Tape reading?
- Thread starter prj
- Start date
?? There is "electronic" tape...
Sometimes I see this kind of price action in the futures: Prices driven up by selling 2 and buying 4 or down by buying 2 selling 4 (not exactly by those numbers, but you get the idea) . Are these bots in action? Seems so consistent, how can all the collection of bots converge on such specific behavior? Is there a dominant bot aggregating all the bots out there and controlling price action?
[I meant the price is driven one way by x and then taken the other by 2x, regardless of contract numbers being exchanged consistently for a large move.]
[I meant the price is driven one way by x and then taken the other by 2x, regardless of contract numbers being exchanged consistently for a large move.]
you're friend is having a similar experience to almost all tape readers. it has become incredibly difficult if not impossible for those who used to make money consistently off the tape.
however, there will always be some traders who are able to adapt. try tape reading, if it works for you, then to answer your question, yes it makes sense. if you are unable to profit, then find another method.
It's called Time&Sales. It's available on every platform, just not every platform has the correct feed. Try watching it on IB...good luck.
Just for everyones attention. If you are trying to read tape in stuff like the ES, you need some kind of size filters plus you have to have a consolidated tape for options as well as a tape for SPY and the biggest stocks.
A product like the ES is incredibly influenced by crossflow, meaning just because 8k contracts traded at a certain price does not mean its a directional trade.
Same problem with interest rates like GE and the Petro - Complex (Oil, NatGas)
For single stocks that are not in an index or other "standalone" products like the Ag futures, silver futures etc. timing your decisions based on the tape is golden.
If such is the case, you should stick to that and forget about everything else.
Any choice is self-imposed. Both have utility and are informative when viewed at the correct time.
What is the correct time?
To answer that question involves building distinctions one at a time from a wholistic perspective and methodical diligence starting at the basic granularity of market data - ie. How does a single bar build?
The set is finite and is composed of 25 variations.
When that set is compared and contrasted to the next bar, then there is a structural relationship that can be discerned through the pairs finite permutations. The bar pairs occur on both increasing and decreasing volume.
It’s work that has no shortcut and requires thinking to accomplish which most are unwilling to do. Until that work is done much time one will squander. Many attempt it just by the brute force of spending time in front of a screen, another might approach it through statistics, or trying a secession of indicators, charting platforms, etc, upon failing conclude that the thing itself at fault instead of their own misapplication of effort.
Observing market granularity all starts as noise and it can all become signal with the right mindset.
MotiveWave
Sponsor
Yes, nowadays, it would be Time & Sales in a platform. We've got it (MotiveWave), as well as Speed of Tape, which just tells you how fast it's moving.