Can anyone give a definition of what is meant by tape reading and what strategies it is useful for (e.g. only useful for scalping, swing trading, day trading, etc.) is it meant to predict the next move or meant to estimate the strength of the current move, is it meant to determine resistance / support points, etc. Apologies in advance for this simple question.
What is tape reading?
- Thread starter mockingbird
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Can anyone give a definition of what is meant by tape reading and what strategies it is useful for (e.g. only useful for scalping, swing trading, day trading, etc.) is it meant to predict the next move or meant to estimate the strength of the current move, is it meant to determine resistance / support points, etc. Apologies in advance for this simple question.
Originally posted by mockingbird
We spend quite a bit of time with our traders teaching "tape reading" - and it is not an easy thing to teach.
Some of the basics that we use on a daily basis are: 1. Following a "short seller" down, hiting bids to help it
down, then buying the stock back from the short seller. 2. We find "trade throughs" create great opportunties on an almost daily basis. This happens when negotiated stock prices make for a single "block trade" to transpire, thus giving our traders the chance to participate with the Specialist. 3. We want our people to recognize the "players" in any given stock based on the tape (institutional involvement, day traders, etc.). 4. Understanding how stock bid and offer size is reflected by brokers/Specialists, and how the stocks generally react (going to and through size, vs. away from it, etc.).
Tape reading is primary to all stock trading, and is both a science and an art. I am proud to have some of the best in the business working within our ranks...to help the rest of us!
While neither are recent, I would second the reading of Humphrey Neill's and "Rollo Tape's" books. They may be old, but they can definitely help you learn the art of tape reading.
I'd also suggest Reminiscences of a Stock Operator by Edwin Lefevre. While it doesn't give clear tape reading tactics, Jesse Livermore (who the book is actually a biography of), was a tape reader and talks a lot about the mindset of tape reading.
Tape reading skills can be used in any timeframe, IMHO.
I use it by having an idea of where I want to enter the trade in advance. And then watch how the market reacts in that area in deciding on where, if at all, to get in.
I'd also suggest Reminiscences of a Stock Operator by Edwin Lefevre. While it doesn't give clear tape reading tactics, Jesse Livermore (who the book is actually a biography of), was a tape reader and talks a lot about the mindset of tape reading.
Tape reading skills can be used in any timeframe, IMHO.
I use it by having an idea of where I want to enter the trade in advance. And then watch how the market reacts in that area in deciding on where, if at all, to get in.
Don
I was at the March 18 class in Las Vegas and tape reading was barely covered during that class.
My question is: do you give separate instruction for actual Bright traders with regards to this aspect of trading? If yes, how do you go about teaching this? ( seminar, one on one, etc)
I was at the March 18 class in Las Vegas and tape reading was barely covered during that class.
My question is: do you give separate instruction for actual Bright traders with regards to this aspect of trading? If yes, how do you go about teaching this? ( seminar, one on one, etc)