techniques of tape reading

Quote from Ken_DTU:


the only area for improvement I'd state is, I'd say that it doesn't really cover technical "tape reading" strategies by my definition, eg I didn't see techniques for using time and sales patterns (transaction flow using a time/sales window) to identify breakouts... eg using blocks, tape speed, reading time and price patterns using the tape... that's tape reading in my opinion.
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We have covered this more than once on this forum. To avoid repeating:

http://www.elitetrader.com/vb/showthread.php?s=&postid=294084&highlight=tape+reading#post294084

http://www.elitetrader.com/vb/showthread.php?s=&postid=295500&highlight=tape+reading#post295500

http://www.elitetrader.com/vb/showthread.php?s=&postid=295518&highlight=tape+reading#post295518

http://www.elitetrader.com/vb/showthread.php?s=&postid=295534&highlight=tape+reading#post295534

This is answered in the book itself, too. Observing "last 2-3 min transaction flow in NVLS" will give you a rough idea for the next what, 1 min? 2 min? This could be useful for optimizing of point of entry at best, in terms of cents. I don't know what to write the book about if covering this aspect - it would be good for 1 page. Such definition strips tape reading to quite shallow and narrow method suitable only for several cents scalp. Meanwhile, it's a powerful way of reading the markets in any timeframe - but only when you forget pure T&S/Level 2 and go to the roots of this method.

Entire "prose" part is intended to lead the reader to perception of reality, to show him what it is to watch for in order to build the particular trade, and what is irrelevant, yet is being used by so many. It's a book about how to learn to trade.

As far as title goes - well, like I said before, book was supposed to be named A Trader's Jorney into Reality, with subtitle Revitalization of a Lost Art of Tape Reading...
 
hi threei,

any distinction for tapereading stocks vs futures made in the book ? if there are any ...

just got a message in my mailbox of your post , at the moment
i was going through 'tapereading.asp' on realitytrader.com :D

regs,

paulus
 
Hi paulus!

There is no examples with futs in the book, but here is my take on this matter.

First, the method itself is applicable to any freely traded market. Anything that is beeing traded on free competition basis is dictated by trader's emotions/perceptions, and tape reading is the method to read those.

Second, each market does have its particularities. Armed with the method of reading (no matter which method, btw) you need simply to adjust to particular vehicle you trade.

Third, I love the NQs in terms of my method of reading. They trade cleaner, with constant spread, with pronounced price/volume relation.

Fourth, there are some details one has to feel when trades futs. To name a few, stop trailing (if you go for more than scalp) should be done with bigger padding than with stocks, as futs just love to shake traders out by diving just under where most stops are located (probably this phenomenon is caused by less favorable pros/amauteurs ratio in futs). Buying pullbacks (shorting bounces) in trend usually pays off better than going to pure breakout/breakdown)... although this is not hard rule, there are plenty of examples of opposite. If going for small scalp on breakout, entry just before actual break usually works more consistenly than buying break itself... etc. I am not sure this kind oif things is easy to describe in a book or article, this is something trader starts to feel as he collects his personal experiences. Quite possible that everything I named is just my personal perception, and could be different for a trader with different style and objectives.
 
thanks threei,

very insightful response; as a newbie (started < 1year ago)
i learn from every of your posts;
(what a hell of a Sovjet Union story, i read yesterday ..)

regs,

paul
(belgium)
 
I failed to mention one very important thing I like about the futs. Imagine that as you progress with stocks, you want to increase the size you trade as your confidence grows and your system becomes all tuned up. At some moemnt you might run into question of liquidity - unless you trade monsters like MSFT/CSCO or heavy cheapies like XYBR, you will have troubles executing 5-10K shares. With futures there is no such limitation. Depth of the market is amazing, you can go to 10 or 50 contracts and still not run into slippage problem (well, unless you get caught into sharp spike caused by another swiss bank trainee leaning on a wrong button :)). This provides very smooth transition to bigger size as you move further in your learning curve.

Vad

PS. My friends and partners still squeeze mafia stories out of me when we meet on Expos :)
 
Quote from gaj:



the first 90 pages or so of the book are devoted to vadym's history, background, mistakes he's made, some general psychology stuff, and namedropping some old but amazing books that don't get referenced enough in modern financial books. i wish this had been smaller, but i understand the rationale - trying to get new readers into the book.
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Haven't read the book yet. Not sure if I'll ever get it -- these guys are daytraders right? not into that game. Still, just to comment, 90 pages in a 250 page book -- 35% -- seems like a bit much. Yet, this is basically quite a common approach taken by writers who, when it comes down to it, really don't have a whole lot to say. Quite popular in real estate books actually. You buy one to learn of actual techniques -- yes, no one's going to give the whole shop away, but then my expectations aren't very high anyway -- and you get all this pyschology 'filler' instead. That's not to say pyschology isn't important (hell, I consider it absolutely crucial), but when you name a book, "Techniques of Tape Reading", well, the honest thing to do discuss, well, techniques of tape reading. Okay, so this was a rookie effort, so you could probably forgive them.

At the end of the day, it's important to remember that just reading this book is hardly going to make your trading dreams come true, but you might get a couple of decent ideas from it, which is, unfortunately or not, all you can really expect from a trading book.

And no, writing this book probably won't go anywhere to making the authors rich. But getting eyeballs on their website? I bet that will.
 
"psychology filler"... "rookie effort"... "forgive them"... so much arrogance from someone who didn't even read it... oh boy... :)

How about reading just this thread where the story with the title was already discussed? At least to avoid big words about "honesty"... Sheeesh...
 
Quote from alfonso:



Haven't read the book yet.

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Vad told me a funny quote from his Russian communist times when some comments regarding publications were ridiculed without being read..went something like:

"I haven't read it but I'm sure disgusted"

Quote from alfonso:



At the end of the day, it's important to remember that just reading this book is hardly going to make your trading dreams come true.
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I just can't understand why the publisher wouldn't keep this bullet point promise on the front of the jacket cover. (and yes the sarcasm is pretty thick)
 
What, I'm getting double-teamed now? :)

Okay, sorry guys. On re-reading my post I can see it came out sounding far harsher than I ever intended.

Still, I know you're going to defend it, but it's my opinion that -- if the report is accurate (meaning I wouldn't have to have read the book) -- there is 90 pages of psycho/bio/filler before the "meat", then I, if I had bought the book, would consider that a bit of a let down.

And, pardon me Vad, but if you haven't written any other books previously, this would qualify as a "rookie effort", would it not?
 
Like I said before - I consider first part of the book to be more of "meat" than it's second and third part. And not because those don't worth their salt, but rather because I consider the stuff in first part to be more vital for trader's survival than any system. I wouldn't apply word "filler" to what it tells about. It's (again, like I said before) pure practical advises and tricks, not psychobabble on the "be calm, stay focused" kindergarten level.

On your second point... for people who write articles and columns and give seminars and lectures both live and online for years, I would have hard time to qualify the book as "rookie effort".
 
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