Quote from austinp:
This is not a gift or art: it is a learned skill-set from time spent watching live charts thru all market conditions. There is no possible way to teach reading the tape = flow... it is something that can only be learned from eyes to brain.
Absolutely. This is exactly what "gut feel" is. The more screen time you get, the more internalized patterns and crowd reactions to them become.
My first 3 months day trading I used a couple strategies I learned based on candlestick patterns. Although I had many fantastic trades and made excellent profits at first, I had very poor risk management and began losing by trying to make bigger profits too fast.
By the 4th month I'd added a few more strategies based on TA, threw in some slightly better risk management and had a couple small profitable months.
This year the months of screen time started to pay off. I still looked at TA for strong setup signals (especially S/R levels and trend lines), but had learned to "read" the L2/time & sales action to validate the signals.
I was doing this based on "gut feel". In my journal I would note "the L2 action got 'that look' and I decided to exit the trade". I met a prop trader who lived and died by the L2 action and we had a long conversation about it. It turned out that what I was experiencing as "that look" (gut feel) was actually various patterns in the tape that I'd internalized from hours and hours of screen time. So even though back then I couldn't put a name to it ("refresher, short signal invalidated, consider long"), I was still using it, eye-to-brain, having seen what happens again and again.
One of my biggest hurdles yet to overcome is trusting my gut feeling despite what my rational TA-based mind thinks. I still fight with myself. For example, I'll see a chart get a "look" that has breakout written all over it, yet won't put on a long position because it's trading at 52-week highs.
