Tape Experts

For those of you out there proficient at tape reading, do you find it easier to interpret the tape for the ES or YM, or any other product for that matter, and why? Does it not make a difference what the product is?

Thanks.

 

Can't really "read" the leading indicator(s) like the E's. Tape reading of stocks is comprised of many things. PREM DISC to Fair Value (E's), depth of NYOB, Pivot points, std deviation move from previous close based on volatilty of stock...not to mention following price movement.

It becomes second nature after a while.

FWIW,

Don

 

Others?

 

ER2 tape tells quite a story imho.

 

Here's a hint: The ES does not always "lead".

 

Different approaches are going to "work" for different people. I witnessed a trader once who watched T & S for the equivalent ETF and seemed to get some useful "leading" information. Although I like the idea of tape reading I've never been able to all that much out myself, and I do a lot of scalping.

Based on my observations ES seems to lead YM more often than not, but certainly not always.

I've traded with DOM/T&S and without, I do better without either. But again obviously that won't apply to every one.

 

After NYSE got hybrid, Don, do you think tap reading becomes much tougher and uncertain?

 

Tape Reading is spotting an aggressive buyer or seller by looking at the price/volume action and recognizing some patterns. It's relevant for listed stocks where specialist/floor brokers still play a role, and one can spot their hands on the tape (even with Hybrid).

You cannot do that in futures where you have thousands participants that can play with size (say 1000+ contracts) just for a couple of ticks profit, and dump the position once index starts going another way. You cannot read it (because there is nothing to read). Size orders and aggressive orders are not the same. It's just a completely different game.

 

Also look at the "speed" of the tape. As prices start to move more rapidly that is usually an indication of volume and expansion and a good move will usually follow.

 

Forgot to mention that at least part of the reason I think I've struggled to gain benefit from tape reading futures and index ETF's is that the color coding of the offers lifted and bids hit isn't always accurate. Back when I was using esignal I asked tech support about the issue but they showed no interest in correcting it. I haven't even bothered asking ensign.