I'm trying to get it, but what has it actually to do with the tape? Like I draw bars with marks about its volumes with regard to info in the tape and in such a manner I learn the patterns? Or what?
Thought you were out of here? If you want to make some money, Trading and Exchanges by Harris. Probably too thick if substance for the ahad adolescents whom know it all.
Looking at description of this book it looks like it's about general market structure and its interconnections. You mean it has the info about how to approach to understanding of tape reading?
To learn a language one starts with an alphabet. Having an alphabet, then form words to build a vocabulary, then syntax, grammar, and sentence structure. Then concepts can be understood unique to that specific language. The market has untranslatable words and concepts inaccessible without doing the fundamental prerequisites. It’s a fairly common trait in any profession. To ‘see’ a market requires more than Nison’s candlestick catalog and looking for ‘setups’ The market is more a constant stream of opportunity that requires focus and steering to be in and to be on the ‘right’ side. Learning how to really read a tape keeps one on the right side which for the monitoring the fastest fractal in a liquid instrument like the ES 5m with current volatility is between 30-40 trades during RTH Market data is seamless and continuous which requires building facility and capacity to process on a discretionary level. But if the preschool caricatures are more appealing, by all means listen to them.
To clarify, my comment was for the previous poser. To answer your question, and using a metaphor, it’s more like understanding the basic navigation rules at sea than the specific mechanics of sailing. One approaches the market’s as a hobby or a profession, each path will require different scales of effort as well as receiving scales of reward.
Thanks for the book. But going back to our topic, I'm just want to find an approach to tape understanding, lets call it mechanics. Can you please elaborate on the "drill" or your main idea is "just learn markets"?
I’ve done my due diligence, my posting a 5m chart snippet and write up would have limited usefulness with the current level of distinctions on the table. It’ll sound like a foreign language. It’ll also just be the chart and not what I sweep through at specific moments on my trading platform which has a DOM ladder, OTR charts and T&S streams. I don’t have market replay so the above information is encapsulated in a chart and log which I archive. There’s a majority interpretation that reading a tape is observing the ‘games’ being played on the DOM ladder while also being aware of the actual trades in the T&S stream. Upon closer examination, actual trades are not the primary activity on the DOM, what can be seen is the dynamic pulling and stacking of limit orders on the book, which from one perspective is the ‘feign.’ What is generally unseen is the replenishment of limit orders facing market orders on the inside spread as well as new market orders entering the top of the queue This is where an imbalance causes price to move. What moves price is time urgency with the motivation of one of the 35ish trader types outlined by Harris whom participate in continuous dual auction regulated markets. Each of these trader types have different levels of buying power, risk tolerance, trade horizons and frequency, etc. and thus enter the market at various events based upon distinct motivations. A minority orientation in reading a tape distinguishes the difference in sentiment as it is expressed in what is called Dominant and non-Dominant volume. The easiest way to distinguish this is through a graphical display on a discretionary level simply due to how our physical senses process stimuli. Our eyes filter perception through beliefs through the sensing operators of space, shape and movement to derive meaning. This is worthy of repeating, beliefs filter perception. This is why anyone from their point of view are speaking their truth. It’s also why beliefs when first adopted as a way of efficacy to process information -simultaneously create limitations on perceiving all the information that is present. This brings us to the utility of drills by processing market information in it’s basic granularity. The goal is to increase one’s ‘spectrum of differentiation.’ In other words, having more words to describe more perception. Drills alter perception bringing what was previously unseen into conscious awareness. That’s the function of the first drill in identifying parts of a bar and bar types. After analyzing a single bar, bars form in specific sequences as one adds bars to form what others might call patterns, however as others are looking at price, The method is processing the independent variable that price is dependent upon. It’s one of the leading indicators of price which to the dismay of folks burdened by fossilized beliefs doesn’t exist nor is possible. There is but one essential ‘pattern’ that governs all trends. It is composed of 3 moves of price coupled with 4 volume elements. The market is symmetrical and this pattern repeats itself switching operating points from long to short to long to short, etc. This can be distilling to interpreting all market information as signals of continue or that of change. It is context dependent and can be decoupled from time. By doing so, then the market operates via a repeating Order Of Events. All observable to an astute open mind willing to think and do the work. To those with fossilized beliefs and minds everything I said sounds like gibberish and stimulates an emotional response of negativity. To avoid the predictable braying of trolls, I recommend going into the journal section where one can keep the signal-to-noise manageable then out here in the general forum.
Tape reading is still alive. The market is random most of the time and when it isn't, the tape has useful information.