSOFTMAN247]

Really great content. thanks guys

[@smbcapital]

Glad you enjoyed it!

[@JoseMaldonado-uw5qo]

good video, would like more time and sales and reading the DOM.

[@dougcarlson1369]

What do the brackets ( i.e. [50] ) signify on the size amounts on his LVL 2?

[@smbcapital]

yes that's the size on bid or offer, obviously the extra zeros are removed to make it easier to read

[@hussainamani7636]

Nice one Ryan, SMB Capital guys can you please do a video on futures ? That would be great!

[@smbcapital]

thanks Hussain! we can try doing one

[@louisortiz2512]

That was amazing.

[@smbcapital]

thx Louis!

[@Jeremy-dh6ks]

Amazing

[@Victornow]

Thanks smb

[@kobebryant1614]

how can I possibly get a job or trading position at this firm?

[@alfredhitchcock7386]

This is an insanely difficult way to trade, the whole cashflow buying dips and selling rips while in a downswing... Getting out, getting back in within seconds. That was probably at least 20 or so individual orders he placed just on the open here so it's important to keep in mind that he probably has reduced commissions, unlike retail. And it's stocks. If someone tried that on a retail account in futures they would have a hefty amount of commissions. Not taking anything away from Ryan though, he's obviously crazy good at tape reading and I'm impressed.

[@ramsesp5009]

nowadays you can get around $1 Round Trip if you lease a seat & do decent volume, but nevertheless, my hats off to these guys who trade like this on Equities. We do it all the time on Futures, but it's usually not at volatile as this, at least on the BUND/FDAX. You'd think they'll lower their charting timeframe to like 15-20 seconds and react based on the pops that would occur, but they jab at it the old school way with the tape.Very interesting way to trade indeed, reminds me of the early 2000s and rave music for some reasons lol

[@alfredhitchcock7386]

@@ramsesp5009 lol yea BUND is definitely doable. There's a nice slow pace to that. I'm speaking about FGBL to be clear. I feel like reading the DOM or jigsaw is often a lot easier than reading L2 and that's why scalping in general is easier in futures. But still you have to be one hell of a scalper to beat commissions on a small account.

[@JVSOP]

I couldn't agree more. Ryan has a different style of trading that I admire. However, I couldn't scale up multiple positions against the dominant down trend on the 15 minute time frame. His strategy certainly provides food for thought.

[@backside1016]

Do you put more significance on the QQQ than SPY when trading AAPL?

[@smbcapital]

TSLA should trade more inline with QQQ than SPY

[@casanova1012]

Excellent explanation

[@smbcapital]

Glad it was helpful!

[@chr971]

Hi Bella, isn't L2 less reliable as many times spoofers and hfts place and withdraw the orders? Shouldn't we also check prints along with L2?

[@smbcapital]

Yes we rely on both L2 and prints

[@chr971]

@@smbcapital in this trade did Ryan look at prints also? Or he just traded based off L2?

[@style-]

Really great insight! I noticed he didn't have time and sales up on his screen, is just watching the level 2 more important for scalping especially in the morning when things are going really quickly? Or just a personal preference? Thanks again for these videos, amazing stuff. I'd really want to know more about market makers and algos and what their strategies are and how we should be trading around them and what we should be thinking about during our trades. Hope that makes sense.

[@smbcapital]

I think just a personal preference for Ryan. Apple would have a ton of prints so might be more difficult to keep up with all that.

[@jameswatt3214]

It’s really helpful to watch video at 50% speed

[@jjfattz]

At around 6:55 the bottom-left chart does a weird print where it goes up to almost 117, but then goes right back down like 50 cents with no wick as if price never hit that area at all.

[@jjfattz]

nvm, must be him skimming thru his recording

[@btoddw2]

This was great. So much better listening to someone like this as opposed to all the generic KZbinr shit. If I could listen to someone like this for 12-15 hours a day... man

[@yasirali709]

Have a great day

[@jayharrison3661]

Thank you for your very valuable videos! Ryan is obviously a good trader and I really appreciate all his coherent teachings. I really enjoyed this video as how a successful trader scales in and out of trades. Mentioned the VWAP support on the QQQ's the 5 day bottom pre market gap up and the 2nd day play S1 and R1 compression consolidation. But as someone who needs all the help he can get apart from describing the term 'Sticky' when price slows for a period of time, I still didn't learn anything about how to use level 2 to determine direction/when to hold/when to fold/what does the speed of the tape moving indicate/why even though there's a lot of buyers it still moves down... basically what I'm saying is I think I understand what the tape is saying and then it still does the opposite?? Or I could just be missing the point. Is it a Matrix thing or can it be explained. I've watched a lot of videos on reading the tape but nobody really explains what they are seeing as a forward indicator.

