SynthTrader, that is GREAT information for newer traders. Thanks for sharing your knowledge publicly!
I'd like to add some information that might also be helpful.
Probably the biggest advantage to having L2 is to watch MM movement. As SynthTrader suggests, if you see one of the retail MM's suddenly show up on the bid or ask, then you know something signficant is happening (news coming out, company is diluting, insiders are buying or selling, promotional shares are hitting the market, etc).
L2 is also a great tool to use for entry/exit. For example, if you see 5 MM's on the bid and 1 MM on the ask, it might be a sign that the ask is about to fall, and the price getting ready to tick up. So that might be a good time to enter before it ticks up.
After using L2 for awhile, you'll also be able to start spotting some tricks that MM's use to manipulate a stock's price to make things appear one way when something else is really happening. It will become obvious after getting familiar with L2.