It's very different Fred. Sure, anyone can say they are reading the tape but you can't truly read the buyer and the seller in futures and nasdaq stocks. For example, at the top of my game, I could tell how many buyers and sellers there were in a stock, how much stock they have, how much more they have left, where they are buying and selling and exactly when they are done. This simply cannot be done in futures and nasdaq stocks. At best all you can do is determine relative strength and weakness and perhaps some sort of level where you think there is support and weakness. There is so much information on the tape of listed stocks. It's more then just prints. Where is he bidding, what size, is he the bid getting hit, is it getting hit on an uptick, does the size change, is he showing the same bid, how much stock printed, is it an even or odd number of shares. All this is so important. You simply cannot do this on nasdaq stocks and certainly can't do it with futures.
Actually I'm looking forward to it...we should combine the tape reading of a "single marketplace" with the speed of execution of ARCA. Don
Don - thanks for the reply. your post reminds me of my first week on the floor (options pit). i asked my boss how he (traders) trades. 'whats the process?' was my question - something like that. anyway, he just gave me this real dumb confused look and said 'i dunno, i just do it. its not something you can write a book on (lol), you just pick up the feel.' (he was the biggest trader in the pit - but blew up 3 months later leaving me outta work) sure trading is an intuitive process - like driving a car/riding a bike etc. we move from a conscious attempt to competently doing it without thought. perhaps thats why journals are supposed to be so useful - witting out the thoughts, observations etc puts it into the brain. just like verbalizing stuff as you mention, or even posting on et!! so i see where youre coming from & agree. although i dont use the tape, i can see where you are coming from - i read the bars on a chart in perhaps a similar intuitive way. eg load of volume on a bar going through yesterdays low could either mean continuation if the volume is strong, or a reversal if there is too much - climax or exhaustion. you get the idea. mav74 - sure transparency at the exchange can be a good and bad thing for both sides of the trade - youve made me realize that if i have understood you correctly. i can understand the issues you are talking about i think: youre basically saying that on nyse its specialist v everyone (one - many) where as futures/nasdaq its everyone v everyone (many - many) so keeping an eye on the specialist is the key & understanding his motives i used to do ok when i used to trade nasdaq stocks. id use the tape with 5 min volume chart and wait for it all to line up. in the pit we would look at related markets print (on overhead screens) and play follow up. using a net position of the market as a whole (ie the market is rushing for the doors, time to......) can still be valuable i think, and does go nicely with the kiss approach. cheers.
Good comments, Mr. Bloggs! And, yeah, you bring back "fond" memories of my first weeks on the options floor.... Don: "Hi guys" Pit "leader": What the $%^#$ do you think you're doing in MY pit? Don: "Uh" - I thought I would like to trade HLT (Hilton). Pit: "Tough $%%^ - get out" Don: "Uh, how come" ? Pit: silence... Next day: silence... Finally - I started changing prices myself (so that I could be "first" with open outcry).....other guys were pissed off, asked to "share" - I pouted a bit...and then started to "get along" .... A year later...some new guy comes into MY pit.... I ask: " What the F$%%^ are you doing in MY pit" ? And so on, and so on, etc. LOL Don
Sure... go ahead, Don. Give away the farm; why don't you? This is basically what I do with futures traders in my group as well. We also discuss levels across various markets, etc. I have to warn those who intend to pursue this as a way to trade on a retail account: It takes a lot of time to get a feel for this in your product/market. It also requires consistent focus and a sense of "where we were adn where are we now?" This can be costly for the average retail trader to do this. I'm not trying to glorify it or make it exclusive. I'm simply saying that it takes time in front of the computer and money to test the waters and see for yourself. Also, you need a good data feed and a good T&S window that is clear on what prints went off at what prices.
Most of what we teach can't be done in a standard retail account, as you well know. "Level I" is not enough, "Level II" became worthless when they gave it the retail public for free 10 years ago, and it takes several solid data feeds to feel comfortable (at least to make me feel comfortable). All the best, Don
Wow, this was very insightful. I never realized this until today when I read this. Thank you VERY, VERY much. I'm going to go back through the stock I normally trade and see if I can find this phenomenon.
Fatrat, I'm going to give you an example and gift in the same chart. Mav, Correct me if I am wrong, but I think this type of action is what you are referring to? Regards, Mike