Hi Placebo,
Why will it be difficult to trade without L2?
LOL i was talking about the vegetable market mate and pulling AW10's leg
On a serious note , L2 helps in identifying the major players in the markets specially the key market makers. The ones who trade and usually specialize in a particular financial asset and play it day i and day out. The biggest of these big boys is known as the "Ax" which can be spotted only on the L2 screen. Just observe the L2 screen and spot the ax jumping around the bid and the ask. In a Downtrend search for the bids being held and in an uptrend search for the market makers holding the ask.
The Ax often uses a short term strategy where they buy on dips and defend a price level until a short term imbalance is created between demand and supply. Lets call this the "buying on dips" strategy
Probably you are aware of this but the reason headfaking takes place is because there are either excessive buyers at a particular level or excessive sellers when the market makers are using the "buying on dips strategy" . Either ways its harmful for the MM's financial well being and the best way to get rid of this excessive activity is by breaking support and creating a short term panic.
What seems like artificial (fake) activity here is actually the starting point of a big bullish move which can immediately by seen as price reverses instantly if one has access to L2 screens specially when an entire sequence of events unfold slowly and gradually. The sequence starts with spotting an ax , seeing his bullish activity , headfaking and instant bullish reversal.
So i really don't know why HEADFAKING is termed under the problematic category when in reality it is one of the best places to make money. I really doubt you could do the above with an L2 screen.
Cheers