Tape Reading or Chart Trading

T

traderharley

Hello Everyone,

I learned from this site that many people use minute chart, tick chart, or market profile chart for their day trading. Recently, I read a book "One Good Trade", the author claims Tape Reading is a much to day trade. I know you guys have a lot of experience in this aspect, could you please let me know what is the better way you feel? Thank you so much.
 
Quote from traderharley:

Hello Everyone,

I learned from this site that many people use minute chart, tick chart, or market profile chart for their day trading. Recently, I read a book "One Good Trade", the author claims Tape Reading is a much to day trade. I know you guys have a lot of experience in this aspect, could you please let me know what is the better way you feel? Thank you so much.
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I just read that a few weeks ago. I really enjoyed the book however some of the book didn't provide as much value as I hoped.

In terms of Tape reading... for me this is really important. I would still be able to trade but my results would take a big hit if I didn't have access or didn't watch the tape.

Just as in the case of charts there is no science to this. Its all a matter of spending hours and hours watching the prints. Lots of things matter such as size of prints, particular ECNs they relate to and the frequency. And obviously whether they are hitting the bid or the offer. Other things to watch for are held levels (orders that are refreshed.... ie a big seller or buyer) and specialist prints (NYSE orders for NYSE stocks).

For me I look at the charts to determine trend and potential support and resistance (the idea generation for potential trades). I then use the level 2 & time & sales (tape) to know whether to enter a trade and when to do it (Actual decision / execution).

Quote from traderharley:

When I ask about "Tape Reading", I mean the "streaming Level II", do we have to watch this to be successful in day trading?
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'The Tape' refers to the time&sales... not the level 2. The tape shows the time, size and price of last executed transactions. The level 2 shows the bids and offers but it doesn't mean they have to buy / sell because they can just withdraw their order.

I believe 'Taping reading' refers to watching the time and sales in-conjunction with also watching the level 2. In order of importance I would place a lot more importance on the time&sales ahead of the level2. It's probably less manipulated.

Quote from hoodooman:

no
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great advice hahaha
 
Quote from PropTraderMTL:

I just read that a few weeks ago. I really enjoyed the book however some of the book didn't provide as much value as I hoped.

In terms of Tape reading... for me this is really important. I would still be able to trade but my results would take a big hit if I didn't have access or didn't watch the tape.

Just as in the case of charts there is no science to this. Its all a matter of spending hours and hours watching the prints. Lots of things matter such as size of prints, particular ECNs they relate to and the frequency. And obviously whether they are hitting the bid or the offer. Other things to watch for are held levels (orders that are refreshed.... ie a big seller or buyer) and specialist prints (NYSE orders for NYSE stocks).

For me I look at the charts to determine trend and potential support and resistance (the idea generation for potential trades). I then use the level 2 & time & sales (tape) to know whether to enter a trade and when to do it (Actual decision / execution).



'The Tape' refers to the time&sales... not the level 2. The tape shows the time, size and price of last executed transactions. The level 2 shows the bids and offers but it doesn't mean they have to buy / sell because they can just withdraw their order.

I believe 'Taping reading' refers to watching the time and sales in-conjunction with also watching the level 2. In order of importance I would place a lot more importance on the time&sales ahead of the level2. It's probably less manipulated.



great advice hahaha
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Thank you so much ProptraderMTL, and I will spend more time to practice on watching "Time & Sales". By the way, do you have a website or link for some documents related to how to watch "Time & Sales"?
 
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