Probably an agreed upon definition would help: reading the tape Attempting to predict short-term price changes by examining price and volume information as it comes across the ticker tape. from Investopedia. http://www.bnains.org/winnie/tape_reading/tape_reading.htm http://www.realitytrader.com/tapereading.html http://tradingday.com/c/tatuto/tapereading.html http://invest-faq.com/cbc/trade-trust-tape.html
Hydro you are jaded and bitter. Trading is not easy. It takes balls to have a family and compete in a job where you can have a negative earnings year. But I do it. You know why? Because I love the markets and I want to be better tomorrow than I was today. If you are trying to read the tape in the monkey old days way, yeah I agree you will get run over. I don't do this. I combine tape reading the whole market, looking at stocks on various time frames, looking for volume surge alerts, etc. After I spot something moving then I will read the tape and make money. I don't just randomly throw the same stock up on my level 2 that I traded succesfully yesterday and expect to make money in it today. Thats lazy and it will get you blown out quick. Today I made over $10,000 and I traded 520,000 shares. I made money in spy,rimm,aapl,mbi,c,qid. I lost money in acs and abk. There is alot of money in this market.
Okay. You tell yourself that. Just know at at least one man makes his living from being talented at the game, and that walstreet never changes. You can argue this to the death with me, but you can't tape read, friends of yours who could no longer can, while I and others can. That's cool, you probably have other trading skills I totally lack... holding positions for more than 30 minutes, for example, I know nothing about. Now, if you are making money from the markets, all is well, but know that outside whatever group of disgrunteled ex tapereaders who don't have the creativity to see situiations more complicated than specialist crosses getting printed with price improvement or size stepping down on the offer - a lot more goes on that is clearly outside the bounds of your awareness and there's a shitload of money out there. If you are not making money from the markets, then you're a bitter ET piker no different from the rest except a tad more intelligent and undeserving of my explanations. To assume there's no edge in me reading the tape in my stocks is abundantly absurd. Yeah man, order fow is so fragmented that sweet spots of liquidity don't exist, those algos will just con me out of my money because they were programmed that somehow circumvent the natural inefficiency of markets. Sometimes a buy program comes in and I'm the first guy to take a shot and buy 1000 shares in a spot where I have strong reasoning to believe my chances of being right are good and that I can limit my risk to a fraction of what I stand to make on the trade. Sometimes I miss my out and lose more than I thought... that's trading; sometimes a trade works out for far more than I thought. I recognize the buy and sell programs that act in my stocks and throughout the stock universe. Get it? That's like tape reading a specialist. Yes, the same computer programs run in different stocks, and there are high probability ways to profit off them which I know and othres such as yoursef believe don't exist - now that constitute an edge as much as anything outside of trading on information or orderflow. That's the game now, learning algo patterns. Aggressive ECN sell program? Hit the bid and put a bid in 35 cents down and instantly get filled. Boom 35 cents with 15 cents of risk if you've been watching the stock. People do that all day and make a killing. You are behind the times and advances in trading if you haven't caught on to algo patterns, unless you are balling extremey hard from money earned trading in these markets what you say on the matter of tape reading in these times has no level of credibility. Hydroblunt, when was the last time you stared at a thin NYSE stock and watched how it traded for a few days in a row? Sit there and see if you can recognize buy and sell programs and how they interact. If you are constrained by a loser's mentality then... hey... I guess trading isn't for everyone, nothing against that at all. But why go around ET and try to prove to ET viewers how knowledgable you are about tape reading when you have absolutely no idea what you're talking about?
Can you explain more about the algo programs. I don't expect you to give away anything proprietary, but can you give an example of how you would exploit these programs, thanks.
hahaha, you say "i dont expect you to give away anything proprietary" and then you ask for an example of how he would "exploit these programs". Just so you know, that WOULD BE PROPRIETARY INFO if he told you how he makes money exploiting the programs
fair enough. I haven't studied them too much. I imagine they create a certain pattern in order flow. I claim ignorance.
They change them every day. Even if I wanted to teach you, it wouldn't be usefu unless you learned the skills to pick them up yourself. Try tape-reading, it is possible, if you want to make money doing that, but you have to be able to notice new programs, figure out their algos, etc. You can only learn that from trying. If you focus on the tape and books it should become clear with time, if not, you aren't looking properly. Okay, I'll give you one.. WCG before it crashed used to have a sell program and a buy program for about a month working that stock every day. I could tell withabout 80% probability when the sweet spot entry or exit was, and would constantly find the right long entries at spots when the book woud be full of ecns offering but I would notice that the price wasn't declining the way it would if the programs meant to sell, and instead of panicking and spreading down 30 cents the stock has 200 share bids that keep coming back... I say "fuck it there's a buyer," define my out, buy 500 shares, if I'm right, I uptick another 100-200 in the market 10 or 20 cents higher if the stock gets bid up, and then read the tape to figure out how long to hold and where to limit. Ever since they were raided by the government the old algo programs working that stock are overtaken by the massive orderflow... but WCG is just a 3 letter ticker, the programs are the same everywhere on a certain fundamental level.
the top guy on my room uses NO charts. just order book and time and sales for the stocks he follows! (and the major index future). He is being doing this for 3 years now! I think it says it all! Anyone of you can suggest the essencial reading on the topic, to get the essencial knowledge of it? many thanks in advance