To me "read the tape" means observe the series of price quotes for a particular security as quotes appear on the tape. Today I do not have a paper tape so I might watch price quotes on my computer. There are lots of different ways to trade using the price quotes as they appear on the ticker tape. Each trader might have his / her individual trading style. Some traders might buy the moment they observe new historic record high prices appearing on the tape.
There are a couple of ways to do it. I am learning by watching price and volume. Consider getting Techniques of Tape Reading by Graifer and Schumacher. You can also read tape by watching price action and time and sales. These are the 2 best ways I know. Look up Richard Wyckoff he was the master of tape reading. Good luck. Look up this thread starting on pg 696 I believe http://elitetrader.com/vb/showthread.php?s=&threadid=99283&perpage=6&pagenumber=696
VSTScalper had some great post's here at ET about tape reading and data measurements for the index futures (ACV ratio's), but he has not been around lately and I was told that he was a no-show at the Las Vegas Online Trade Expo...hope he is OK and doing good!
Tape is just the T&S ticker. Watch these helpful videos: http://www.puretick.com/video/tape http://www.puretick.com/video/neutral
Try these for starters... http://www.hardrightedge.com/wizard/rt1.htm http://www.traderslog.com/tape-reading.htm