Learning to Read the Tape
- Thread starter TTStocks
- Start date
Unless you have an eidetic memory, forget trying to "read tape".
"Reading charts"... now that's another matter.
Yes. I read the tape every day.
You need
1. A good ladder depth of market system. CQG or X_Trader are enough for the Eurostoxx and Treasury Notes because they are thicker and mechanical. Jigsaw platform is the best for this.
2. A fast connection. Although I'm trading from Australia with 300ms delay to Europe, I can still manage. So you can, too.
3. To understand what you're doing.
E.G. Don't bother trading the Treasuries if that's your only ladder up. Bring up the 5yr, T-Bond and Ultra T-Bond. And don't trade the Eurostoxx without the Dax ladder right next to it.
Reading the print still works and will always work. It is the application of the supply and demand of money succeeding or failing to do something.
There is always a game being played. The bots are small d*cks. The big bank guys are the guys you want to look for.
Most people who feel that the Bots have taken over, and they are correct to an extent when it comes to the easier 'free money' trades. For example, correlation used to be an easy trade back when lag was higher. The S&P500 would drop 30-40 ticks off a bad news and the Treasury Notes would lag behind, or other equities.
If you are limited by your imagination then really you can read the tape in everything. The problem is with thinner markets, most information displays are not configured to allow you to see it clearly. I have a work-around for this
But you don't need it.
You need to know how the game is being played in the market you're trading. It's easier to understand the game if you trade markets with very high open interest. This is why I recommend the Stoxx during the European session, and the Treasuries during the American session. Stick to the opens, and start learning about context.
P.S. Only the correct educational material and guidance will take someone on the right path when it comes to succeeding at this. There are a lot of frauds out there who want your money for free.
You need
1. A good ladder depth of market system. CQG or X_Trader are enough for the Eurostoxx and Treasury Notes because they are thicker and mechanical. Jigsaw platform is the best for this.
2. A fast connection. Although I'm trading from Australia with 300ms delay to Europe, I can still manage. So you can, too.
3. To understand what you're doing.
E.G. Don't bother trading the Treasuries if that's your only ladder up. Bring up the 5yr, T-Bond and Ultra T-Bond. And don't trade the Eurostoxx without the Dax ladder right next to it.
Reading the print still works and will always work. It is the application of the supply and demand of money succeeding or failing to do something.
There is always a game being played. The bots are small d*cks. The big bank guys are the guys you want to look for.
Most people who feel that the Bots have taken over, and they are correct to an extent when it comes to the easier 'free money' trades. For example, correlation used to be an easy trade back when lag was higher. The S&P500 would drop 30-40 ticks off a bad news and the Treasury Notes would lag behind, or other equities.
If you are limited by your imagination then really you can read the tape in everything. The problem is with thinner markets, most information displays are not configured to allow you to see it clearly. I have a work-around for this
But you don't need it.You need to know how the game is being played in the market you're trading. It's easier to understand the game if you trade markets with very high open interest. This is why I recommend the Stoxx during the European session, and the Treasuries during the American session. Stick to the opens, and start learning about context.
P.S. Only the correct educational material and guidance will take someone on the right path when it comes to succeeding at this. There are a lot of frauds out there who want your money for free.
Lol
Yes. I read the tape every day.
You need
1. A good ladder depth of market system. CQG or X_Trader are enough for the Eurostoxx and Treasury Notes because they are thicker and mechanical. Jigsaw platform is the best for this.
2. A fast connection. Although I'm trading from Australia with 300ms delay to Europe, I can still manage. So you can, too.
3. To understand what you're doing.
E.G. Don't bother trading the Treasuries if that's your only ladder up. Bring up the 5yr, T-Bond and Ultra T-Bond. And don't trade the Eurostoxx without the Dax ladder right next to it.
Reading the print still works and will always work. It is the application of the supply and demand of money succeeding or failing to do something.
There is always a game being played. The bots are small d*cks. The big bank guys are the guys you want to look for.
Most people who feel that the Bots have taken over, and they are correct to an extent when it comes to the easier 'free money' trades. For example, correlation used to be an easy trade back when lag was higher. The S&P500 would drop 30-40 ticks off a bad news and the Treasury Notes would lag behind, or other equities.
If you are limited by your imagination then really you can read the tape in everything. The problem is with thinner markets, most information displays are not configured to allow you to see it clearly. I have a work-around for this
You need to know how the game is being played in the market you're trading. It's easier to understand the game if you trade markets with very high open interest. This is why I recommend the Stoxx during the European session, and the Treasuries during the American session. Stick to the opens, and start learning about context.
P.S. Only the correct educational material and guidance will take someone on the right path when it comes to succeeding at this. There are a lot of frauds out there who want your money for free.
There is no more tape reading and there has not for now more than 10 years. Toss that old , dusty 90s book into the garbage, it's worthless. If anyone in 2016 tells you tape reading works then don't walk, but run. They are most likely reading the tape off a recorded data stream from 2002.
s0mmi, thanks for your post. So you recommend Futures over Stocks?
All manual methods are outdated now. Why not use software to do the same thing with 100% accuracy? JIGSAW comes to mind as a decent retail package for automated tape reading. Heck, we were using automated tape reading back in 2004,----
Futures or Stocks, it does not matter. Whatever game you want to learn, you have to jump in deep. I got started into Futures 5.5 years ago, so that's what I do. We have an Equities division at my prop firm and they are doing just fine on Australian shares. There will always be stocks in play for the day, and activity which comes out for different companies. I can't give too much detail about this because it's not my main focus.
The Futures division has many different people who try to be profitable doing a variety of things. This is my specialty. You can do spreads or outrights, equities or bonds or stirs or commodities etc. It depends on the tools you have, and how you use them.
I would not recommend doing this by yourself. You need guidance and a mentor. There are things I can show you in a book of the Treasuries that you would never pick up by yourself. I can bring up the 5-year and 30-year ladder to put the story together.
There are a series of big players who like to behave a certain way. When they want to get filled, you look at the bids and offers and the prints. Are they pulling, or adding? How much is printing? What is the context of the day? There are so many things to consider. I summarize these things in a glance, because I've done it for half a decade. There's no point going to specifics because this type of material is extremely extensive and deep.
If I could recommend a book to get started, it's "One Good Trade" by Mike B. If you're passionate and motivated about trading, you will continue the journey.
I am taking on a kid next month, and another one next year. They will be learning to read the tape. I was spreading for 4.5 years, and it worked great. But my strategy was exposed in changing market conditions and I had to adapt. I've adapted to a new way of trading. There's not 1 way to trade things, but I can tell you that acting on the price-action is a timeless strategy that will never go away. The only problem that we face today is how to display the information for us to process. This is quite easy, with some volume profile and trading a market that is slower and mechanical as mentioned before. This is why I recommend the Stoxx in the European session, and the Treasuries during the American.
If I can do it with a 300ms delay in Australia, then you can most certainly do it too.
Finally, I'll just add a quick remark on why people doubt these things;
Most guys who fail at the game, are very salty. They will automatically rule everything out. I do not blame their pessimism. They had no-one to help them and they probably lost a lot of money. They, unfortunately, did not learn some epic lesson to transform their account around. It is quite depressing.
Stay hungry and you'll get there.
Describe in detail the the actual tape reading techniques that worked over 10 years ago and now no longer work. No BS cop outs like saying all of them. Describe the actual techniques. This should be no problem since you act like you know everything.
You will find that you are full of crap as usual since just like 'chart' reading, order flow only gives you information that aids in decision making and is absolutely not a 'trading system' that no longer works as you are implying.