TAPE READING (chat room cont.)

[Spxdes]

Maverick,
You sound like a trader at my firm. I do the same things pretty much, though I have never tested the stock by sending out market orders. I'm not at that level yet. Just curious, if you think that the hybrid system will kill tape reading, then what will you do when it arrives? Try to adapt to the tape or will you try other styles of trading such as swing trading?

-spxdes

 

[Maverick74]

Quote from pinabetal:

Agree. However, you are understanding it big time INTRADAY. You are basically understanding price/volume intraday as you hunt for supply/demand imbalances. Is there a way to understand price/volume daily and supply/demand imbalance on a daily basis? If so, would this not be tape reading on a daily basis IF you are only looking at price and volume?

You can't really tell on a daily chart what is going on. All you can do is apply your standard TA about rising volume on rallies which is healthy. Look for big gap moves with washout volume. Look for strong stocks that pull back on light volume, look for stocks that breakout out on higher then avg volume. But still, this is not tape reading because you really can't see the buyer or seller. You are making too many assumptions. I never ever made assumptions about the buyer or seller. He was either there or not. No guess work. I can't stress this enough that it is literally about spotting A single buyer or A single seller. It was that precise.

 

[Maverick74]

Quote from Spxdes:

Maverick,
You sound like a trader at my firm. I do the same things pretty much, though I have never tested the stock by sending out market orders. I'm not at that level yet. Just curious, if you think that the hybrid system will kill tape reading, then what will you do when it arrives? Try to adapt to the tape or will you try other styles of trading such as swing trading?

-spxdes

I already left the game. I trade equity and index options now and I carry positions forward month to month in the same products. Yes, the hybrid system will at the very least damage tape reading if not destroy it completely. That is my opinion.

 

[pinabetal]

Quote from Maverick74:

You can't really tell on a daily chart what is going on. All you can do is apply your standard TA about rising volume on rallies which is healthy. Look for big gap moves with washout volume. Look for strong stocks that pull back on light volume, look for stocks that breakout out on higher then avg volume. But still, this is not tape reading because you really can't see the buyer or seller. You are making too many assumptions. I never ever made assumptions about the buyer or seller. He was either there or not. No guess work. I can't stress this enough that it is literally about spotting A single buyer or A single seller. It was that precise.

A daily chart is a sum of ALL the individual transaction that took place. You are seeing ALL the buyers/sellers at one glance. Why is it necessary to see each individual buyer/seller to be tape reading?

 

[Spxdes]

Quote from Maverick74:

I already left the game. I trade equity and index options now and I carry positions forward month to month in the same products. Yes, the hybrid system will at the very least damage tape reading if not destroy it completely. That is my opinion.

Wow, I really hope you are wrong cause that would suck for me. I haven't been trading that long and all of my efforts have been to learn the tape. I know absolutely nothing about TA. I tried using indicators a few times but just got way to frustrated. What strategies are you using trading options?

-spxdes

 

[Maverick74]

Quote from pinabetal:

A daily chart is a sum of ALL the individual transaction that took place. You are seeing ALL the buyers/sellers at one glance. Why is it necessary to see each individual buyer/seller to be tape reading?

See, that is exactly my point. We are trying to get down to the smallest atom here. I don't want to know what the collective action is in the stock, I want to know there is one buyer, where he is buying and when he is done. It has to be that precise or that edge is gone. You will get whipsawed around with the futures, daytraders and the program trading.

 

[pinabetal]

Quote from Maverick74:

See, that is exactly my point. We are trying to get down to the smallest atom here. I don't want to know what the collective action is in the stock, I want to know there is one buyer, where he is buying and when he is done. It has to be that precise or that edge is gone. You will get whipsawed around with the futures, daytraders and the program trading.

I think there is an easier way to tape read and it is indeed interpreting the collective action daily or weekly and especially looking for institutional buying. Their footprints or absence are on any daily chart, weekly chart..etc At least your eyes don't burn out. However, if one is scalping your concepts make alot of sense. Nevertheless, one can daytrade/swingtrade by reading the daily/weekly tape.

 

[Maverick74]

Quote from pinabetal:

I think there is an easier way to tape read and it is indeed interpreting the collective action daily or weekly and especially looking for institutional buying. Their footprints or absence are on any daily chart, weekly chart..etc At least your eyes don't burn out. However, if one is scalping your concepts make alot of sense. Nevertheless, one can daytrade/swingtrade by reading the daily/weekly tape.

Like I said, I'm not saying what you are describing is not effective. It just doesn't have the precise accuracy of truly reading the tape. There are millions of ways to trade profitably, this was simply one of them.

 

[Maverick74]

Quote from Spxdes:

Wow, I really hope you are wrong cause that would suck for me. I haven't been trading that long and all of my efforts have been to learn the tape. I know absolutely nothing about TA. I tried using indicators a few times but just got way to frustrated. What strategies are you using trading options?

-spxdes

Sorry, I can't really talk about my options trading. I've worked too hard to put my style together. The only reason I'm being as liberal as I am about sharing the tape reading info is because I don't do it anymore and I believe most of the edge to be gone or on it's way out. Trust me, I'm not THAT nice.

 

[pinabetal]

Quote from Maverick74:

Like I said, I'm not saying what you are describing is not effective. It just doesn't have the precise accuracy of truly reading the tape. There are millions of ways to trade profitably, this was simply one of them.

Nevertheless, it seems to mean you are only defining tape reading as intraday. Am I correct? You see no way it could be daily..weekly? Is that correct?