Tape reading

day trading or intra day trading has been around since the dawn of exchanges, but today's technology brings that same opportunity to a much larger number of people.

Getting back to the topic of this thread, found two good examples of real-time tape reading from realitytrader:

http://www.realitytrader.com/classes/

On the same site there is 'Principles of Tape Reading' offered free if you register as a trial member

http://www.realitytrader.com/workbook.htm

disclosure: have no reln with realitytrader.com
 
I strongly recommend Tape Reading & Market Tactics by Humphrey B. Neill. It may have been written in 1931 but its relevance to today is staggering. Well worth reading at least once per month!

spike
 
Spike thanks for your reply--I will pick up Neill's book. Incredible there's not a newer version same subject-just incredible. If you get a chance would you please tell me how this book has helped you-thanks. Im also looking for information on lmt/mkt order strategy tactics-- when is it best to use which-in what situation etc.? Perhaps you know of a book-articles-web sites?
 
limbo
The books describes the general principles of how to interpret volume activity - how to assess supply/demand and the net result on price action. Excellent examples and some great insight into human nature. What amazed me though is how relevant it still is to trading today (despite being written in 1931)- smart money vs. the public. A fascinating read. I can now see far more in the volume chart and use this in my trading.

spike
 
has anyone read Neill's book? I would really appreciate a synopsis/summary before buying it. Thanks in advance

Also there is another book with a similar title on Amazon: "Studies in tape reading : a 1910 classic on tape reading & stock market tactics "
by Richard Demille Wyckoff

Any info on this one?
 
Hi All!

I have been trying to read the tape for the past couple of days and have noticed a couple of things I cannot interpret (of course I understand it takes like months if not more to perfect it but as in general...):

What I have been doing is watching 2.5 min chart and Time and sales side by side.

-NASDAQ- stock does move arround the "numbers" on T&S (seen on the chart)

-NYSE- theese discrepancies are bigger?! For ex. the stock may be bouncing tween 13.30 and .35 on the chart and on T&S I can see mostly prints .40 and .43 (dont hold me on that one cos its all kind blurry for me still, but I guess praetorian and the rest of you seniors will guess what im talking about).

Then I tried watching some slower, lower vol NASDAQ stock (like my ANDW play) but it was just slow and not miving. So I put on a CSCo tape....man, like zillion numbers flying at the speed of light.
As a matter of fact I did manage to spot some support/res levels but mainly cos I cheated and gglanced at the chart...

And another thing puzzling me is : why doesnt the stock go up on the chart when I see a lot of green prints? Im guessing theres more supply right?!

Its still all kinda confusing so any guidance as to what to look for and what stocks to practice it on?

Sincearly,
Alex

UPDATE : after some thinking - when we're looking to go long, im guessing that we would want to see s lot of red prints but WITHOUT the oprice falling right? Cos it would take out the inside ask so the next ask is going to be higher thus the price should go up and we go long...hrmmm...:confused:
 
P2

I have both books. Did not find anything in them I hadn't read somewhere else. What you say about the way you trade is the way I feel. You can read every book out there but the best thing you can do is watch the market day in and day out until "intuition" developes. I think most good traders cant explain exactly how they do it, they just do it.
 
P2 if you wouldn't mind elaborating, could you tell me what you meant when you used this term "air pockets" when describing situations you are watching to determine how a specialist trades a stock. I am not familiar with this term.
Thanks
 
neo =)

Originally posted by neo_hr
-NYSE- theese discrepancies are bigger?! For ex. the stock may be bouncing tween 13.30 and .35 on the chart and on T&S I can see mostly prints .40 and .43 (dont hold me on that one cos its all kind blurry for me still, but I guess praetorian and the rest of you seniors will guess what im talking about).
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the chart and the T&S should look the same because the chart is just a visual representation of T&S.. what you may be seeing is the Chart only charting prints from the NYSE while the T&S is including prints from other exchanges like chicago and NASD.. just a guess..

Originally posted by neo_hr
So I put on a CSCo tape....man, like zillion numbers flying at the speed of light. As a matter of fact I did manage to spot some support/res levels but mainly cos I cheated and gglanced at the chart...
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csco is one of the worst stocks to use for a beginner.. its too thick to make a substantial move and trades too much volume to get a feel for its movement unless its up/down on extremely high volume.. btw, looking at the chart isnt cheating.. the chart is where support and resistance are formed.. jumping into a nasdaq stock every time you see a big bid that looks like support is a losers game..

Originally posted by neo_hr
And another thing puzzling me is : why doesnt the stock go up on the chart when I see a lot of green prints? Im guessing theres more supply right?!
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you answered your own question =)..

Originally posted by neo_hr
Its still all kinda confusing so any guidance as to what to look for and what stocks to practice it on?
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this is how i like to think.. perhaps others could also share their viewpoints.. first i look at the chart.. when the chart signals an entry, then i look at the level 2 screen to find the best place/time to get in.. i set my stop, and generally let the trade work itself out unmolested.. either it stops me, or it moves toward my profit target.. now, concerning what stocks to watch.. i recommend reasonably inexpensive stocks (5-30 dollars) that trade at least a couple million shares a day.. i have a list of about 400 that i scan constantly throughout the day.. =)

Originally posted by neo_hr
UPDATE : after some thinking - when we're looking to go long, im guessing that we would want to see s lot of red prints but WITHOUT the oprice falling right? Cos it would take out the inside ask so the next ask is going to be higher thus the price should go up and we go long...hrmmm...:confused
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lol.. (as we say in georgia).. "like a new calf looking at a gate for the first time.." try to remember, this is not pinball.. its not super mario brothers.. its not Tekken 3.. bids and asks come and go.. prints go off here and there and back again.. sometimes the bid collapses and the stock falls a point.. other times, it collapses and arca will hold it with 100 shares for 5 minuites and then run the stock up.. other times, it collapses and comes back, 20 minuites later the stock hasnt moved.. dont try to game the momo.. trade the chart.. =)

just my opinion =)

-qwik
 
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