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NYSE Tape Readers

  1. I'm looking to meet any NYSE tape readers who are out there trading alone or in a small group and making money. I am trying to create a small group of traders who will communicate ideas via Skype during the trading day. I am not asking for signals. I am an experienced tape reader and know a few others, however I'd like to re-create as much of the experience of trading in a room as is possible. If you're successful and skeptical of my ability to provide value to your trading, I will prove my worth in real time.
     
  2. I think you're at least a couple years late.
     
  3. Are you implying that the time and sales, combined with the LII+open book doesn't provide useful information that can constitute an edge?

    Its a little more complicated than using a bullet to front run a market short, looking at a cross and seeing where the specialist prints it and trading with him, or looking at imbalances... but tape reading is still alive and useful. The cheating order-pulling algos and conned liquidity situation don't change the tape's fundamental representation of fear and greed. As long as thin stocks exist intraday liquidity squeezes exist, tape reading will be work.

    If everyone who just bought the refreshing arca at 59.80 showing 100 shares and refreshing for over 5000 is leaning on one big 8000 share bid at 59.75, and it gets pulled, and Im the first to hit the 800 shares 2 cents beneath that at 59.73, with no bid behind that in the book or level II for 40 cents, and a 2300 share offer on NYS at 59.83, there's a higher probability that Ill make 70 cents on the 800 shares than it is that I'll miss the .83 and get squeezed to an average price of .94 for a 20 cent loss; most likely Ill bid down 30 or 40 or 50 cents and get filled from a panic market order, even if other liquidity comes in to fill the gap soon after. Trading like that is timeless.

    It seems all the tape readers who are skilled enough to make it in the hybrid market are totally independent.
     
  4. Do you have any good links for tape reading, particularly for trading ES? I'm trying to improve my skills.
     
  5. Pure observation.

    I do not know anything about how people consistently make money tape reading the ES, nor any website that will color your judgment of that trading instrument in such a way that will allow you to be profitable. However, I do recommend you start out with a smaller market first and learn to tape-read that. The people trading the ES are the smartest, most competive human beings on the planet. Therefore the tape of that instrument is full of all of those people trying to trick each other into buying and selling at the wrong times. If you observe a simpler stock, where there are fewer people competing over the money in it, your chances of finding an edge with less work are higher. It's much easier to detect a buy or sell program that is going to move the market in something that's thinly traded than in something extremely liquid.

    Tape reading is basic stuff. Feel the market, sit there and see what people are doing, and feeling, and react. Only your experience doing that can help you become a better trader. What should you look at? The prints, and book. Study that. You'll see patterns or you won't...

    The hardest part isn't the tape-reading. The hardest part is dealing with the emotions.
     
  6. Oh really?

    So if you're so smart, why are you asking for NYSE Tape Readers and not Tape Readers in general.

    Having much success with tapereading Nasdaq stocks? Cause there is not much difference from NYSE anymore. How about tapereading S&P futs, give it a try.

    It's not the strategy it used to be, in fact, it's not even a strategy anymore, just a helpful tool which gives confirmations here and there. It's actually simplified from the old school tapereading, since there is so much noise and pointless prints.

    The example you provide is likely to end in a churn. While you think you are smart by shorting against the big bid, often you are the fool because the 100 share refresher seller can be a small order and the big bid attracts a lot of shorters. The strategy is old, I used to exploit back in 2003-2004 since so many daytraders were trained to lean on big bids that wouldn't move.
    Most likely, there is nothing there anyway, just a churning share exchange. Order flow is fragmented, creating many variables and often creating illusions about some situation which is not even there. Just noise.
     
  7. Wow, sometimes I wonder if ET breeds @holes or if it just attracts them. :p
     
  8. He's absolutely correct. And now with the specialist able to have hidden reserve behind 100 size, it's even more distorted.
     
  9. Even an @hole who's right is still an @hole. ;) If the OP makes money this way who is someone to tell him its not a strategy. And I think most grew out of "if you're so smart..." by the 6th grade, or maybe the 8th for slower developed kids. :D

    More power to the OP if he can use the tape to his advantage.
     
  10. I wonder if you will ever get the IRONY behind your initial post in this thread. Let alone actually contribute anything to the thread besides insults.

    P.S. You seem very sensitive, does that come with old age?
     
  11. Um, so? Reserve orders on ECNs have only had to show 100 for years, so I don't understand what the big deal is.

    When I saw this thread, I was tempted to chime in and speak... but as long as you guys think that tape reading is dead, you won't try to compete with me for fills. How can analyzing supply/demand through the prints ever die? That's like saying charting doesnt work! While I've read both your and Hydroblunt's posts and you guys seem observant and intelligent, you guys must be missing something... the market being saturated with idiot boxes and not having a specialist to fuck you on your fills doesn't change fundamental supply/demand and market feel/rhythm... to assume that because you guys (if you were ever tapereaders) can't adapt that others can't is incredibly hubristic...

    FXWill I sent you a PM...
     
  12. I made a very simple argument, if you think Tape Reading alive & well, then why is the focus on NYSE? Go taperead Nasdaq stocks or S&P futs. It is possible, I won't deny it, but nowhere to the extent of what NYSE tape reading was, when it was a strategy by itself, to the point where you did not even need charts, just Time & Sales. And while relatively simple in itself, it was not a monkey strategy or hitting bids with bullets, it was pure tapereading as is described in "Reminiscences of a Stock Operator".

