Thanks, but that's undeserved. I've been limiting myself to intraday analysis of price and volume (except for those two charts of the Naz that I posted yesterday, the monthly and weekly) because the volume is so variable. If you try to analyze price and volume using a daily chart, there's so little difference in the volumes that the "analysis" becomes almost fanciful. Weekly and monthly volume differences show up much better. But in no way is that tape reading. This is not to say that understanding the relationship of price and volume is not essential to tape reading, but other sources will probably be of much greater benefit, at least for getting one's feet wet. One is the "Rollo Tape" (Wyckoff) book you've mentioned. Wyckoff wrote another tape reading book as well, but I don't have it in a form that I can transmit. The others are the Humphrey Neill book Tape Reading and Market Tactics and the Graifer book Techniques of Tape Reading. Unfortunately, that's about it. But, on the other hand, there's not a whole lot to say. You have to understand the principle of demand and supply and you have to understand the relationship between price and volume. But then you just have to spend a lot of time following the market action, tick by tick, bar by bar. And I mean a LOT of time. Just don't waste your money on anything having to do with Time and Sales or with Level II, both of which are only tangentially related to tape reading.
You won't find it anywhere on this site. All I can say to you is: Open your eyes and WATCH CAREFULLY. Don't trade the ES, just watch it. Form a theory, and try it small. BTW, you will need the DOM. nitro
I really like time and sales, I find it very complimentary to the price and volume analysis. But the key is, I turn off all the info except the trade size and price. Trades at the ask are green and trades at the bid are red. Another key is I have two of these side by side, one with trades over 45 ctcs only, the other with everything.
The only problem is that T&S doesn't have everything. The price and volume bars are the only measures that are true. But to each his own.
Sometimes you can see the little lots move one way but the big lots are moving it the other way. I also like to see new highs or lows made with the big lots, not the little ones.
BS Ratio 4 trades* x 3 pts risk = 12 pts total MFE (max 6 pts per trade) = 15 BS ratio = MFE / risk = 1.25 (good) where 1 = stupid Great ambush entries today! For 5 pts risk BS ratio = 0.93 = not worth it. So this reiterates what I already know and practice: initial emergency stop of 5 pts Exits Total possible MFE (no longer limited to 2x risk) 18.5 pts. I got 12.5. -20 <----------------0----------12.5-----> +18.5 As a % of possible points, (12.5+20)/[18.5- (-20)] = 84% 100% means you closed every trade for the max possible gain. 0% means you waited till it hit your initial stop every time for a loss. Is there a name for this? I don't see how I can top "BS Ratio".
Here are my trades from today. I lasted until lunch time with my 5x limit. Basically i'm a trade addict. For the motivation behind each trade, see DB's comments on the chart he posted today. I held off buying the pivot because at the time I believed the failure at 72 was death sentence and we'd never make it back up there. If you think any of these entries are stupid i'd like to hear about it.
I would classify my performance today as "dicked the dog". Managed to eek out +3.5 however. Trades attached Trade 1: took a bite, perhaps a little too tight on the exit. I was nervous. Trade 2: A good ambush, the run up was on inc. volume, sell off on decreasing volume. Great exit, the following next run up was on low volume, a danger signal. Trades 3-4: I'm thinking, hey, this selloff is on decreasing vol., gotta ambush the next pause and go long. Trade 2 should have been a warning. Also, in hindsight, I should have been in the less aggressive "revesal mode" when looking for longs at that point, since we had just put in a lower high. Instead I remained in the very aggressive "pullback mode" (fine for trade 1, not here tho). Trade 5: A mistake out of frustration, sought exit immediately. Trade 6: Finally a higher low, after a price/vol divergence on the 5 min. Go Long Baby. However, the run up was on low vol, not very impressive, so I exited as soon as we got to the top of yesterday's afternoon trading range. looks like a great exit so far.