When traders start working with live data feeds, they often hear about “Level 1” and “Level 2” market data. But what’s the difference, and which one is better for your trading style?
The answer depends on how you analyse the market, whether through Order Flow, Volume, clean Price Action, or the Depth of Market (DOM).
What Is Level 1 Market Data?
Level 1 market data provides the essential real-time information every trader needs:
- Best Bid and Ask Prices (the Top of Book)
- Last Traded Price
- Volume and Delta Data
This data suffices for traders using Order Flow, Volume Analysis, or Price Action.
With Level 1, you can:
- Analyse Delta and Session Delta.
- Study Volume Clusters and Footprint Charts.
- Build Volume Profiles and TPO Charts.
Level 1 is often all you need for reading imbalances, absorption, or volume build-up at key levels, or just for real-time price action.
When Level 2 Data Becomes Necessary
Level 2, on the other hand, goes deeper. It shows you the entire order book, not just the top bid and ask.
This means that with Level 2, you can see limit orders stacked at multiple price levels, giving insight into market depth and liquidity behaviour.
Level 2 data is ideal if you:
- Trade using the DOM (Depth of Market).
- Use heatmaps to visualise liquidity.
- Work with the DOM Surface (DSF) in platforms like Quantower.
- Have a scalping or micro-scalping style, where every tick matters.
Level 2 gives you data for strategies that rely on liquidity behaviour and fast order book changes.
Level 1 and Level 2 Comparison
| Trading Focus | Recommended Level | Why |
| Order Flow, Volume Analysis, Price Action Strategies | Level 1 | Provides real-time bid/ask, delta, and volume, which is enough for footprint, volume profile, TPO, and strategies focused on price action. |
| DOM and Heatmaps | Level 2 | Includes market depth and visible limit orders, crucial for DOM-based strategies. |
If you don’t actively trade from the DOM and mainly study Order Flow or Price Action, you’ll be perfectly fine with Level 1.
If you scalp or react to liquidity shifts in the order book, Level 2 offers the added precision and transparency required for these quick strategies.
Where to Get Level 1 or Level 2 Data
You can purchase both Level 1 and Level 2 data through different providers and brokers.
Here are the most common options:
- DXFeed: Independent provider where you can subscribe directly.
- AMP Futures: Offers Level 1 and Level 2 within their trading platforms.
- CQG and Rithmic: Reliable data feeds used by professional traders.
- Prop Firms: Most include a built-in data feed as part of their subscription, so you don’t need to purchase one separately.
If you’re trading via a broker, check which feeds they support and choose Level 1 or Level 2 based on your trading style.
Conclusion
A reliable data feed is crucial. Choose the one that matches your trading style to maximise results.
- If your focus is Order Flow, Price Action, or Volume Profile/TPO, Level 1 gives you what you need.
- But for DOM-based scalpers, Level 2 is worth the upgrade for its detailed view of market depth.
Knowing the difference ensures you pay only for what aligns with your strategy.
