TAPE READING (chat room cont.)
- Thread starter shortseller
- Start date
Quote from eusdaiki:
Good call, all it takes is one trader to ruin hours of technical analisis
One question, for beginners wouldn't it be easier to try and spot the buyers and selles with a TAS, to be replaced later just by the quote window once one has full understandment of the concept.?
Sure, if you are only going to watch one stock. But seriously, does anyone really trade that way? You can't clog up your screens by having time and sales windows everywhere. Waste of space. I think you just need to learn the read the quote. You'll get the hang of it pretty quickly.
I played open once with good earning report. The stock gapped up, and continued with strength (plus tick bid etc). I tried nx and never able to get it (to me, it meant very strong), and so I finally used market buy. However, it reversed so quick that I had to get out at a loss of 1 point in just a few minutes.
BTW, what is perfect print?
A perfect print is when you see some odd size on the offer and it prints exactly. Let me give an example.
50.52 x 55.55 200 x 500
1000 55.55
55.55 x 55.60 200 x 700
1500 55.60
55.55 x 55.62 200 x 1000
5000 55.61
55.55 x 55.62 200 x 1000
10000 55.62
55.57 x 55.62 200 x 1000
12000 55.62
55.58 x 55.62 200 x 7600
7600 55.62
55.62 x 55.66 200 x 9000
OK, you see what happened there. Obvisouly that 200 share bid has a lot of stock to buy and cearly there is more stock for sale then what is shown on the offer. Once that 7600 prints, you realize there is no more stock for sale and this stock is going higher. You also see the plus tick bid where the offer was. And lookie here, a big bad size offer. What do you think is going to happen now after that perfect print? It's going to get lifted. Notice how that 200 share bid keeps stepping up. That is a huge buyer.
I think i saw it last week with cbt near market close. It broke intraday high, and I got part of it. It went up 10 cents, and then another big offer. There was some small offer running in front of the big offer. The big offer was fake, and it went up another 10 cents, another big offer. This time there were front running offers with thousands of shares, and it actually printed it. I was nervous because it meant the big offer was real and sellers getting aggressive, and it was near market close. I got out immediately. Was I right? I guess not. It closed a lot higher.
Sometimes i found the big offer after the perfect print is fake, but sometimes they are real. I don't know if there is a way to tell.
I may disagree a bit with my friend Maverick about the NYOB. I like to see where the larger orders are sitting, and since they "can" hold the orders a few seconds, there is generally less "bluffing" going on. I'm sure that Mav has developed his tape reading skills over the years, and looks at what he feels is best for his trading. I do agree that seeing time and sales is usually worthless.
We spend an hour or so in class showing how to identify buyers or sellers that are not being reflected on the quotes, L2, NYOB, ECN's etc. Many of these are computer generated trades that pop in using "if-then" statements....i.e. If bid goes to 1.85 on Nov 30 calls, then pay 30.95 for stock IOC, etc.
We can "fish" by entering small bids between markets, we can fish by attempting to pay the offer, while getting filled at a better price (thus identifying an active seller), etc.
There is a lot to "all encompassing" tape reading...I try to spend a few hours with the boot campers verbalizing what I'm looking at, and, even though they may take a while to do it themselves, they generally seem to be very appreciative of the demonstrations.
It really is an acquired "art" / "skill" - but if you don't know what to look for, then you can't really develop your own abilities.
I watch every trade, every bid/ask size change, specialist "intervention" when "masking" larger NBBO bids/offers, and keep close trace of the PREM/DISC to FV of futures....look for the round numbers (bids/offers)...watch those (not too smart) guys who insist on selling in front of big offers (thinking that they have a built in "stop loss" - and they rarely get to cover at that price because the buyer will buy their .99 offers all day, then buy the point, then the shorts run the stock a nickel or a dime...it's so funny to watch.
Anway, back to my tape reading....
Don
We spend an hour or so in class showing how to identify buyers or sellers that are not being reflected on the quotes, L2, NYOB, ECN's etc. Many of these are computer generated trades that pop in using "if-then" statements....i.e. If bid goes to 1.85 on Nov 30 calls, then pay 30.95 for stock IOC, etc.
We can "fish" by entering small bids between markets, we can fish by attempting to pay the offer, while getting filled at a better price (thus identifying an active seller), etc.
There is a lot to "all encompassing" tape reading...I try to spend a few hours with the boot campers verbalizing what I'm looking at, and, even though they may take a while to do it themselves, they generally seem to be very appreciative of the demonstrations.
It really is an acquired "art" / "skill" - but if you don't know what to look for, then you can't really develop your own abilities.
I watch every trade, every bid/ask size change, specialist "intervention" when "masking" larger NBBO bids/offers, and keep close trace of the PREM/DISC to FV of futures....look for the round numbers (bids/offers)...watch those (not too smart) guys who insist on selling in front of big offers (thinking that they have a built in "stop loss" - and they rarely get to cover at that price because the buyer will buy their .99 offers all day, then buy the point, then the shorts run the stock a nickel or a dime...it's so funny to watch.
Anway, back to my tape reading....
Don
Maverick,
If you buy a stock after it makes a new high, how long do you hold the position if it goes against you after buying it. Thanks.
If you buy a stock after it makes a new high, how long do you hold the position if it goes against you after buying it. Thanks.