Tape Reading

Discussion in 'Trading' started by luke24.5, Feb 12, 2002.

  1. Instead of reading the tape all day long, a tedious endeavour, try focusing your attention to trades around round numbers (11,20 so on) and around the daily pivots, supports and resistances, as well as yesterdays close, low, and high.
    It seems that most of the juicy stuff happens in those areas.

    Just my two bits

    #11     Feb 14, 2002
  2. pitufo


    Random Walker, you have an excellent point, everyday I get the VB (vertical bar analysis) on my stocks, highs and lows, when the stocks hit these areas I look for something exciting to happen.

    The long quote of 100 years ago pretty much sums up the idea of tape reading.

    I find by focusing in on one or two stocks you can develope a feel for what they should be doing.
    #12     Feb 15, 2002
  3. tape reading is rather easy it just takes a lot of time. You need to just see all the time and sales over and over again.

    When you see big prints do they follow the prices? Are they a step down seller? or a step up buyer?

    Does the specialist like to trade though size?

    When you see lots of green then there is buying

    when you see lots of red there is selling.

    There tends to be resistance at whole #'s , and #'s divisable by 10 and 25

    Robert Tharp
    #13     Feb 15, 2002
  4. Many thanks for your replies. It is very helpfull for my learning how to read tape.
    #14     Feb 15, 2002
  5. seisan


    Concentrated/Succint tape reading info contributed so quickly to this newly started thread.

    Another example why this website indispensible to "determinedtobees"!
    #15     Feb 17, 2002
  6. oneway


    Here are a few of my own insights into tape reading:

    When I used to trade stocks i watched not only the tape but also the L2 and ISLD book. Frankly i dont think you can divorce any of these components.

    The next time a issue puts is putting in a reversal, notice the relatsionship of the best ISLD versus the Best L2. Whichever side the ISLD is on is the side that is running out of gas. Daytraders.

    As to watching TOS and L2 on E-mini, you may find this interesting to read:

    copy of an email:

    Here is an observation I would like to share with you.

    I watch ES TOS (TimeOfSales) like a hawk... Its the last thing I look at when I pull the trigger; in or out.

    While watching TOS, it is apparent that a signifficent majority of volume is carried out with Stop Market Orders (SMO).

    Scenario: SP consolidation break from 1159.00 @ 2:16 PM January 3, 2002.

    She takes out the consolidation high and surges up. The futures pull back and base, there is a pause of sorts, a dynamic equilibrium. Buyers begin to push again, eating contracts on the ask side. As they push they reach across, slowly at first. Heavier now, They trigger the SMO's. Torrents of contracts hit the books knocking it back a layer or two. You can clearly see these prints on TOS. The one order that triggered the stop prints green, followed by a strip of red sales. The sell orders strip out the bid side, then exhaust themselves two or three ticks down. The spread at this moment can be over a point at times.#

    This is a critical moment. How quickly and with what kind of size does the bid backfill? How committed are the buyers to the belief that they own that hole? That void? Do they resieze that portion of the battlefield?

    In our case the equilibrium returns momentarily. New SMO's jockey for position, the bid side recovers to its momentary line in the sand. How was the vacuumed resolved? Who showed weakness? Who showed strength?

    Another surge, the SMO's are triggered again. This is the seminal moment. Did the Sellers come back to the table with equal to or greater size on the SMO? How deep did it hit the book this time? Less or more than the first hit? And on the next hit? Smaller still, the tide gates open and futures surge ahead with an ES overshoot....you pare...sense further strenghth....and the cycle repeats until the larger under lying rythem wearys.

    The ebb and flow of SMO volume and the speed at which side backfills the spread are powerful final entry triggers. Powerful indicators of short term sentiment.

    I see their usefulness as being analogous to a surfer who wants to jump from the rocks. He senses the rythem, times his jump to catch a wave peak. The wave ebbs and carries him clear of the rocks. He paddles out and hopefully catches a great wave.

    One other interesting observation is the interplay of SP and ES. Who is leading who? Is ES more eager to favor the bear SP ticks or the bull SP ticks. How quickly or willing is the ES to follow an SP tick oneway or the other. Does it gap further from SP on one side or the other? How quickly in its exuberance does ES stepover from one side to the other and play leader for a moment? What size do they bring to the table? Did they stepover with more or less volume?

    The character and rhythm of these transactions oscillations is the pulse of the market. It is the market in its purest form. TOS is a window. You can see where the rubber meets the road. For me the immediacy of the sales window is intoxicating.

    If you sit through one cycle before entry, you are in sync.

    #16     Feb 18, 2002
  7. NehabaAshi....Which data provider have you found that does not have "stalls" in their T&S during heavy trading periods. I am currently using QCharts and thinking about changing.
    #17     Feb 18, 2002
  8. it is right, reading the tape is very good skill to get ..
    #18     Feb 19, 2002
  9. thanks a lot oneway.
    #19     Feb 19, 2002