TAPE READING (chat room cont.)
- Thread starter shortseller
- Start date
Spotting the institutional buyer or seller is not as simple as looking simply at bids stepping up or offers stepping down. How do you know that's not me?
It's a combination of a lot of things. A lot of it is pattern recognition skills. If there is news on a stock you know there is going to be institutional activity. Once you start seeing bids stepping up you buy a little stock. Watch how that stock reacts to the futures. When the stock starts to come in, what do you see happening? Is the bid getting hit? What size is on the offer? And the bid? What pattern do you see? What kind of size is printing?
The double prints show you that there are two buyers in the stock, not just one. What happens when you see some size come in on the offer? There really are so many things to watch for and every stock behaves different.
I personally do not believe in trading for pennies. Stocks make big moves every day, especially stocks that are in the news. If you know where the buyer or the seller is, you are not going to get shaken out. Believe it or not, there are still stocks out there that move 4 to 5 pts in a smooth line with barely an adverse move against you. It's your job to find these stocks. Is it easy? Of course not. Very few people make a living at this game.
There is still a lot of money to be made trading for pennies. Catching 15 to 20 cents on 1k or more shares is decent money. Do this several times a day and you can make a very nice living. The market is not the same as it was in the 90's. But your right about research. We always try to find stocks that make smooth 25 to 50 cent moves. Thats what I was taught anyway.
Spxdes, Steve,
scalping is a lot of fast movements, quotes and prints go by lightning fast, how do you determine where to enter? Do you do chasers? I am learning how to scalp but it looks that the information comes in and goes by so fast that how do you base your judgements on when to enter a trade? What do you look for when you go long, short? (besides, news)
I assume you guys mostly base your decisions on tape reading (Level 2 and T&S? Or do you look at NYSE Open book as well?) but what do you mainly look for in terms of a good trade to go long or to go short?
scalping is a lot of fast movements, quotes and prints go by lightning fast, how do you determine where to enter? Do you do chasers? I am learning how to scalp but it looks that the information comes in and goes by so fast that how do you base your judgements on when to enter a trade? What do you look for when you go long, short? (besides, news)
I assume you guys mostly base your decisions on tape reading (Level 2 and T&S? Or do you look at NYSE Open book as well?) but what do you mainly look for in terms of a good trade to go long or to go short?
S&P 500 Futures.
We basically do the same stuff that Maverick talks about on this thread. Seriously, Steve told me to read through this thread when I started almost a year ago so what Mav says is right on.
We pay a lot of attention to the futures or the index in which our stock is in. For example, if you're trading an oil stock then you would focus more on the $OIX or $OSX. We are constantly watching our stocks react to significant moves in the market. A lot of it is common sense. If the futures are ripping and your stock is just sitting in a base, what does that tell you? You look on the tape and you see a lot of buying and the stock does not go up or it goes up 10 cents and then quickly comes back in. There is a seller there. Whats gonna happen when the market reverses and starts to sell off? Every monkey that just got long against the seller is gonna panic and dump their shares. We feel that panic, that momentum. Honestly I think its more of an intuition that you develop over time. You see the same stuff every single day for so long and eventually you start to figure out how to make money. You make a trade, lose money, you repeat this hundreds of times until you start to see what you're doing wrong.
A few things that we do that Maverick has said that he doesn't are: using the NYSE Openbook and looking at charts. I think I remember Mav saying that he would beat up anyone using the openbook
. We use it but we don't put a lot of emphasis on it. We might look at where a stale bid or offer is at or look for bids/offers crossing the market. Also the openbook is good at determining the specialist's bid/offer. As for the charts, I could never trade without them. There is just so much to gain from glancing at a chart. You see everything that it has done that day and at what prices that it got hung up on. Charts are great because we dont focus on just one stock. We look at dozens so the charts help us keep track of them quickly. Hope that helped.....
Spxdes