Tape Reading Renaissance

[SimpleMeLike]

Nothing of what you said counters the fact that many large orders that have the potential to move markets are reported late or never, even many sizable fills are reported very late. What you see on the screen is a tiny portion of what is really going on. You missed my point, it's not about giving up, it's about understanding that what you see on the screen means very little for trades of short holding periods (which tape reading specifically

Good Morning M.W,

What you stated maybe be valid, however, what can me or us as retail at-home traders do about that? Why should we even care about getting late price data to trade?

We can not do anything about what you stated. So what you stated is good information but we can only trade the current price we see on the chart and make the best of it. We or I can not worry about what is going on behind the curtains, just trade.

Correct?

Rather it's tape reading or chart reading, all we can do as independent traders is actually the best we can day to day, week to week. When I'm clicking everyday my mind is focused on whatever can give me a win, all I know is what I see. It's my analysis, I have to make the best of it.

 

[SimpleMeLike]

Have you actually said a single thing of substance? Must have missed it. You did not respond specifically to a single point I made. Tape reading is a well defined term, look it up if it is not familiar to you. Nothing of what you said counters the fact that many large orders that have the potential to move markets are reported late or never, even many sizable fills are reported very late. What you see on the screen is a tiny portion of what is really going on. You missed my point, it's not about giving up, it's about understanding that what you see on the screen means very little for trades of short holding periods (which tape reading specifically targets)

Your comment on gpt and ml makes zero sense at all. I I work in this space. Care to elaborate?

Hello M.W.

If the big orders are reported late, how is this an issue for tape readers? This mean the retail tape readers will see late big orders. I do not need to be first in to make money, I can get that late money too on the trades.

I don't understand how this is an issue today for tape readers.

Please explain.

 

[SimpleMeLike]

Again, I provided details why tape reading does not work. If you were interested in substance you would have debated the issue. Your claim that you don't block people is factually wrong, you did block me before and for some reason unblocked me. Then your statement about likes is a reflection that you seem to need others' approval to justify yourself.

I made points why tape reading does not work anymore in retail space. How about debating the issue and the points I made. Please enlighten all of us why you think a hidden order that may be 100 times larger than anything you see on the screen does not greatly skew what conclusions you draw by merely watching and analyzing the screen.

And yes I did look at your posted chart, I am not sure what point you try to make with it because the content does not support your claims.

Hello M.W.

If the 100 order is hidden, that's is fine with me, the red or green bars will tell me everything I need to know and see. There is no hiding with red and green bars.

I vote to let the orders keep being hidden or shown. It doesn't matter.

 

[Drawdown Addict]

There are many useful points in what Mark has done. One could argue that dark pools and OTC markets are not helping to get an accurate tape but still, the ability to write software to aim an analysis on it is useful.

- Custom ranges: We all have the option to use standard time frames provided by our brokers, and that is probably the main reason why people keep failing at predicting moves. Your point of view is biased to the time frame you are using. What if your best time frame for your market is a division of 3.5 hours? Do you have the ability to display that chart? Have you ever tried to plot a chart where time is not a factor? Well, that is what Mark has done, by removing the time from the chart the action is purely displayed. Just that, is useful by itself.
Now that a chart has been made, he can modify the number of points that are included in every bar and get instant charts in order to compare them. Try that with a standard chart on any broker.

- Ability to handle the tape: A tape is a very fast-moving set of data and it is almost impossible to read by a human being. When you are able to get the tape, control the dataset, and display data on it, you are able to apply rules and custom indicators to it. You can get away from your screen and your software will tell you what is happening.

There are markets where the tape can be trusted, like futures and options markets. Obviously using tape reading in Forex is a waste of time, but in some other markets, it is useful.
For the ones that are worried about order spoofing, you can always ask your tape to display only "trades" and that will go away.
But the most important factor is the ability to replace a discretionary trader, when you are able to start that journey, eventually you produce something useful.

By the way, M.W will always start an agitated argument regardless of the topic. That is what she does.

 

[M.W.]

