opened below the pivot, retraced and went back down through the previous days value area, average volume is 15 million, stock is Ford, these size prints kind of seem random right in the middle of the day/range, stock usually has 10k size on the bid/offer only news on F is that there is a board meeting later on next week.
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TAPE READING (chat room cont.)
- Thread starter shortseller
- Start date
opened below the pivot, retraced and went back down through the previous days value area, average volume is 15 million, stock is Ford, these size prints kind of seem random right in the middle of the day/range, stock usually has 10k size on the bid/offer only news on F is that there is a board meeting later on next week.
Quote from dwl603:
opened below the pivot, retraced and went back down through the previous days value area, average volume is 15 million, stock is Ford, these size prints kind of seem random right in the middle of the day/range, stock usually has 10k size on the bid/offer only news on F is that there is a board meeting later on next week.
I would never trade that stock. The news is immaterial. The stock is too thick. Pivots and value areas have no bearing on tape reading.
Let me explain something a little more clearer here for everyone. When there is a real buyer or seller in a stock, they don't give a crap about technical levels or pivots points. They have stock to buy and they need to buy it now!
Do you guys understand how a broker gets order flow? He is graded on his ability to beat the VWAP (Volume weighted average price). This is his report card. That means his job is to get stock and try to work with the specialist so he does not run the stock up 10 dollars. If he does not buy all the stock he is suppose to, he's fired, it's that simple.
That's why you will see late in the day when the buyer comes back, he will be bidding size at the high of the day. You'll see plus tick bids. I have met many specialists in NY and I met their brokers. I have talked to them extensively. They do NOT look at charts! They work order flow. This is their job.
If anyone of you guys ever get a chance in NY and you know someone on the floor, spend a day down there at a post and watch how a specialist works an order. It's very methodical and very precise. You would be amazed at how well they do their job. If someone has 600k shares of stock to buy after the company just raised its earnings estimates, they want the stock and they want it now!
Quote from steve46:
Yip:
You have to have a couple more skills. First, you have to know that buyer may have more to go, but they do not want you to see their hand. If they disappear for a while, and the stock gets marked down, it is to their advantage. You need to look on the other side. Do they disappear completely, or do they appear on the offer, selling it down. If they leave the bid, how long before they return? Is there a rhythm to the movement. Check it out, use your head. If it is a news stock, who else is strong in the stock? You have to learn how your stock acts from day to day as well. Look at the open as one segment of the day. How do they trade it at the open and into the first hour. Look at what happens at lunch. Does the buyer disappear at lunch (NY)? Often that happens and you have a trainee working that stock with instructions to "go with the flow". A lot of this is gained by being a patient observer and putting two and two together. Finally, you can look at the timing and sometimes catch the automated buys and sells. The best time to do this is after the sesssion is over. Look at the T&S and check out the time between prints. You may see prints go off like this .05 .20. 40 .55 and repeat. That is likely an automated execution. You have to study this on your own time, and put what you learn into use a little at a time.
Good luck,
Steve
Edit:
One final idea. If you see a buyer refresh at those intervals, my own preference would be to match them. Often you will see them trigger that kind of buying (200 @.05, 200@.20, etc) and you may think "I will front them and buy size". Don't, many programs are setup to see your size comming in and then let you sit there with the ball in your lap. Dont get greedy. Take a bite, and pull back, Rinse and repeat. Just one man's opinion.
Quote from steve46:
Yip:
You have to have a couple more skills. First, you have to know that buyer may have more to go, but they do not want you to see their hand. If they disappear for a while, and the stock gets marked down, it is to their advantage. You need to look on the other side. Do they disappear completely, or do they appear on the offer, selling it down. If they leave the bid, how long before they return? Is there a rhythm to the movement. Check it out, use your head. If it is a news stock, who else is strong in the stock? You have to learn how your stock acts from day to day as well. Look at the open as one segment of the day. How do they trade it at the open and into the first hour. Look at what happens at lunch. Does the buyer disappear at lunch (NY)? Often that happens and you have a trainee working that stock with instructions to "go with the flow". A lot of this is gained by being a patient observer and putting two and two together. Finally, you can look at the timing and sometimes catch the automated buys and sells. The best time to do this is after the sesssion is over. Look at the T&S and check out the time between prints. You may see prints go off like this .05 .20. 40 .55 and repeat. That is likely an automated execution. You have to study this on your own time, and put what you learn into use a little at a time.
Good luck,
Steve
Edit:
One final idea. If you see a buyer refresh at those intervals, my own preference would be to match them. Often you will see them trigger that kind of buying (200 @.05, 200@.20, etc) and you may think "I will front them and buy size". Don't, many programs are setup to see your size comming in and then let you sit there with the ball in your lap. Dont get greedy. Take a bite, and pull back, Rinse and repeat. Just one man's opinion.
Steve,
Thanks for the idea. Will experience it.
Quote from Maverick74:
I also would need to know where is the stock? Is it near the high of the day? Has it been making new highs all day? Was there news on the stock? What are the futures doing? Does the buyer come back when the futures start to uptick? There are just so many variables at play here.
BTW, I would never buy a stock just because the bid is being refreshed.
Mav, Thanks for your comment.
It is usually near the high of the day. The prints are usually small size, and so i assume there is not an aggressive seller. Since the stock is strong all day, is it reasonable to think it will move higher?
One more question: Nothing is 100%. How accurate is double prints, perfect prints, etc? I am trying to quantify my tape reading skill.
Quote from yip1997:
Anyone knows how to find a complete list of stocks with trading range at around $2. Most of the stock screening website like yahoo can not use trading range as a criteria.
I use MSN stock screener. I set it to find stocks where TodaysHighPrice >= TodaysLowPrice +1. Just use that and change it to 2 to find stocks with a $2 range. Hope that helps.
-spxdes
Quote from Spxdes:
I use MSN stock screener. I set it to find stocks where TodaysHighPrice >= TodaysLowPrice +1. Just use that and change it to 2 to find stocks with a $2 range. Hope that helps.
-spxdes
Spxdes,
Thanks a lot. This is helpful but it only gives you the list of stocks with today's range of $1. Can we use average trading range as a criteria.
Maverick,
I was actually discussing the VWAP in one of my classes a few days ago. Are there any ways of getting an idea of what that price will be? What should we look for on the tape to figure this out? Also, do you ever research for stocks with a thin float or high betas, etc.? My firm tells new traders to avoid trading stocks in the news when you are starting off because they are too active and there is too much noise. They recommend trading lower volume so you actually see how the specialist prints. Thanks for your great thread! It is very helpful and much appreciated!
-spxdes
I was actually discussing the VWAP in one of my classes a few days ago. Are there any ways of getting an idea of what that price will be? What should we look for on the tape to figure this out? Also, do you ever research for stocks with a thin float or high betas, etc.? My firm tells new traders to avoid trading stocks in the news when you are starting off because they are too active and there is too much noise. They recommend trading lower volume so you actually see how the specialist prints. Thanks for your great thread! It is very helpful and much appreciated!
-spxdes
Quote from yip1997:
Spxdes,
Thanks a lot. This is helpful but it only gives you the list of stocks with today's range of $1. Can we use average trading range as a criteria.
I am sure you can. Mess around with it and you will probably find a way. I also have other criteria I use for my searches such as daily avg. volume, stock price, beta, and sometimes sector. This is a good way to find stocks with nice smooth moves that can be used to learn to read the tape more easily in my opinion.
-spxdes