I have spent many years day trading and teaching day traders all over the world. There is one thing I have learned to just deal with and that is change. Similar to people that make accessories for cell phones, there is always a new phone and that makes the old ones obsolete. They have to constantly adapt and be first to market with their accessories.

In day trading this is sort of the same. There were periods when using only the 3x leveraged ETFs were the way to go. There was a time when day traders only bought breakouts on a 3 or 5 minute chart. There was a phase where collecting credits for adding liquidity was all the rage. And now it seems that everyone like to trade earnings gaps. Nonetheless, there have always been tape readers or those that look at the level 2 and time and sales to try and decipher the next move. Is it time for these traders to move on and join the crowd?

There is one big problem for the level 2 traders out there right now and that is the very tool they use to trade, the computer. Algorithms are all over the place and whether you agree or not, they are here to stay. Let's think of all the reasons that an algorithm may execute an order. It could be a very large order that is being executed slowly, in pieces. It could be liquidity based. It could be a day trading strategy that trades in and out ahead of everyone else's orders. Or it could be a fund that is adjusting a large position over many days or weeks. How is a day trader supposed to see this and decipher in real time what is about to happen. In my opinion they cannot and it is time to adapt or be obsolete.