Time and Sales - Tape Reading..

Discussion in 'Trading' started by Riesgo2002, May 29, 2002.

  1. Threei


    True. Statistics count into "science" part, although don't exhaust it, IMO. And luck plays certain role, too, especially for undercapitalized trader, in order not to run into losing cluster that kills his capital before the law of big numbers takes over.

    All you listed has its place, I am just not sure what was it you disagreed with :)

    #11     May 29, 2002
  2. lundy


    just not the art part. i think the proper word would have been intuition.... and intuition is a part of science (the brain computes things mathematically but we can't explain it, so we call it intuition).

    Science of the markets is really just statistics..... any technique works and fails a certain number of times...

    So you bet on statistics.... pretty good odds... luck determines if u make it or not.

    So i say statistics and luck...

    or you can say science and luck...

    but where does art fit in? unless you hand draw charts? :p
    #12     May 29, 2002
  3. Threei


    Well, IMO, art side takes its place in any activity where one applies his personality, his individual perception and vision, as opposite to strictly determined procedure/algorithm.

    In trading, there is clear presence of impact of personality. The same setup can be played by different traders differently. One is going to look to trade the setup itself, another will be looking for signs of setup failure to fade it, third would wait for retest to see if former reistance works as new support, etc etc. I mean, give the same stone to different sculptors, you get different pieces of art, right? The same with trading...

    #13     May 29, 2002
  4. lundy


    science is factual... trading is interpretation of facts... when these facts coincide, this happens 9 out of 10 times....

    so really, it's just statistics and luck. :cool:
    #14     May 29, 2002
  5. lundy


    looking at it like that, you are right.
    #15     May 29, 2002
  6. Ken_DTU


    Excellent point.. good insights re how different traders trade different setups..

    I find that the "personal preference re timeframe" that traders have plays into it, eg if you're like me and "anything over 15 minutes in the trade feels too long", then that chart setup will be played differently, from say an intraday 1-3 hour timeframe trader, or overnight hold type trader..

    main thing, is to have your rules defined ahead of time.. esp. risk mgmt and trailing stops, when to exit/ fade it, partial position entries/exits, timing and the rest..

    re science and art: fwiw I was a statistician for Ford, advanced data analysis, it was somewhat helpful to trading in that you learn to identify in control/out of control, eg outlier breakouts in data patterns... But, what I've personally found to be much more important, is timing and risk mgmt..

    good thread... time & sales is essential, again that's your final go/no go signal, I put what the tapes' doing in context of the TRINQ/chart patterns for breakouts vs intraday chop etc..

    trade on,

    #16     May 29, 2002
  7. the best way to do tape reading is to select a NASD stock, and get to know its trading pattern and chart situation. Then open a Level II window (15 to 20 levels/rows deep), and an associated T&S window of same depth.

    watch the chart in 1min/2min candle; watch the Level 2 and T&S window. See which one updates first, for your Marketdata vendor. See which leads the other. See which lags the other. Notice the patterns of flush buying/flush selling (programs running through). See the pattern of "players", namely market makers and daytraders through the major ECN's. You will notice those who maintain a Bid and Ask just below the activity level. You will also notice individual traders that post, play, execute and flip. Most traders running at $.01 commission need between $.04 and $.05 just to break even for the ticket costs and so forth.

    This is your first lesson in tape reading.
    #17     May 29, 2002
  8. A very experienced trader called DeeMan posted a great synopsis of tape reading back in December '01. Sorry, don't have a link.
    #18     May 29, 2002
  9. right. I think Wyckoff is the guy whose book you want. I'm looking for it myself.
    #19     May 29, 2002
  10. The best way I have found for using time and sales is to use a filter on it. QCharts for example offers this. What I do is is filter out all trades under 5,000 shares. Some high flyers I set it at 10,000 shares. This elimitates all the little guys and you can focus on what the big guys are doing with the stock. It's a lot easier on the eye balls too.
    #20     May 29, 2002