Attached is what I've been using to determine "what is likely" vs. "unlikely" to happen. My point of reference for the market is the pivot points. The zones for "open" and "close" are: A: above pivot, below R1 B: between R1 and R2 C: above R2 X: below pivot, above S1 Y: between S1 and S2 Z: below S2
I am a newbie. Things I have not yet experienced: (1) Doing everything right, and losing a lot of money. (2) A mistake or computer error, beyond my control, which leads to losing a lot of money. (3) Becoming irrational an losing "x" months... or worse, years.. of profit in one day I have read stories about these things. What can I do? (1) Keep it simple. (2) Have backup and contingency plans. The most troublesome one is (3). It's easy to say "I will control myself". But the problem is, it's like walking a tight rope. After you realize your mistake it's too late!
Just got "Studies in Tape Reading" by "Rollo Tape" written in 1910. I can't believe it's almost 100 years old and still holds true in most places... "If you can trade with only a small average loss per day, or come out even, you are rapidly getting there." "The tape reader evolves himself into an automaton which takes note of a situation, weighs it, decides upon a course and gives an order. There is no quickening of the pulse, no nerves, no hopes or fears. The result produces neither elation nor depression. There is equanimity before, during and after the trade." "He must have the nerve to stand a series of losses; persistence to keep him at the work during adverse periods; self control to avoid overtrading; a phlegmatic disposition to ballast and balance him at all times." And finally, one for us ambush fans: "Money is made in tape reading by anticipating what is coming-- not by waiting till it happens and going with the crowd."
Thanks Peter for the excellent quotes from" Studies in Tape Reading" by Rollo Tape. Do this studie give tips to enhance tape reading skills and if so how can one obtain a copy?
I got mine from amazon.com, it's under $20. Whether it helps or not depends on the person reading it. So far, for me, it's mosty the same stuff I've read everywhere else, but amusing to get the 1910 perspective. Only about 10% through the book though. Most people agree, if you want to learn to tape read, you just have to watch the tape for a very long time. I watch the price and size traded, no need for me to watch bid and ask with the NQ. I guess I am watching the order flow.
Well it's now clear from the book: the day traders of 1910 were known as tape readers. This little book is about day trading and boy is it a gem. I love it because i'm reading stuff that took me over a year to figure out. Here's another sample: You know what, if one of these 1910 day traders were around today he could whoop some major ass. Another point, last week I realized all my "trading books" were books about indicators (thanks db!), even though I have long since dumped indicators. I thought trading books were a waste of time... I was reading the wrong books!
before you dismiss all indicators as being useless, i suggest you take a look at the chaikin oscillator and check for yourself if it can provide you with as much usefull info as watching the tape. I think you will find it pretty accurate when you 're aiming for intraday swings, scalpers might come to another conclusion
Roger that, I have seen the Chaiken Osc. in action in NPP's method. I also know a few pros who use this and other indicators (even the stochastic). But I say there is more useful information about the art of trading in this little 1910 book then the big, fat, Murphy's Technical Analysis book collecting dust on my shelf.
I second your last remark, i've read it too. However, i don't think, that making a living of tape reading NQ/Es provides more opportunity or is easier than trading NQ/ES based on indicators. If you limit yourself to tape reading you exclude a lot of tools, that have been developed since the early days and can make life easier for you. Just my opinion.