[@gauharsingh7015]

It's hard to verbalise

[@smbcapital]

Good question Jay, a lot of traders struggle with it because so much is going on at once. One of our traders Garrett explains this pretty well in this video during a Q&A kzbin.info/www/bejne/pYHFZ6Cural-jdU

[@david-rw1dt]

Does it work for nasdaq futures? Thanks

[@estebanrosal5638]

Which platform do you recommend to use? for Tape Reading.

[@smbcapital]

you need a platform that has great level two window. We use an in-house platform but there are likely a bunch of retail ones who can provide this

[@rumo8306]

What are smb capitals rules for new traders? Can they trade what when where and how they want? ...As long as there Green

[@smbcapital]

traders are free to explore different trading styles. We have stop loss limits and share limits however when they first start out and as they prove themselves we provide more capital and their limits increase.

[@user-tu6zm1hl6o]

Great video! He use only level 2 without t&s?

[@smbcapital]

In Apple he was only using level 2. The speed of the prints would also have been very fast. It's all preference. Some find it hard to read both simultaneously

[@porscheonly9705]

This is great. Price is dynamic with friction. You think a $2 move has probably $3 or even more of potential profit if you can nail washouts. Also, how come no one really ever talks about price movement on the basis of market maker setup and positioning with where they want to take the stock? They control the show. Also, that big volume on AAPL as it took its first big dip tells you that’s the buyers or market maker taking a long position. For him to have to get his exit only by bringing it up so he can sell there.

[@smbcapital]

Market makers will definitely have some control over a stock. Algos as well. Ryan discussed hunting for stops which is likely a market maker / algo program.

[@porscheonly9705]

SMB Capital pardon me if I’m wrong as I’m still learning and developing theories, but aren’t the market makers basically in complete control. Obviously they need orders to fill and lots of buys means moving the stock up. But when you think about how consolidation work, with a continuation. On trend days consolidations happens because that’s the way a market maker can exit his shorts as he has to keep selling to all the buys coming in. By consolidating he can average down his short to break even on those trades then the continuation can happen. They are seeking volume as there business is to capture the spread, so this is the rationale to why we see “stop hunting” because they are searching for liquidity. Like for example if you look at Boeing this morning. Huge sell off, IMO market makers taking it low to build in the shorts as they build their long position as Boeing is trending the past day or so. Then as volume comes in they can sell to all the buying and not be trapped with a huge short position they can’t exit.

[@billyblack3816]

Great Video. Is that Jerome Powell in the background?

[@smbcapital]

jpow comes into the office now and then

[@codesymphony]

Promote this man

[@tradergman6761]

Can you comment why Ryan didn't use Time and Sales in this trade? Also, why does his Level 2 not list exchanges and only highlight best bid and offer? Thanks! Love your videos.

[@Consciousness317]

Is Ryan trading options?

[@chieduegwim8728]

Please do you accept remote forex traders from other countries. If yes how can I get started

[@smbcapital]

we don't trade forex

[@seek3n]

Can someone suggest a platform for scalping? Smb capital show make a subscription for us to use their system 😁

[@defface777]

Anyone know what trading platform he is using in this video?

[@smbcapital]

This is out in-house platform but there are others out there which provide great level 2 data

[@fredwallinder3543]

Great job, but that really requires price action skill. I was a bit concerned that he went long when the trend on 15M was down. The "natural" thing would be to scale up selling positions on 2M but that was not what happened. So how did he get the idea that the price would go up intraday?

[@gauharsingh7015]

Gap up

[@smbcapital]

We are in a strong market right now and had sold off for a few days and now gapping higher. There is strong potential that the market would resume its trend higher - AAPL would likely also considering it's been very strong lately.

[@raghavgupta677]

Why there is no use of time and sales sir