    Going electronic toward fragmented order flow took away a lot of tape reading's power. It is no longer a strategy but really a tool. What started happening on Nasdaq years back is that a buyer would randomly mix up his routes for execution, hence creating noise. That's what the institutions started paying Goldman & rest big bucks for, order execution algos. The situations created had multiple variables, hence more uncertainty, hence higher risk for the same reward.

    And if you are still stuck on NYSE, because you feel the specialist still has some edge and gives a certain indication by staying on the right side, I suggest you keep up with current events. Even NYSE Hybrid is going out the window, it's going 100% electronic, just like Nasdaq.
     
  13. I agree that the NYSE and NASDAQ are essentailly the same, however I am not as familiar with all the buy and sell programs in NASDAQ stocks (some I am) as I am in NYSE stocks. It's not that I think staying on the right side of the specialist is an edge anymore. I am 100% up to date on all events. This is my business, without it I could not maintain my lifestyle and would have to go get a real job.

    I think the fragmentation of order flow is only an annoyance in certain situations. Even fragmented, a large order in an illiquid market has a limit on how discreetly it can be executed.

    I started trading right with the advent of the hybrid market, and am one of the few profitable scalpers I know. I guess I missed the easy days, so I don't have perspective, but I can trade without charts, with just a book and time and sales, and make money 15 out of 20 days from recognizing orders being worked...

    I'd be willing to send you my runs from the past few weeks to discuss specific setups, so long as you agree not to send them elsewhere (though anyone who's smart enough to go through all my runs, look at the time and sales, and figure out my edge enough to actually take my fills... is probably already making money and successful anyway).
     
  14. Tapereading as high art is dead.

    However scrawls that are weighted by volume can prove useful when you spot a stock you haven't seen get action in a long time suddenly show up, even with a small gain. It's worth pursuing the research. I've done unscientific studies in which removed from a computer I tried to come up with investments simply studding the Bloomberg or CNBC ticker, I found it very easy to scalp daily but LT didn't get anywhere.....

    I live in NYC but don't do Skype, if you ever want to throw an idea or two my way feel free to do so, I'm always willing to share as well.

    Just by tapereading I would buy CKSW today but based on The Fed and my research and need to get back weighted in the financials... I most likely will go with Discover Card DFS. ~ stoney
     
  15. I take this back. I watched more NASDAQ stocks today than I have in the past and it's the same shit. NASDAQ is as easy or difficult to trade and tape read as NY.
     
  16. Teach me to think about the market from a longer term and I'll show you my trades in real time and give you runs and answer questions about setups.
     
  17. i actually agree with granpa. the group i'm in trades many styles and tape reading is one of them. it's an entirely diff art now and most veterans who used to make a living doing it are unable to now. however, we do make money doing it. the naysayers are the ones who either have no experience or have failed in it with the current market conditions.
     
  18. Bingo.

    If you want to discuss strats or whatever in a fully mutually beneficial way (i.e. I don't need to but I like to learn from others, I'm not like the desperate leeches that unfortuantely are 98% of ET) PM me.
     
  19. I have no problems sharing with you. I will PM you when I get a chance.
     
  20. Some of the "naysayers", as you call them, saw the signs and knew it was time to exit the industry and move on to better opportunities, while they still had the financial flexibility to do so. Many tried to hold on, in denial, just to find themselves searching for another job and exiting trading, because they were unwilling to accept the inevitable when the signs were in the air. And then a minority were able to adapt, but still, it's nothing like it used to be.

    Tapereading nowdays is as much of a strategy as reading charts is. There is no real edge.
     
  21. 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.
     
  22. Fx


    i will send pm
     
  23. 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?
     
  24. 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. :)
     
  25. 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 :)

     
  26. fair enough. I haven't studied them too much. I imagine they create a certain pattern in order flow. I claim ignorance.
     
  27. bingo

     
  28. 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.
     
  29. 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
     
  30. Thats a good answer, thank you. I will dig into it some more. Good trading.
     
  31. Alas, I guess longer term is all in the mind of the holder. For me it used to be 2 top 5 years now I'm very lucky to make it the full year for the lower taxes. I hardly ever do. A function of that has been the market. A function of that has been me.

    As long as you are patient and willing to watch and track something for a week or two you can become familiar with any stock's trading pattern weather that is tape reading of charting is just semantics... the problem with both approaches for me is first day the damn thing breaks out with volume I am instantly looking for a low volume retrace and I'm in there... often too early. In fact tape reading leads top soooo many false break outs--this is mostly due to the skewed after and pre market quotes I feel. So I'd like to throw into this argument the idea that classic tape reading died officially when the extra hours of trading was introduced.

    Most versions of tape reading now are just scalps... is anyone really buying new lows off tape reads????

    I think I study the tape scrawls more than most, but when you get in a 4 Horsemen Mentality with just a few tech stocks going to the moon... what does it mean that BIDU is up $15?

    However order flow is order flow and if you were on your game you would of noticed Citygroups spike in buy orders in the last five minutes of Friday and gotten in. I just missed and backed away in the post trade as the stk settled back to only up 36 cents... big mistake?
    Probably I don't see how this whole sector doesn't do a three day soar next week. Will I be chasing? No. Will I be Tape Reading? I guess so even if I don't want to the info will be there.

    In general just staying upon sector rotations and big institutional buying will serve you fine & if you happen to locate and sexy stock that the market makers bring up and down a couple bucks all the time-- by all means go in and out of it to your hearts content-- It does get so confusing at tax time though... stoney