beeker1121

Hey man I know how you feel. I'm 20 years old, been really focusing on learning how to trade the mini S&P for about a year now, and it's pretty much the only thing on my mind. I'll get out and do something maybe once every other week, but like you said, I'm always thinking about the market. In my opinion, you are definitely on the right track by not using any indicators. Price and volume are the only components of the futures market that you need to pay attention to; everything else is lagging. There is an immense amount of information you can gain by simply watching the reaction of price on a candlestick chart. If I could give some of advice that has helped me so much in trading, it is that you must have patience. I look at the market as kind of like card counting in blackjack. When you're counting cards, do you bet heavy when the odds are against you? No, you keep playing hands until the odds are in your favor, and then you bet big. In trading, if you don't have multiple reasons for why a trade should work, i.e. you only see some quick price action pattern, then why would you want to take that trade? Now on the other hand, if you see the price action pattern, and it's breaking a trendline, and it's in the direction of the trend, and you see a level of resistance or support it's near; that puts the odds in your favor, and whether or not it works, you have to take that trade because it's a GOOD trade. I'll be dropping by this thread often and I wish you the best in your trading.

Forsearch, I agree with you completely. I do not use the DOM due to the fact that it's not concrete; orders can be added and pulled of the book in an instant. Thank you DbPhoenix and BlowFish for confirming!

Well after a couple of good demo trading days that have really brought up my confidence, I would like to see if someone could confirm my beliefs. Since reading up on and spending a lot of time watching the tape live, and also going over previous days via camtasia, I feel like I may be just starting to get the general idea of it. I said in a previous post that I've been reading a book by Jesse Livermore entitled Reminiscences of a Stock Operator. This book has completely changed my way of thinking about the tape. This might help Brookwood, and it's my understanding of the tape, but please someone correct me if it's wrong because no one has told me out rightthat this is how it works. Say for instance say you see a green order go through on the tape on the ES at 1419.50 for 100 contracts. This means that there was both a buyer AND a seller at 1419.50, which was the Ask (because of the green color on the tape) at the time of the transaction. Brookwood asked: And this is the answer I have come to based on this whole discussion, and other things I have read. Please, do not consider this fact; if someone could please confirm this to be true, I'd appreciate it greatly. I thought the same way, that if I saw an order in red go through on the tape, this meant someone was selling, right? Vice versa for green orders. However, as stated above, this is not the case. On the ES (and this is much easier to see in MarketDelta although I don't like the program itself) you may see price approaching a previous high with 300, then 400, then 600, then 800 orders hitting the Ask with absolutely no one hitting the Bid, and think to yourself this is bound to break upwards, only to see it fall off a few points. Why did this happen? If so many orders were going through on the Ask, why didn't it break the high? We know that for every order we see go through, there is an equal buyer and a seller. If you see tons of orders going through on the Ask, with price making no impact upwards, then there must be some underlying supply at those higher prices that outweighs the demand. Otherwise, what would stop price from making new highs? And until that supply is taken out of the market and the imbalance switches to where the demand is greater than the supply, price is not going to make new highs. Eventually, if there are no more buyers and the supply is still there, the imbalance will stay the same where the supply is greater than the demand and the market will move down to lower prices seeking to attract buyers. What I have been paying attention to is not so much the number of orders going through, but what impact do the orders have on price. If I see price approaching a support or resistance level from the tape, I start to pay attention. Does price, when approaching resistance, break above? If it does, how does price react after this break? For price to continue, I would look for the market to be moving up easily with orders hitting the Ask and having a tough time moving down with orders on the Bid. If I see price moving up steadily even though orders are hitting the Bid, this is another indication. If price, however, approaches the high and some big orders go through without price struggling to make new highs and eventually coming back through the resistance level, then I would not look to trade that. I believe in a principle that Mr. Livermore stated, and it's that price will move in the path of least resistance. For a long time I would be focusing on trying to make something work for the market, but now I believe the right thing to do is let the market work for you. By that I mean have an extremely open mind when reading the tape, and don't try force anything with the market, just watch what it does, how it works, when this happens then this will usually happen, etc. The key is to look for patterns in price, and the best way I have been able to do this so far is look for short term S/R levels. If I see price hit 1419.00 on the way up, then it retraces a little bit and bounces off that level or near it again, I consider that a resistance point. I would then take note at what price does at this levels. The same for the down side. I feel kind of like the blind leading the blind here, so please everyone keep in mind that these are just my observations of the tape and how I think the market works. I would love for someone to confirm that this is accurate, and since no one has yet this is not set in stone for me! PHEW, ok I'm done.

smwinc, do have an answer for this? I think I know, however without being 100% positive I don't want to post anything in case it's not valid.

Thank you all for your responses and information, smwinc the visual representation helped a lot! I also found that elitetrader thread and will be reading that through. I haven't given much thought to incorporating the DOM along with the tape, due to the many games that are played. With the tape, these are actual orders that have gone through and nothing can change that, so that's what I've been focusing on the most. Harlequin, I've seen a couple Hubert's videos, one was on tape reading the YM, and I've been to the Trade the Markets site before and it's gotten my interest. Have you ever been in his chat room or studied under him? If so, did you find his information on tape reading to be helpful? I noticed that in Soultrader's and Hubert's videos on tape reading, both of them bracket price on the tape. I'm in the middle of reading Reminiscences of a Stock Operator by Jesse Livermore and he too, from what I understand, would try to bracket price between S/R levels and then watch how price reacted when it approached these levels. I'm going to start paying much more attention to this.

So when I'm looking at the tape and I see a trade going through at 1390.50 and it's colored green, that only means that the trade went through on the ask and not that it was someone buying, rather there was a buyer and a seller and it just happened to go through on the ask?

Hi, I'm becoming more and more interested in trading based on a time & sales window, a.k.a. reading the tape, but I have a lot of basic questions. It's my understanding that in the e-mini futures, the S&P for example, for each buyer there is an equal seller(s) and vice versa. However, whenever I look at the tape and see a buyer at say 1390.50, I do not see the equal seller going through at the same price. I was told by a friend that they only show one because they don't need to print it twice. If that's true, how is it decided whether a buy or sell order is shown on the tape? My goal is to hopefully gain enough skill in reading the tape that I can trade profitably with it, but as you can see I have a lot basic questions to get out of the way. I've read multiple books on the subject, the most popular like Tape Reading and Market Tactics, Techniques of Tape Reading, etc., so I have a good understanding of how accumulation/distribution, price testing and rejection, shake outs and the like work book-wise, but when I try to apply these principles in a live market I can't seem to make it work. I believe the main reason is I still have to learn the basics thoroughly. Lastly, are there any good books, courses, etc, that teach modern tape reading based off the time & sales window for the futures? Sorry for the long post and I appreciate any advice.

Thanks Soultrader. Right after I submitted this I saw the other thread, sorry about the multiple posts.

Hi, sorry to be posting about this again but I checked the video section and it's still not working for me. Is the server still down?

Hi, I'm a new member. I was searching about tape reading when I came across this site and the fantastic video section. First off, thanks to Soultrader for taking the time to make all of these videos; I can only imagine how much time it took. The problem I'm having is everytime I click on a video link, it's not able to find it. Are the videos currently on the site or have they been taken down? Thanks in advance!