Tape Reading - Mind Modeling

MarkBrown

MarkBrown

After thirty years of mechanical systems modeling, I have developed some tape reading skills along the way. Rather than just hypothetically testing, I decided that I would put real money up to test and validate. My learning curve has dramatically diminished using this method to develop short term mechanical models. Continually I have strived to ignore any inclination of discretionary trading, but finally I gave in and give it a shot. It seems to be a good avenue for me to explore the true nature of the markets.

Pretty much through the years you can keep seeing the same setups which are basically human nature. Expansion and Contraction are undeniable events of profitability. But tape reading is down on the pink noise level. These trades are extremely short term very selective and not within the realm of high frequency trading. It's a forgotten level of trading who's time of resurrection may possibly be at hand.
 
MarkBrown said:
After thirty years of mechanical systems modeling, I have developed some tape reading skills along the way. Rather than just hypothetically testing, I decided that I would put real money up to test and validate. My learning curve has dramatically diminished using this method to develop short term mechanical models. Continually I have strived to ignore any inclination of discretionary trading, but finally I gave in and give it a shot. It seems to be a good avenue for me to explore the true nature of the markets.

Pretty much through the years you can keep seeing the same setups which are basically human nature. Expansion and Contraction are undeniable events of profitability. But tape reading is down on the pink noise level. These trades are extremely short term very selective and not within the realm of high frequency trading. It's a forgotten level of trading who's time of resurrection may possibly be at hand.
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Mark Brown...some traders say they do tape reading via time and sales...some say the DOM....and some have even said tick charts to read order flow. If I may ask...what tools are you using for tape reading? Thank you. GOOD LUCK!!!!!!!!! P.S. I use DOM.
 
I have studied the Dom number of years now and have developed systems built on what I have studied, so it not so much of what you can see for any length of time, it is what you don't or can't see by human eye. Much of volume that comes and goes on the Dom during the day session happens so fast and with many orders coming and going, really impossible to see it all. And why some flash volumes in unknown to me unless it is a way to force HFTs to take action. There are times for me to get an extra tick or two and sometimes by reading the Dom to avoid a signal altogether cause my definition of trend changes, when you Scalp, trend has to be defined and smallest changes will alter trend at times during chop, and yes during chop, I always have trend.

But you watch Dom long enough, you will develop some patterns based on the volumes, when one side gets down to zero, price moves to next level, and when there is more volume on one side than other seems to be like a magnet. I very seldom use limit orders so as not to show my hand and never ever hit bids/asks with volumes greater than what is there, but it is a study of what happens when I have taken what was there and another 500 appears, you always have to think about someone is either betting against me or getting out on me, but it does force me to quickly look at the 60 minute to see if a trend line is there.

Have always enjoyed Mark Brown's posts through the years. He is one of those traders who have inspired me to keep open mind.
 
i am just watching the quote screen. if i paid any attention to anything else my experience is that i will fail. admittedly i get my ass handed to me every now and then, but trying to dedicate any time to fundamentals such as news has not proven worth it either.

(with the exception of 911 i was long the sp and when i saw the second plane hit i immediately went long 30 yr bonds as they had not moved yet - this is the only time i have ever used the news to prompt a trade)

there are definitely patterns in everything everywhere, they are not always solid and dependable but with good management skills you can often minimize any deviations from your plan. what i really like about what i am doing is that without having to worry about allot of technical / fundamental inputs. i am free to totally focus on varying position size management.

m
 
MarkBrown said:
These trades are extremely short term very selective and not within the realm of high frequency trading.
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Do you really think automation ain't able to perform what a tape reader does ? If so then what makes it impossible ?
 
K-Pia said:
Do you really think automation ain't able to perform what a tape reader does ? If so then what makes it impossible ?
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i have known tape readers who out performed systems. i have never been really comfortable tape reading myself until now. it has taken over 30 years to become comfortable enough i could do it anytime, anywhere. now what i am saying is that i have new frontiers of personal experience that i will try and program mechanically. i would have just peaked out without stepping outside the safety net of mechanical systems to experience some in the ditches action.
m
 
Tape reading gives you a 50/50 chance of making a profit. The same odds as every other proven strategy out there.
May be I'll use this to build an automated trading system from the ground up using Java and C, lease a couple of seats in exchanges around the world and use my free time to impress new gamblers on some elite forum.
 
so it's possible to trade mechanical the DOM. Have you adivces for trade by this way ? Maybe market more easy or symbol ?

There are DOM patterns with 80/90% of trading succefulling ?

Here there aren't any AI (SVM or NN) for predict the trend for the next 1second or more right ?
 
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