Tape Reading vs Price/Volume

Discussion in 'Trading' started by qll, Feb 20, 2007.

  1. qll


    Is that possible to have historic Level2. Historic Level1, Historic CurrentTradeSize so tape reading can be backtested?

    Most backfill only has price/volume/time.

    Another questions is how much better for tape reading vs backfill?
    I found it is much easier to detect the big shark's move by reading the tapes rather than looking at the historic price/voluem info.
  2. This is trading style and/or strategy specific.

    Simply, your specific strategy is more suitable for tape reading.

    In comparison, someone else using a completely different strategy may find price/volume more suitable.

  3. I think of tape-reading as a style of trading to catch swings of price vs. catching major trend (true speculation as Livermore called it).

    So personally for me reading price/volume charts and even indicators, especially intraday, to catch price swings is a form of tape reading (of course I know it's not a true tape-reading, but IMHO the purpose is the same). BTW I'm quite happy with this "tape-reading" style and wouldn't say I need anything else. Of course I look at Bid/Ask and Last size and consider them sometimes, but occasionally more than intentionally, simply because it's in front of my eyes on trading platform. :)
  4. qll


    I should ask the question is purely for intraday trading cases.

    I have found that tape-reading is almost useless for long term investment, because no matter how good the smartmoney want to hide in tape, sooner or later price/volume will reflect its true action.

    So, let me reask this question: Is tape-reading better for scalping? or price/volume is enough for scalping?
  5. Tape reading, as I define it, is "all encompassing" and includes too many variables to be back tested. Just for starters, it's hard to backtest the PREM/DISC to Fair Value at the time of Price Volume action vs. the Peer and the Sector and the overall Market vs. the commodity of the sector related and the depth of the book, and where the futures sit on a self calibrating tick chart, etc.