reading the tape

[murray t turtle]

Quote from gongish:

does anyone have any quality suggestions for a book on tape reading?
if youre a tape reader, can you suggest some starting ideas of what to look for?

*******
You 're likely to find both books in a large public library. Specialist help or [Market Maker's Edge by Joshua Lukeman] certain principles apply to both.

Gap up day mostly a good day to sell,like today in QQQ. Same principle in NYSE or NasdaQQQ.

Premarket may hint if its a trend day. Trader Gongish Ive got that in my business plan '' sell non trend gap ups.'' Like Active Trader magazine 5/2003 confirmed that; Babcock article,hedge fund co manager.

Wisdom shows you if my favorite time frame is 30 minutes thru 30 days that means i want to study price & volume 30 minutes thru 30 days on my favorite stocks.Charts quicker than time & sales;not as precise

 

[alanack]

IF my memory serves me correctly, Markets and Market Logic is a very good book about volume, supply and demand relationships, etc. It's out of print, but I do think it's worth trying to find(I found my copy via inter-library loan). It's by J. Peter Steidlmayer and Kevin Koy.

 

[Threei]

Quote from xtraderx:




Chris could you clarify a few things for me? i am somewhat familiar w/ you guys, been to your website, participated in you rtrading rooms, etc... my impression is you guys are more TA oriented... when i think of tape reading i think of reading specialist, determining big buyer/seller, identifying short sales, reading t&s and watching where the big prints go off, etc... is this what you guys do when you read tape or, as you rpost seemed to imply, do you "read tape" from a TA standpoint of volume and price. i would just want to know before i purchased any materials... TIA, and its nice to see you contributing here....

Let me try and answer while Chris is trying to have personal life

Confusion will go away if we define tape reading as one of the methods of reading the market movement. Let's separate the method of reading from media which we use for reading. Media could be the tape itself or the chart. They reflect the same thing: price, volume, pace. Original tape readers of the start of 20th century used the tape for understnadable reason. Technology available today allows to do the same type of analysis using much more convinient media - chart. It's better way to visualize things, to see the history of the movement, the relation of its stages and elements. We use the principles of tape reading that allow to distinguish the smart money actions from that of the crowd, but we use the chart instead of cumbersome tape (times of sales). Imagine scrolling the T&S throughout the day, trying to visualize what happened, or necessitiy to be glued to T&S window to not miss any significant print... Yuck. As for identifying the buyer/seller... sometimes we still do it in some obvious cases, but this approach seems to fade away in terms of both, usefulnes and availability. Level 2 is no longer directional tool, decimalization and some other novelties took care of it
Still, despite using the chart as a method of visualizarion, I don't think what we do can be qualified as TA. We don't apply indicators or studies, we simply watch for certain chart formations matching tape reading principles.

Hope this answers your question... and if not, ask more - it's been a long while since I've talked about roots of tape reading with anyone but editors, and they are not who you want to discuss this with...

Vad

 

[Diamond Geezer]

I am referring here to NYSE tape reading , i.e. putting yourself in the shoes of the NYSE specialist.

See The Q&A section of Technical Analysis of Stocks and Commodities Magazine. In many editions, Don Bright talks about this subject. The Bright guys do seem to know this subject very well. Also do a word search on this site, its addressed in other threads.

Be forewarned that its a technique learned through practice rather than reading. The rules of the game do change occasionally such as with the recent "liquidity book" changes. Lastly, it requires you to be very focussed on no more than say, a couple of stocks for extended periods to learn how the specialist in those particular stocks' behave.

In the interest of full disclosure 1) I trade at Bright and 2) I don't tape read in the true sense of the word.

 

[gwnorth]

In equities heres a trick that I find seems to prevail a trend reversal. Price trades in .05-.10 cent range for several minutes not seeming to go any where - smart money everybodys bailing. Time to get out of your trade before reversal. In ES I find I like to watch the 50 plus lots that go through and see where the charts are in relation a minute before and after or there abouts to get a good feel for whos buying and selling and where she goes next.

Just a thought.