Arnie, With all due respect, kiss off. You have no idea who you are talking to, and no I don't mean that in the mafioso sense. You simply don't know who you are talking to, so turn your chair around and talk to the picture behind your desk, friend. Do not purpose to know what I do or do not know in regards to my current track record or my knowledge of what I want to do with TA. I never mentioned what I had been doing or what I thought I would use TA for, basically, because idiots like you could come on and say "NO YOU ARE NOT USING THE INFORMATION CORRECTLY, YOU DONT KNOW JACK SHIT" and piss me off with their comments. You succeeded, nontheless. Stick to answering the question regarding tape reading or the prior question or just take a hike, either way, i dont really give a damn what you think or don't think. Regards
Investor - i trade futures, so i don't know if this question excludes me. however, you could trade ETFs and theoretically experience a similar behavior. anyway ... i use Market Profile. i was using more stuff to 'confirm' what MP projected, but now trade just MP. it's not a holy grail or panacea or 100% winner. paying attention to it and trading it properly, i have more, better winners and fewer, smaller losers. it took time for me to learn (and am still learning) and i think to really take it to new levels it requires some finesse. maybe that's true with everything, maybe not. the other TA i use is simple PPs and S/R levels - mostly so i don't get punked when the rest of the world is trading off the same levels. i imagine that every TA indicator/oscillator is successfully traded by someone. a lot has to do with style - i found something i can trade that fits my style. i like that. i feel it is all up to me now to let it work. hth take care omni
Omni, Appreciate the response man. Ill tell you what I did and what I based it on. Basically the SMH (Semi Holders Trust) is an ETF that tracks semiconductor stocks such as Intel, Texas Ins., and so on. I saw a couple of days ago that the index was hitting the lower bollinger band and that the other Technical Indicators were severely weak (MACD, RSI, Stoch) etc., setting up a possible turn. Secondly, I looked at S/R levels based on a 6 month and 1 year chart. I bought it at 33.93, but was prepared to buy it even higher a few days before, somewhere in the 34.50 range, which is where I thought support was at the 200 day EMA, which it broke for a couple of days. I cant dik around over 0.50 cents because of my current trading arrangement and because technically speaking, even when my direct access account is open, I won't know enough about tape reading. Anyway, even though I bought it at 33.93, consider that I owned it at 34.50 because I was prepared to do so based on S/R analysis and other indicators in my favor, what do you think I could have done to get me a better price closer to the low of 33.65 that happened on Wednesday October 12th. Obviously, the stock is now positive at 34.72 and I will continue to watch the technicals, but what can I do and what should I be looking at to make me better. Oh and please dont say read the tape, explain what that means to a novice, cause Ive done a lot of research on this board, and although a lot of it makes sense and looks good on paper, i cant visualize it. What is the tape. I picture a large grocery type receipt with all the trades at the different prices for the day. Is it a chart with the candlestick bars, what the hell is the tape. I mean people say watch price action...okay, ill watch. Hmmm, wow, thats interesting, theres about 20-30 ECN's bidding and offering, what the hell am i watching for?
This is a great thread (even tho it's a little dated, the concepts were very helpful to me) on tape reading.... http://www.elitetrader.com/vb/showthread.php?s=&threadid=3282 - The New Guy
others may have more educated/accurate responses, but i have a very simple view regarding 'the tape'. in fact, Market Delta is great for footprinting the tape - showing how much traded which way at what price. anyway, i just look for popular conviction. are orders piling up? are they staying? or are they dropping off? are we finding new business or exhausting this side (buyers or sellers)? much spoofing? are we doing a good job of moving in a particular direction? also, keep in mind, i trade intraday, so timeframe may also impact the value/importance of tape-reading. and, again, i don't know how well what i see and look for correlates to how you would read individual stocks/ETFs. anyway, thx for sharing the details of your recent experience (and your questions). i hope someone from the board can help better answer your questions. take care omni BTW: there is a PDF available somewhere by Richard Wycoff (sp?) about tape reading. i have looked for it and don't think i have it anymore. someone else might. i think dbphoenix used to have it and now frequents trade2win.com ... you might check with him. otherwise, if i do come across it again, i will let you know.
Im not trying to sound foolish, and yes, I understand that I need to watch carefully what a stock does around key numbers. Example, say I was watching the SMH the day it traded at 34.50. I believe it was Monday, October 10. The technical indicators were all weak and thus in my favor, example: hitting lower bollinger band, MACD negative, RSI negative, Stochastics negative, also, based on my analysis, it was at support levels..... the thing is.....so what.....all these same indicators were there when the stock was at 35.00 dollars to. And guess what, the stock still proceeded to go down to 34.50 and then 34.00 and then it even hit 33.65 intraday on Wednesday October 12th. An idiot with any degree of knowledge could have said, yeah, it looks like a buying opportunity, when the stock was at 35.00, based on the above indicators, but only the truly good traders would have known the stock was going lower and that a better buy could be had. That is the point of the people on this board. I understand that, its not that I dont. So, people say dont base it on the technicals, because even the technicals can be wrong. Okay fine. 1) My question was, which technicals would have prevented the novice who saw the stock at 35.00 from buying based on the above mentioned technicals. Are there any better combinations, and if so which, etc. 2) Okay, everyone says price action and everyone also says tape reading? This is an AMEX stock, one with high ECN participation. Explain what I am looking for? What is the tape, is it the chart with the candlesticks that everyone loves to talk about? Or is it merely a spreadsheet showing price of trades by time and volume, almost in a grocerly list format? What is this tape we are at that will signal that not 35.00 nor 34.50 nor even 34.00 was a good buying opportunity. I mean, heck 34.3 was the 200 day EMA. Someone watching price action and tape reading would have seen that this level was going to break that day and therefore would not have bought, whereas someone like me would have thought, "WOW, ALL THESE OTHER INDICATORS AND NOW ITS HITTING ITS 200 DAY EMA TOO, ITS DEFINITILY OVERSOLD NOW!!!! What is it that they are seeing that tells them that, no, it is not yet done going down. Thanks.
Good stuff! I believe 'reading the tape' is a market colloquialism which dates back to the ole days. The tape was the ticker tape of yesteryear, which used to wind out of the old glass ticker tap machines. Hence, 'reading the tape' would mean someone hunched over this ticker tape trying to decipher where price is going to move next. It's not too much different than watching the CNBC ticker scroll by all day and trying to figure out where the stock will be moving next. I believe we've gotten to the point now where 'tape reading' has become quite a sophisticated activity, with advanced charting, market profile, etc ... Price Action is just that. Can't explain it too well right now?! As for the SMH, I don't think we've seen the bottom just yet.