Just for clarification purposes and in connection with my prior post, are you guys suggesting that tape reading can effectively be used to trade the indexes? I see that you are predominantly referring to stocks in your posts. The reason I ask is that the "tape" moves so quickly in ES that I personally cannot imagine being able to analyze it coherently for this market. Please advise.
Although many people here will argue with me, the only tape that can be read in my opinion is the specialist on NYSE listed stocks. I could read those guys so well I could tell you what they had for breakfast and I could tell you the exact time they went on lunch break and their clerks were running the books.
Hi Maverick74, Will your technique of watching the T & S of stocks work with Index Futures too? Seems like you can use it on most everything except the Forex market. Thanks
what he said, be really really familiar with stock/index you want to daytrade, see it in is various time frame 1,2,3,4,5m 55,110,330tick, 150,300,450v, find something that will keep repeating day after day, some pattern, some set up that keep happening, keep document it until you are certain that it will do what you already know it will do, etc..etc..
TR (tape reading) most accurately applies to stock trading, to a lesser degree it also applies to just about any volume based transaction equation. One can watch pattern flow or traffic patterns or commuters at one of the busiest transfer points and derive the same conclusions as one would in watching a stock. HOWEVER, when dealing with basket stocks, then the pattern analysis does not apply as well and as accurately as with the individual entity or equity. For example, take the subways of NYC. At one of the busiest stations the flood of people getting off the train in the morning varies with waves of arriving trains. Those trains are the baskets of stocks that your example applies to, hence you would need to watch train traffic from a controllers position instead of watching people in wave patterns as they exit trains. I hope you understand the illustration.
I watch a variation of T&S on index futures using www.marketdelta.com I use MP, and I watch for flashers on the DOM (fake bids and offers compared to actual T&S). I have never had an osccilator/indicator or any moving average on my index futures chart. I did use indicators when I was trading stocks, but I dont plan on going back to that as my current trading is much more consistent. IMHO, be wary of advice from people who post prolifically during market hours beacuse if they were really good they wouldn't bother with ET while working. 2) Be wary of posters who get hot headed and/or overly emotionally in their posts because succesful traders are typically not defensive.
A guy that makes rebound scores isn't as worthy as one who makes 3 pointers? Sure, it may not be as impressive....but ONLY the TOTAL SCORE wins the game. I hear what your sayin', though, Mav--trading for .01 and/or rebate, is a bit extreme...but it does give them some experience to start. Hmmmm....."happy". There are trade offs with all types of trades. Nothin' like knockin' down $3/sh on 10kSH in a day, but all trades have various intensity. Scalping, I'd say, has the highest burnout factor & highest concentrated intensity--even if it's likely a lower risk profile.