The best a rather average retailer can do is increase holding periods and eliminate virtually all exposure to execution algorithms and limited access to current order book information as function of the incredibly fragmented market venues that exist today.

Let me give you an analogy. Driving a car comes with various risks, own mistakes, others' mistakes, mechanical or electronic failure of cars, failing traffic lights...but we measure risks of accidents, we have a pretty good idea about the rate of accidents, the chance of ending up in a ditch when driving 80mph in a bend that recommends taking it at 45mph. The risks are out there, assessed and published in percentage terms. It's a manageable risk if we and others adhere to traffic laws and regulations.

Now, imagine regulations were very lax, no traffic lights, participants can drive intoxicated, no speed limits, no tree clearings around tight bends. No regulations imposed on car manufacturers. The risk explodes exponentially. Suddenly taking your trip to take your kids to school means a 50/50 chance of never arriving. I make up this number, but you get the point. It now becomes a question of survival. Many would now seriously consider moving right next to a school or workplace or taking safer public transportation.

The same with US equity markets. The market has legally been allowed to become completely fragmented, predatory algorithms are allowed, exchange order algos that only certain professional have access to are out there, hidden orders that can move markets significantly without you ever finding out why. Dark pools, other off exchange venues, delayed reporting excemptions...why would you want to expose yourself to push buttons half blind, at the mercy of those who rig markets, day in day out.

You might answer, because that's the best we can do. No, it's not. You can move out the latency scale and eliminate exposure to all this crap and charade that MMs and execution algos are playing. This is a field best left to professionals and those with access to order flow information and good connections to inter dealer brokers who share information on large structures that cross the tape.

Good Morning M.W,

What you stated maybe be valid, however, what can me or us as retail at-home traders do about that? Why should we even care about getting late price data to trade?

We can not do anything about what you stated. So what you stated is good information but we can only trade the current price we see on the chart and make the best of it. We or I can not worry about what is going on behind the curtains, just trade.

Correct?

Rather it's tape reading or chart reading, all we can do as independent traders is actually the best we can day to day, week to week. When I'm clicking everyday my mind is focused on whatever can give me a win, all I know is what I see. It's my analysis, I have to make the best of it.

 

[M.W.]

If you don't understand why this is a problem then you should definitely not be in the sub daily or weekly holding period game. I don't have time to explain the entire concept but google it, there is tons of material out there. But let me give you a hint, why this is such big issue, why do you think professional firms fight tooth and nail for microseconds and closest proximity to matching engines. Or pay tens of thousands each month for access to elementized news feeds?

Hello M.W.

If the big orders are reported late, how is this an issue for tape readers? This mean the retail tape readers will see late big orders. I do not need to be first in to make money, I can get that late money too on the trades.

I don't understand how this is an issue today for tape readers.

Please explain.

 

[M.W.]

Pls explain to us what the xaxis denotes, it's time. Any idea what timeseries even means? Op did not remove time, what are you talking about. And you can slice and dice time into any custom buckets of your liking with many current platforms or by yourself using tools like Python and pandas/polars

There are many useful points in what Mark has done. One could argue that dark pools and OTC markets are not helping to get an accurate tape but still, the ability to write software to aim an analysis on it is useful.

- Custom ranges: We all have the option to use standard time frames provided by our brokers, and that is probably the main reason why people keep failing at predicting moves. Your point of view is biased to the time frame you are using. What if your best time frame for your market is a division of 3.5 hours? Do you have the ability to display that chart? Have you ever tried to plot a chart where time is not a factor? Well, that is what Mark has done, by removing the time from the chart the action is purely displayed. Just that, is useful by itself.
Now that a chart has been made, he can modify the number of points that are included in every bar and get instant charts in order to compare them. Try that with a standard chart on any broker.

- Ability to handle the tape: A tape is a very fast-moving set of data and it is almost impossible to read by a human being. When you are able to get the tape, control the dataset, and display data on it, you are able to apply rules and custom indicators to it. You can get away from your screen and your software will tell you what is happening.

