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TAPE READING (chat room cont.)
- Thread starter shortseller
- Start date
Quote from Maverick74:
No, volume is meaningless. The volume prints are important as they pertain to pattern recognition. In other words seeing the same 300 shares on the bid, seeing double prints, perfect prints, seeing 100 shares step up to size or offer down into size. This is important. Whether or not the stock is trading less then, at, or more then it's daily avg volume is useless. Although usually news stocks will be trading at greater then it's avg volume.
I knew a guy at my firm that traded like 50 to 100 stocks and he also would just look at his p&l screen and he would buy more shares if they were green and sell the ones that were red. Didn't even look at quotes. Just placed market orders. The guy made about 3 to 5 mil a year and was also our firm's largest MOC trader.
Great to hear that! Our group leader made 1 mil a year but he told me he is not good enough. The best positions he can have is only 30 stocks. He know a trader who made 10 mil a year has 300 positions.
The best trader doesn't look at quotes, and he still needs to look at the quotes. He is trying to switch to the best method. Just look at p&l. The problem with looking at too many stuffs including quotes is that you cannot handle a lot of positions. By reducing the less important information, and just look at the most important info, you can increase your positions and can make a lot more.
If they just look at the quote window and p&l screen, there should have a lot of empty spaces in his monitors. What do you do with the other spaces. Just curious!
Quote from Maverick74:
Not sure if this question was meant for me but yes, I only looked at NYSE quotes.
This is the question for you.
If you just look at s&p future chart, quote window, and p&l screen, you should have a lot of empty space in your montiors. What do you do with other spaces.
Do you look at s&p future charts with different intervals (5 min, 15 min, 30 etc )?
Quote from yip1997:
This is the question for you.
If you just look at s&p future chart, quote window, and p&l screen, you should have a lot of empty space in your monitors. What do you do with other spaces.
Do you look at s&p future charts with different intervals (5 min, 15 min, 30 etc )?
No spoos chart, only the quote. No charts! The rest of the space is used primarily for pre-market research. During the day, maybe have a news feed up and the web. Pretty simple really. All this crap about having 20 flat panels and shit never worked. The rule at our firm was, the more screens a guy had, the more negative his account was. The top traders in our firm kept it very simple. The more things you look at, the more it distracts you, including the internet.
Quote from Maverick74:
No spoos chart, only the quote. No charts! The rest of the space is used primarily for pre-market research. During the day, maybe have a news feed up and the web.
I am really grateful for your response to my questions. So you start with pre-market research and look at all the news, earnings reports, earning guidance etc, and get 15 stocks to focus for the day.
During the day, watch the quotes and the s&p future and trigger longs when you see a big buyer or shorts when you see a big seller. If the buyer bids up and continue to buy, do you buy more? Do you scale-in?
When the buyer is temporary gone (temporary or permanent, who knows), you get out too. Right? When the buyer back in, buy again.
After the market close, study the time & scale.
After you studied the time & scale, will you focus the same stock the next day? (Say for example, the stock continue to show strenght before market close ).
Tape reading seems work well usually some time after the trend has been developed. Do you buy at open? ( Usually at open, it is not easy to identify big buyer, i think )
The best trader I know told me that he made 50% of the money at open ( the first hour ). He usually buy at open. Does it contradict with tape reading?
Quote from yip1997:
I am really grateful for your response to my questions. So you start with pre-market research and look at all the news, earnings reports, earning guidance etc, and get 15 stocks to focus for the day.
During the day, watch the quotes and the s&p future and trigger longs when you see a big buyer or shorts when you see a big seller. If the buyer bids up and continue to buy, do you buy more? Do you scale-in?
When the buyer is temporary gone (temporary or permanent, who knows), you get out too. Right? When the buyer back in, buy again.
After the market close, study the time & scale.
After you studied the time & scale, will you focus the same stock the next day? (Say for example, the stock continue to show strength before market close ).
Tape reading seems work well usually some time after the trend has been developed. Do you buy at open? ( Usually at open, it is not easy to identify big buyer, i think )
The best trader I know told me that he made 50% of the money at open ( the first hour ). He usually buy at open. Does it contradict with tape reading?
Yip,
I think you've got it! Congratulations!
No, I very rarely trade the same stock the next day. Follow the news, follow the news. Yes, I use to go crazy at the open. I would say within 30 secs I had positions in all 15 stocks long and short. Then I would weed out the ones I didn't like and start focusing on building my positions on the ones I did like.
I would say I made at least 40% of my money on the open, 10% during the day and 40% on the close. The close is really the big payoff for tapereaders. By carefully watching the stock all day I would be very prepared for the buyer and the seller to come back at the close. Many times we would see the largest moves at the close long after everyone else gave up on the stock. A typical day would have me selling my stock into the close on the last print which many times would be a large gap of .40 to .50 on a size print.
Quote from Maverick74:
Yip,
I think you've got it! Congratulations!
No, I very rarely trade the same stock the next day. Follow the news, follow the news. Yes, I use to go crazy at the open. I would say within 30 secs I had positions in all 15 stocks long and short. Then I would weed out the ones I didn't like and start focusing on building my positions on the ones I did like.
Maverick,
I think I got most of the concepts. I still don't understand how you can buy the stocks at open using "tape reading". At open, stocks gap up or down depending good news or bad news. There is no footprint for big buyer/seller!! There is not even a trend!!
My understanding is most traders chase stocks at open, and use tight risk management to sell the losers, and build up positions for winners. On average, you make a nice profit because of position management. Am I right on this point?
Am I right about this point?
Quote from yip1997:
Maverick,
I think I got most of the concepts. I still don't understand how you can buy the stocks at open using "tape reading". At open, stocks gap up or down depending good news or bad news. There is no footprint for big buyer/seller!! There is not even a trend!!
My understanding is most traders chase stocks at open, and use tight risk management to sell the losers, and build up positions for winners. On average, you make a nice profit because of position management. Am I right on this point?
Am I right about this point?
Actually no. I could find buyers and sellers immediately off the open. Plus tick bids, double prints, perfect prints being printed on the offers, small bids stepping up. You just need to pay attention. It's not easy. Of course nothing is.
But you most certainly can find buyers and sellers off the open. With weak stocks, you could find stocks that open on a minus tick offer with 100 shares stepping down. Too easy. Hit every bid in sight. But you need to be very quick off the open. Because many times the stock can change directions if the buyer or seller gets all his stock off pretty quick. This typically happens when they have been buying or selling for days and now are done.
BTW, one of our rules was, when you are in a strong stock and the stock is bidding the high of the day, you always buy 100 shares at the market to push it along. Same thing on the downside. If a stock is offering the low of the day, you sell 100 at the mkt. You would be surprised how much damage you could do with 100 shares and how much you can help the specialist push the stock higher or lower.