Quote from solom113:
I'm having trouble understand reading the tape. I can't seem to find any kind of pattern or anything to it. I CAN sense the momentum or speed of the tape, but as far as sizes of trades etc I can't make sense of it. For instance, if price is at a big support, and I watch the tape, there's no real information besides speed that I feel I can glean to help me. If i see someone buying 50 NQ at support, how do I know whether they are actually buying or just covering a short position? or does that not even matter? I just feel like I'm not getting what I'm supposed to be looking for, besides tape momentum. Any ideas? Thanks
Solom,
Tape reading takes time, more so than reading price action on the chart.
For some basic ideas filter your time and sales window to highlight market buying and selling (that means AT MARKET) mostly because this is a sign of requiring speed before precision. When price is at key areas on the chart, say support, resistance, trendlines, wedges contracting, anything meaningful watch the tape very carefully.
In fact today, when price broke out of the symmetric triangle all I did was read the tape, was not even looking at the chart. I could tell most of the pressure was on buying, the anxiety to sell did not start until it really fell, not even on the retracements, that was just free fills for the longs. All very very telling. See price can go down as the buying pressure increases, it is possible and that's how you use time and sales to get killer entries.
Eventually you will start noticing when price is going down how it is bought on the way down and how aggressively or if the pressure continues, are the sizes increasing on the way down, is the market buying outnumbering the market selling is it the selling. All these details are very telling but this is all happening live and very fast so will take lots of practice. It does not matter if its buying or short covering, why would a short cover? Because he thinks price is going higher now right?
I can't teach you tape reading, this one you must do on your own, it is without a doubt the most powerful thing out there but your eyes will get very tired until it starts making sense as it happens. Not trying to discourage you just warning you that this one takes an effort and a lot of screentime but its the absolute trampoline to the next level.
Anek
(I've tried, I know what you mean)