I watch specialists. If I see him buying, I buy. No stop!!!! I pyramid it every 3-5c. If I see him stop buying, I sell fast cause he's gonna blow out. That's the best I can really tell you. Follow someone for months,(in the case of mo before decimals years) and you'll almost always bank.
Gut feel. You watch something for 6-10 months, and you just can tell. No idea who's moving it, but you know it's gonna move.
Praetorian2, when watching a listed stock that is diving... like off 15 to 20 percent do you assume the specialist will try to walk it back up soon to unload some of his inventory?I mean, he has been buying it all the way down, after the pace slows and the panic abates is the specialist likely to be the first to start buying it up? Thanks
First he shows size to gun the shorts, mainly he uses them and bottom fishers like me to do his work. Then he sells.
Praetorian2, Thanks for the replies. I'll pick a couple of listed stocks and start watching them for months to come. I'm assuming you rely heavily on time and sales?? Any secrets to be aware of? Do you know of any good books on tape reading? Thanks.
Unfortunately, I have never read a good book on NYSE tape reading, and it is too bad, because this is absolutely the most important skill to have. A list of things you want to be pay attention to (besides the obvious uptick BID / offer stepping down's) : 1) Stocks rarely go straight up or straight down, it is very common for a stock to go up 30 cents and fall back 10-20 cents to shake the trees before they take it higher. You have to pay attention to the volume, is there more volume printed on the buy side than the sell side? The charts are nice as it tells you the overall trend, but nothing like a good tape reader holding on to a position through wiggles for good gains. The sizes printed, and where they printed, can be the most important piece of information. 2) Double prints are where specialists go long or short, (two prints on same price), you need to read his motives, especially off the open. Typically a gap-up on weak volume is primed for a short as the specialist went short with double prints and he will hammer the stock . . . 3) Specialist habits, like the type of shakeout he does, how he hands figures and half's, etc . . . It is critical to learn a specialist's rthyme. 4) Climax volume, anytime you see those go off, expect a big squeeze/pullback . . . always want to cover/sell at least half of your position when you see big volume going off after the stock is in an extended trend . . . Being a relatively new trader (8 months) myself I have to say tape reading is my weakst link, good luck, because it really is the most important aspect of NYSE trading, READING THE SPECIALIST . . .
Just watch mo and dis. They are 2 of the easiest to read. Just watch them. I just started trading mo again yesterday. I had 2 good scalps. Im like 90% against him for the last 200 or so scalps. He's really easy to read for quarters. Just learn how he trades it.