I just proved to you that reading the tape in stocks makes zero sense. You said just now "If the tape is slow, then there is not much interest in these prices so expect something to change or do something better with your time." -> So, you are saying you actually know nothing: When the tape is slow either (=50%) something will change (you are not even saying up or down, how could you anyway), or ignore that market (=50%). Wow, to come to such conclusion I certainly do not need to watch the "tape". Why I am claiming this assertion alone is already completely wrong is that the same second you concluded the above, a huge trade may be crossed in a dark pool, and seconds or minutes later the position may be hedged or not, you simply don't know. Or there may be no trade that is currently being crossed in any of the dark pools. The point here is, you simply do not have the full picture and in fact you have a completely lacking picture by looking at trades in real-time. Why do I get the impression you sound like a middle-man by touting "tape reading" and in the same sentence refer me to "Jigsaw" (whatever that is, a person, software, approach,...). I told you already clearly that for an educated, informed, and intelligent person it makes zero sense to attach the slightest value to tape reading of stock transactions in 2016. And I gave you very specific examples WHY. (see previous post of mine). You in turn have not refuted the points I made with a single piece of fact or detailed information. But instead link to someone or something that apparently proves tape reading works. Let me tell you something : I can pick and choose a piece of price action that was deliberately chosen to make ANY point I want. I can prove momentum trading works, mean reversion works, martingaling, reading sun or moon phases, wavelets, fib levels, or anything else under the sun works. The problem with all the above is that over time when you have a large enough sample size none of the above work. That is the number 1 trick that all those snake oil salesmen use to bait and hook unassuming newbies and I outright hate such attitude and shilling. It is deceiving beginners with the full knowledge that it does not work. (If you knew of one approach that worked, would you EVER share it with anyone? Ask yourself that one single question). And again I am wondering, what is it with this season of the year that every single day another vendor or self-proclaimed god trader pops up on this site to convince the rest of the world that they have found the holy grail. There is no friggin holy grail in this business. Being desperate is justifyabe, but there is simply no excuse for being stupid.
that is why I asked, please define "tape reading" clearly for everyone and as basis for all future discussions. And whom are you addressing? Who is "they"? I never claimed the only other alternative to "tape reading" is staring at charts. As I clearly have shown reading the tape on stocks makes zero sense. The only way analyzing trade executions and money flow is when there is one and only one centralized exchange. That is not even the case for most commodities anymore today. Anyone can trade gold in Chiacago and hedge the position in Singapore or Japan. The contracts are not fungible but that is irrelevant for trade and money flow. Just because there was a big contract that crossed the tape tells you nowadays nothing about anything. Your comment on dark pool transactions makes little sense because when you see that trade and its volume the actor may have already offset the position, hedged it, done anything under the sun with it. Tape reading for stocks today is exactly the same as trading on a delayed data feed. I give you an example in case the above is too difficult to comprehend: What someone does in a dark pool and when: * 12:01:05.123 Trader A buys 50000 AAPL (Transaction 1) at the offer, 2 levels deep * 12:01:55.572 Trader A sells 50000 AAPL (Transaction 2) What you see and do: 12:01:30.432 You see Transaction 1 and start buying believing there is a lot of size and someone bought at the offer, you actually don't know who and neither do you know in which dark pool 12:01:55.642 You start wondering why bids and offers start to soften but because there is not much size crossing, you do not worry and keep the position on. 12:02:30.012 You see Transaction 2 and are like "damn, I got owned once again", and you turn around and sell your position at a loss.
Again, why are you focusing on the Level 2 instead of the Tape? The prints matter. Where, how much size, how many and which way did they transact? Pool, lit market, which ECN, taker or maker? If you find a pattern, you have edge. If you see an iceberg soaking up 500k shares the entire moring via ARCA at 50cts and stock went higher but came back into the close and suddenly he's not there anymore, what does this tell you? You have to gather hints and clues and trade accordingly. Noone gives a flying fk what the level 2 is showing. It's about the prints and untill you don't understand that, you don't know anything about reading tape. Forget about piggybacking big orders in order to make 5cts, that game is over. Big picture, my friend.
I never talked about level 2, I talked about trades. Are you not aware that dark pools do not need to report their trades right away? They have a 90 second window (last time I checked).
Wow.. ok. I am trying to keep it relevant to the original poster. My argument is that it should be possible to just trade from the tape given I know that lots of prop futures traders are just watching the DOM. Time and Sales / tape be just a different way to show this info. Prop traders are using this basic info (DOM / Tape) as a foundation for developing their trader's individual edge all over the world. There is no secret sauce... did I say there was?! I have also stated there are easier tools to read that same info around and historical order flow info... but argue why can't you just monitor a market using the tape as all the info is there barring depth. Also understanding the tape adds a level of understanding of markets you don't get from TA or other methods IMO. Certainly makes it easier to develop ADL or other execution systems later in your trading career to do the work for you. I provided some reference material for those interested that I think can help those who want to learn about tape reading. Alternatively you can also research recommended learning material by prop firms which usually incorporate some tape reading skills. Prop trading resources probably the best indicator of what newbies should be focusing on instead of blindly following advice in the forums. Enjoy your day!
I don't know when "last time" was, but every ATS reports prints immediately to the TRF's, so better look it up again. And before we get into that "evil darkpool" - discussion again and you are trying to convince me by using truisms you read somewhere on the internet, do yourself a favour: Take pen and paper and watch the prints of a stock in play during the first two trading hours. Preferrably below 60$ and between 1M and 5M daily average volume. Write down price and time where you see unusual activity on the tape, either a lot of prints or big prints. Than see for yourself.
that is not true, there is a 10 second window during which the dark pool operator is required to report trades. So, I stand corrected, it has been tightened to 10 seconds rather than 90 seconds but still this is a HUGE delay by today's standards and again only supports my above points. http://www.finra.org/industry/notices/13-19
So, can you admit that what you said does not apply to any market where there is no centralized exchange? Can you admit that your points are invalidated for stocks that trade in a fragmented market? Because if yes then we can move on to futures.
You missed "as soon as practicable"... Really, I'm sick of arguing with paper traders, naysayers and people without hands on experience. Fragmented or not, as soon as there is a consolidated tape everything is fine. I did not say it was easy, but if you just want to be right, here you go: You are right.
Now I am a paper trader even though you know nothing about me? Interesting...go ahead...shoot the messenger...the message stands on sound footings, though. What you are attempting to do is the same as someone who looks at currencies at FXCM, their bids and offers, and looks at the trading volume, reported by FXCM and then claims he can gauge market internals from such. Good luck, you do what you must do, at least I warned beginners to be extremely critical of your claims. Your claims about the consolidated tape show that you hardly understand anything about market fragmentation and the issues it poses.