Tell us how you spot tape painting
- Thread starter stock777
- Start date
I didn't know that's what you called it, but I go into all my trades initially assuming this is what's really going on.
You have to be familiar with the normal behavior of the market you're trading. When what you're seeing is really suspect and doesn't seem like natural orderflow it might be tape painting. Just because you misread a situation doesn't mean it's tape painting, however.
Sometimes they're painting the tape to create volume when a stock is totally dead... other times it's to incite panic. A lot of the time I see fake T(third market) prints that try to incite panic... like if it's a thin stock with a single bid everyone is leaning on for 5000 shares with a 20 cent price gap below it, I'll see a 5000 red T print go off at the price of the bid. If you had scanned a darkpool for a bid or offer before that print came, you wouldn't have found anything.
Today I saw a 30,000 share bid that had been sitting there for at least 15 in CHU cancel, and then print the 30,000 shares on a third market (instantaneously)... but since that bid had come in they kept selling in front of it so it kind of looked like a scam situation anyway. However, I don't think that the order switched destinations from Arca to X-Finder or Pipeline; most likely the guy just canceled his order and crossed was hitting his own orders on some third market. IT SEEMS like "they" believe they can get away with hitting their own paper more easily if it's from an entity that prints as T (third).
As far as fake prints on NYS and ecns if you see it stay away because it's probably a dead stock with one institutional guy sitting there BSing to generate orderflow which he'll always profit from. How do you tell? You tell after the fact if the created a perfect picture of a setup, and then after that what happens makes absolutely no sense from a natural orderflow perspective... generally you lose money, remember the stock and keep that mental image of the manipulation in store for later use.
If you don't know how to trade profitably off the tape and book you will have absolutely no way of knowing whether or not tape painting is going on. Trying to identify tape painting isn't useful, either. What is useful is looking through a skeptical perspective, always considering how someone with money might most effectively manipulate the prints, and then when you see what looks like for "the big guy" a setup that's ripe for manipulation, you stay away OR take advantage of other suckers lured in (most the time you can't do this... it's just you and the guy painting the tape trying to take your money).
Sometimes they're painting the tape to create volume when a stock is totally dead... other times it's to incite panic. A lot of the time I see fake T(third market) prints that try to incite panic... like if it's a thin stock with a single bid everyone is leaning on for 5000 shares with a 20 cent price gap below it, I'll see a 5000 red T print go off at the price of the bid. If you had scanned a darkpool for a bid or offer before that print came, you wouldn't have found anything.
Today I saw a 30,000 share bid that had been sitting there for at least 15 in CHU cancel, and then print the 30,000 shares on a third market (instantaneously)... but since that bid had come in they kept selling in front of it so it kind of looked like a scam situation anyway. However, I don't think that the order switched destinations from Arca to X-Finder or Pipeline; most likely the guy just canceled his order and crossed was hitting his own orders on some third market. IT SEEMS like "they" believe they can get away with hitting their own paper more easily if it's from an entity that prints as T (third).
As far as fake prints on NYS and ecns if you see it stay away because it's probably a dead stock with one institutional guy sitting there BSing to generate orderflow which he'll always profit from. How do you tell? You tell after the fact if the created a perfect picture of a setup, and then after that what happens makes absolutely no sense from a natural orderflow perspective... generally you lose money, remember the stock and keep that mental image of the manipulation in store for later use.
If you don't know how to trade profitably off the tape and book you will have absolutely no way of knowing whether or not tape painting is going on. Trying to identify tape painting isn't useful, either. What is useful is looking through a skeptical perspective, always considering how someone with money might most effectively manipulate the prints, and then when you see what looks like for "the big guy" a setup that's ripe for manipulation, you stay away OR take advantage of other suckers lured in (most the time you can't do this... it's just you and the guy painting the tape trying to take your money).
Do you believe the SEC would prosecute GS for tape painting in a thin listed or NASDAQ stock? Do you think the NYSE would try to get GS in trouble for tape painting if they witnessed it in their markets?
NY0BScalper seems to get it.
I watch some thin NYSE stocks regularly, and the crap they pull is beyond belief. Has to be illegal but no one cares.
NY0BScalper, whats with the away from market prints, I thought that was supposed to end with the new regs?
I'm at a slight disadvantage since I use IB and Ameritrades feed neither of which tag the prints . So I can't easily tell where they are printing.
But I can smell the paint a mile away, even the lead free stuff.
I watch some thin NYSE stocks regularly, and the crap they pull is beyond belief. Has to be illegal but no one cares.
NY0BScalper, whats with the away from market prints, I thought that was supposed to end with the new regs?
I'm at a slight disadvantage since I use IB and Ameritrades feed neither of which tag the prints . So I can't easily tell where they are printing.
But I can smell the paint a mile away, even the lead free stuff.
Away from market prints on ECNs are just from people sending orders inefficiently. Reg NMS just says route to the NBBO, it doesn't say you have to sweep the books on all market centers.
IMO if you want to watch the T&S you HAVE to see the identity. You're denying yourself extremely valuable information. Is that order refreshing or is someone BSing in a darkpool?