There are markets where the tape can be trusted, like futures and options markets. Obviously using tape reading in Forex is a waste of time, but in some other markets, it is useful.
For the ones that are worried about order spoofing, you can always ask your tape to display only "trades" and that will go away.
But the most important factor is the ability to replace a discretionary trader, when you are able to start that journey, eventually you produce something useful.

By the way, M.W will always start an agitated argument regardless of the topic. That is what she does.

 

[Drawdown Addict]

Pls explain to us what the xaxis denotes, it's time. Any idea what timeseries even means? Op did not remove time, what are you talking about. And you can slice and dice time into any custom buckets of your liking with many current platforms or by yourself using tools like Python and pandas/polars

Charts need a time variable in order to display the bar, but what you do is simulate a time with the aggregate
of a number of points, the chart is displayed with a time but that time is useless, it can be any date.

 

[M.W.]

Charts don't need a time variable, incorrect.

And what do you mean with aggregate number points? Bid/ask deltas? Trades? That only makes sense when you have access to said, such as for futures. In equity markets what you see and have access real-time is by definition a half-blind snapshot, especially regarding volume

Charts need a time variable in order to display the bar, but what you do is simulate a time with the aggregate
of a number of points, the chart is displayed with a time but that time is useless, it can be any date.

 

[SimpleMeLike]

The best a rather average retailer can do is increase holding periods and eliminate virtually all exposure to execution algorithms and limited access to current order book information as function of the incredibly fragmented market venues that exist today.

Let me give you an analogy. Driving a car comes with various risks, own mistakes, others' mistakes, mechanical or electronic failure of cars, failing traffic lights...but we measure risks of accidents, we have a pretty good idea about the rate of accidents, the chance of ending up in a ditch when driving 80mph in a bend that recommends taking it at 45mph. The risks are out there, assessed and published in percentage terms. It's a manageable risk if we and others adhere to traffic laws and regulations.

Now, imagine regulations were very lax, no traffic lights, participants can drive intoxicated, no speed limits, no tree clearings around tight bends. No regulations imposed on car manufacturers. The risk explodes exponentially. Suddenly taking your trip to take your kids to school means a 50/50 chance of never arriving. I make up this number, but you get the point. It now becomes a question of survival. Many would now seriously consider moving right next to a school or workplace or taking safer public transportation.

The same with US equity markets. The market has legally been allowed to become completely fragmented, predatory algorithms are allowed, exchange order algos that only certain professional have access to are out there, hidden orders that can move markets significantly without you ever finding out why. Dark pools, other off exchange venues, delayed reporting excemptions...why would you want to expose yourself to push buttons half blind, at the mercy of those who rig markets, day in day out.

You might answer, because that's the best we can do. No, it's not. You can move out the latency scale and eliminate exposure to all this crap and charade that MMs and execution algos are playing. This is a field best left to professionals and those with access to order flow information and good connections to inter dealer brokers who share information on large structures that cross the tape.

Hello M.W.,

Thank you for the example and discussion. Very thoughtful.

But I still have a VERY important question for you:

1. What does this have to do with me starring at the chart with my eyes, and clicking the Buy and Sell Button to make profits day to day? I am not being funny when I say this but I can care less about Big Professional Traders, Algos, Dark Pook, Pink Pool, Exhcange venues, delayed reporting, rig markets, Scam markets, Theives, Gangsters, Trump, Biden, Policies, hidden cost, Broker Scammers, Trading Scammers, Latency, MM, fast algos, slow algos, hedge funds, and ALLLLLLLL that other fancy stuff.


What does any of this have to do with me, starring at the chart, and clicking the Buy and Sell button and making money per the risk I take?

Who cares about all that stuff, ALL I need is a Buy Button, Sell Button, and Chart with green and red bars?

I hope the market stays rigged or scam or slow, fancy algo, big time professionals, gangsters, all that fancy talk or whatever else you call it. What do my black ass care for? Just keep them ticks moving 23 hours a day.

I am only here for the money!!