It would be extremely difficult to teach or describe "true" tape reading on a message board.
It's learned from experience and by having some sort of mentor.
It's learned from experience and by having some sort of mentor.
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tape reading
- Thread starter dr_ma
- Start date
As you might already be aware tape reading is an ancient way to decipher market movememnts or stock movements. The simplest tape reading method is ticking, where you just check the ticks.
However most people in the market are aware that many "proprietary" traders are familiar with tape reading, especially the market makers and specialists. So knowing this, and a little game theory and risk analysis they can "own" the stock by playing off the fact that the "little" guy is probably reading the tape.
All the specialist has to do is paint the tape and all the tape readers are doomed to buy into a huge short!!! Specialists arent the only culprits day traders as well paint the tape.
So tape reading is probably not a good way of deciphering a market.
The only use I have found from tape reading is spotting when a specialist is getting ready to make a move, basically small prints inside the inside market where the specialist is average buying or average selling. If you can see these prints and figure out what the specialist is trying to do then you have success. But It doesnt always work.
So drop the tape rading because there are tons of games that people can do now on the tape since everytihng is electronic and fast, allowing more games to be played, plus there are more suckers out there to get duped into thinking they are great tape readers.
Basically tape reading is like an after the fact "oh yeah now I see it" type of process. I mean even if you are reading the tape, the out come of the market is still foggy because you have so many traders reading the tape and so many traders doing their own stubborn little play.
Try to figure out the book rather than the tape!!! It is definitely better for risk-reward plays!!!
However most people in the market are aware that many "proprietary" traders are familiar with tape reading, especially the market makers and specialists. So knowing this, and a little game theory and risk analysis they can "own" the stock by playing off the fact that the "little" guy is probably reading the tape.
All the specialist has to do is paint the tape and all the tape readers are doomed to buy into a huge short!!! Specialists arent the only culprits day traders as well paint the tape.
So tape reading is probably not a good way of deciphering a market.
The only use I have found from tape reading is spotting when a specialist is getting ready to make a move, basically small prints inside the inside market where the specialist is average buying or average selling. If you can see these prints and figure out what the specialist is trying to do then you have success. But It doesnt always work.
So drop the tape rading because there are tons of games that people can do now on the tape since everytihng is electronic and fast, allowing more games to be played, plus there are more suckers out there to get duped into thinking they are great tape readers.
Basically tape reading is like an after the fact "oh yeah now I see it" type of process. I mean even if you are reading the tape, the out come of the market is still foggy because you have so many traders reading the tape and so many traders doing their own stubborn little play.
Try to figure out the book rather than the tape!!! It is definitely better for risk-reward plays!!!
Oh yeah who needs tape reading when you can trade NASDAQ stocks back and forth all day for a penny and still get rebates!!!!
That should be the ultimate question:
Why would anyone tape read when you can write a two thousand tickets in Dell and get instinet and btrade rebates?
Well ok its not an ulitimate question because there is only one answer:
I dont know, why would I rack my brain over something that I am probably never going to be good at because I dont have $20million in BP to paint the tape, when I can just mindlessly put up bids and offers onthe inside market and always get a print.
derr stop tape reading
That should be the ultimate question:
Why would anyone tape read when you can write a two thousand tickets in Dell and get instinet and btrade rebates?
Well ok its not an ulitimate question because there is only one answer:
I dont know, why would I rack my brain over something that I am probably never going to be good at because I dont have $20million in BP to paint the tape, when I can just mindlessly put up bids and offers onthe inside market and always get a print.
derr stop tape reading
Tape reading gives me a great edge, it's very energy consuming, but gives a great emotional and financial reward.
I increased my size to 3000-5000 shares recently, and now can also afford "probing", sending small (usually 100) share lots just to see how fast I get printed and what prices I get.
As to specific techniques, you have to remember that every specialist has it's own tricks. Also don't get mad if someone doesn't wish to share with you his edge, especially if it decreases his chances of making a living.
I increased my size to 3000-5000 shares recently, and now can also afford "probing", sending small (usually 100) share lots just to see how fast I get printed and what prices I get.
As to specific techniques, you have to remember that every specialist has it's own tricks. Also don't get mad if someone doesn't wish to share with you his edge, especially if it decreases his chances of making a living.
Quote from ari_veru:
Tape reading gives me a great edge, it's very energy consuming, but gives a great emotional and financial reward.
I increased my size to 3000-5000 shares recently, and now can also afford "probing", sending small (usually 100) share lots just to see how fast I get printed and what prices I get.
As to specific techniques, you have to remember that every specialist has it's own tricks. Also don't get mad if someone doesn't wish to share with you his edge, especially if it decreases his chances of making a living.
Very well put!!!
However Tape reading is not an edge it is a tool!! An edge is an advantage, and since I am sure everyone can read tape thus no advantage. Tape reading should be a tool or basis in developing an edge!!