Which came first the chart or the tape?

Discussion in 'Strategy Development' started by Bogwaluth, Jun 9, 2006.

  1. Today was a bit choppy mid day, so I decided to practice my tape reading/scalp skills. I didn't do so badly, but I have problems letting the trades run.

    Anyone have advice for letting trades run when you enter based on the tape?

    Also, for those of you daytrading charts, any advice? I am just looking for some thoughts.

    Today I notice that by watching the tape I would 95% know what the chart would do. It's like the chart is delayed. Weird.

    I currently trade X on a technical basis. I moves and I like it, so I trade that based on my rules. Then I scan others for scalps if nothing is going on.

    It's weird, watching the 5 min chart, I know a turn is coming by watching the tape....my problem is...

    I don't know how long these trades are going to run. That I can't figure out.

    Just looking to start a chat.

  2. billp


    A question here. How do you know from the tape that a turn is coming? Thanks
  3. I scalp without charts. The only windows open on my workstation are three MD Trader (TT) ladders of ES, ER2, and NQ.

    I find charts usless even a hindurance to my trading.
  4. greddy


    Tape reading is the purest form of trading, but is very difficult to master. There are hardly any books on that subject.

    I have the highest respect for those who can trade without charts.
  5. ess1096


    I like to look at the chart and then watch the tape. In other words, it's the chart that gets my attention but it's the tape that tells the true story.

    A chart will show a few 100 lot trades moving up or down and it looks good but the tape shows the true colors. When big blocks move you see them on the tape as well as on the chart. If you only use the chart it's harder to tell the true interest (buying or selling).

    As to the title of this thread, when you read Reminiscences of a Stock Operator, written in 1923, it is the tape and only the tape that is used.

    Account #88888
  6. It isn't "weird". It is what makes you unique. You probably will become a more confident trader if you trust this perception!! This perception is your edge. I would even suggest you stop using your charts.

    It is not a problem it is a FACT !!! No one knows how long any move will last. Do not put to much energy in trying to find out how long a move will last. Remember charts always make trading look easier than it really is.

    A way that you can attempt to let winners run is by entering trades in multiples of 3. Then you exit 1-2 for a quick profit and let the last one run until you feel the move has ended.

    I am a very active futures trader. I only use the TT MD trader window as my guide. I make 20-150 trades a day. I can trade actively because my commissions are very low. The way I make money is by focusing on not losing a lot of money on any one trade. I rarely hold winners for the whole move. If I am able to hold a winner for a big move it is usually because I was lucky!!

    Lets use the ER2(Russell 2000 futures contract) as an example. A tick is worth $10. Lets say I make 100 trades in a day trading 3 lots(contracts). I have 55 winners and 45 losers. My average loser is 2 ticks($60). My average winner is 2.5 ticks($75). By the end of the day I would be up $1275 minus about $325 for commissions(.21 clearing fees for GEM seat lease + .25 commissions to brokerage firm + $50 daily CME globex fee). This would be an example of a very conservative day.

    On a better than average day you would have a couple of winners than ran quickly in your favor!! These couple of winners that ran 1-3 whole points(10-30 ticks) would double or triple your daily profit.

    This is the way open outcry pit locals made their living. They called it scalping. Now hedge fund/institutional traders call this type of trading "high frequency trading". Basically they have hired quants and programmers to scalp the electronic markets the same way Chicago pit locals did.
  7. Esteban


    Would someone please recommend current books/articles on reading the tape.
  8. WyCoff and Humphrey both have books on tape reading...

    check amazon...




    If You Have The Vision We Have The Code
  9. Open a futures account. Pay the TT fee and stare at an MD Trader window for a couple of weeks.

    I do not know of any book that helps with tape reading skills.
  10. billp


    come on guys. Help a bit.

    How do you know when a turn is coming from reading the tape. Thanks
    #10     Jun 10, 2006