Reading the tape

Discussion in 'Technical Analysis' started by mjbmedia, Feb 2, 2011.

  1. mjbmedia


    on your charts you have the time and sales windows which are the tape. So looking at it, the main things it shows the volume the bid price and size and ask price and size
    so how do you read it to give you the information you seek.
    Its a bit confusing to me having just seen it and i get confused re the buy /ask meanings within the time and sales window.
    Can someone please explain what each column I mentioned above means .
    also some entries show red others green i presume the red are sell orders
  2. There is a lot more to it then that... You need level 2, what you are describing is the prints (which some consider the tape, but I need level 2 also and incorporate it into the prints). Red print = Bid, Green print = Offer, White = in between bid/offer...

    I have spend about 2 years learning how to read orderflow and pride myself of being able to just trade off of Level 2 if I needed too, but of course I use charts also. Reading the tape is really good the first 30mins of the day (I rarely look at charts on the open) with In Play stocks, after that its not as great, unless you can read the programs and know how to trade them in your favor, otherwise you might get wicked out of your position. I would recommend using a screen recording program and record the open and close and watch them back and see if you can see what patterns emerge. It will take time, but you will also have to be in the right stocks to take advantage of what the tape has to offer.. Good Luck.
  3. mjbmedia


    thanks , however for now I want to understand the columns 'volume, bid price, bid size, ask price, ask size' and what they really mean in relation to each other .
    No secrets just what i dont get is if its shown as :-

    price 1.3777 volume 10 bid trade bid price 1.3777 bid size 45 ask price 1.3778 ask size 170

    can you run through what they each mean
  4. A trade happened at the bid price of 1.3777 for 10 contracts.
    The current best/highest buy limit order is 1.3777 with a total available published size at that price of 45 contracts.
    The current best/lowest sell limit order is 1.3778 with a total available published size of 170 contracts.

    Green/Red mean different things for different vendors. Sometimes it reflects whether the bid/ask was taken. Sometimes it refers to whether the colored quantity is increasing or decreasing. If you watch for a few seconds, I am sure that you will figure it out.
  5. You mean In Play?
  6. Screen recording is a good idea. The main drawback that I see is that you can't tweak your indicators and try again. Some platforms offer replay so that you can hone your skills before risking any money.
  7. If you want to really learn "tape reading"...get a screen recorder that records your time & sales window, bid/ask info and price chart. Record every trading day and study everything you record.

    I know several guys with about 5 years of recording archives (stored on DVDs) because the few data providers that offer data replay only does such no more than a months worth of archives. This allows them to review and study any trading day in the past 5 years.

    Simply, you're going to have to build your own archives for study and anything you have questions...just copy out a piece of the recording and then upload it to any free video host site (several on twitter) and then ask your questions after you show people exactly what you're talking about.

    This is much more efficient in comparison to posting questions at a discussion forum where you do not show exactly what's occurring in the price action at a specific time of the trading day. Thus, you aren't going to learn how to profitably trade via tape reading without the video recordings to use as reference areas.

  8. From what you have been saying it sounds like you don't have access to a level 2. If you don't have access then the answers given to you will be quite confusing. Get access to a level 2 first!

    Reading the tape for me encompases watching the level 2 inconjunction with the time&sales (the actual tape). Like anything it's easy to understand the basics but being able to make $$$ from it is a lot harder and involves spending hours and hours watching it every day!!
  9. mjbmedia


    thanks for all the replies, really appreciated.
    I looking to use the tape as a confirmation when other things line up and also to help determine when to come out of trades or tighten stops ie if some big orders have gone in against my direction then I will think differently to if those big orders are in my direction.
    Now whats confusing me is if its a bid order (shown red on my time and sales which suggests shorting or selling) going through on the tape, is that trying to buy or sell, push the market up or down as on the dome the bid side is for going up (buying)
  10. You need to show a screen capture image showing all the bid/ask action leading up to this specific point in time on your times & sales or show a screen capture video recording that represents price action prior to that specific point in time and price action after that specific point in time.

    It only takes a few minutes or so to post an image or brief duration of a video recording as a file attachment to your message post or link to a free hosting source.

    Thus, the next time you see this...capture the image and repost your question with that image or do the same with a quick video.

    For screen video recording (primary way to discuss time & sales action), you can use something like or and there's many others out there for free that doesn't require you to pay for any special screen recording software nor equipment.

    For screen image capture (secondary way to discuss times & sales action), you can use any default image capture program on your computer (almost all computers comes with at least one program) or you can use something like snagit @ and there's a free trial.

    By the way, I have no affiliation with the above links but I'm a happy user of them for personal and business reasons.

    #10     Feb 3, 2011