Help understanding the Tape.

[Yigal 10]

Hi everyone,

 

I know that many of you read the tape and have an experience in interpreting it, I would like to know your opinion on the following action. The thing is that to me it just doesn't make any sense.

 

 

chart1.docFetching info...

chart2.docFetching info...

[Soultrader 12]

It doenst make sense at the moment because you do not understand what to look for and how to use it. Tape reading is not easy. You will need to devote a few months observing and staring at it until you start to see information relevant to your trading. You might want to start out by looking at the tape only when price reaches a certain key level. Watch how it behaves when price reaches there and keep an eye on bigger contracts that come across tape.

[Yigal 10]

  Soultrader said:

It doenst make sense at the moment because you do not understand what to look for and how to use it. Tape reading is not easy. You will need to devote a few months observing and staring at it until you start to see information relevant to your trading. You might want to start out by looking at the tape only when price reaches a certain key level. Watch how it behaves when price reaches there and keep an eye on bigger contracts that come across tape.

 

Thank you Soultrader for your answer, I have seen all of your tape videos, thanks again, very helpful!!! The thing is, I see large buying at the tops today and large selling at the bottoms it's in the attachments, THAT doesn’t make much sense to me, since today is all choppy and range bound, but again I am new to tape reading and that’s why I’d like to know your opinion on today’s action.

[Soultrader 12]

One thing that comes to mind is that you were not actually seeing selling but instead buying at the bottom. Those orders were basically limit orders. Did you see alot of contracts on the red without further price decline? Many times, longer timeframe traders will have orders set before hand.

[Yigal 10]

  Soultrader said:

One thing that comes to mind is that you were not actually seeing selling but instead buying at the bottom. Those orders were basically limit orders. Did you see alot of contracts on the red without further price decline? Many times, longer timeframe traders will have orders set before hand.

 

Thanks, didn’t think of it in this way. Appreciate your help.

[trader273 10]

Just an FYI, a lot of people wont open Word or Excel files. It is best to save your pic as a jpeg or png file.

[Yigal 10]

  trader273 said:

Just an FYI, a lot of people wont open Word or Excel files. It is best to save your pic as a jpeg or png file.

 

 

Thanks, next time will save and post in jpeg.

[keymoo 10]

Yes I won't open them for sure.

[Yigal 10]

 

 

Here.

[weiwei 10]

Yigal, on pic1 with stream of buying range from 648 to 651 and order stacking together on the bigger contract.(the one you circled). That usually mean all these big order rushing in to buy. usaully it should create market momentum.

 

However, big players know that people are monitoring their activities, and they will do any thing they can to hide their intentions.

 

For example: to buy 1000 contracts, they may buy 1500 and sell 500 alone the way to create chaos in the market to achieve that final 1000 numbers, and guess what, they do not have to achieve this all at same time, they can do it within a period of time, could be hours to days.

 

Bottom line: use tape as reference but be alert on its action. especially on low volume day. Once you look at it long enough, thing will start to pop out at you.

 

Another intertesting one on tape is you can ID short term SR on that market. You can some time spot price slamming on tape. It is actually quit fun to see how market in action.

 

weiwei

[notouch 10]

You make a good point weiwei. There are 2 reasons why tape reading may not be very reliable. The first is that as weiwei says it can be manipulated. You just as often see large orders at the end or middle of a big move as you do at the beginning. Some big players may have limit orders below 12500 for example, sell just above 12500 and then absorb the stops that get triggered. The other problem is that there aren't that many big players who trade YM. Most people who tape read follow the methods of Hubert from TTM but according to him a large order is any order above 10. Medium sized retail traders can easily trade lots of 10-50. Just because an order is over 10 doesn't mean it's institutional. If you want to see what the big players are up to you need to look at the ES tape where it's not unusual to see 500 lots coming though (equivalent to 1000 YM contracts). So the trades highlighted by Yigal could just be a few retail traders.

[Guest cooter]

Nice synopsis, notouch. Based on the tick value of YM ($5) vs. ES ($12.50), I'd have to say that 500 ES lots would be worth 1250 YM contracts (not 1000). In any event, your points are well taken.

[keymoo 10]

If you can REALLY read tape, the moves and patterns that it has, it seems to me to be the MOST reliable way of trading. Watching hubert trade using tape is amazing, his entries are very accurate and usually in the right direction. Yeah he gets stopped now and then, but most of the time he hits his daily target within the first hour of the day just reading tape and market internals. He calls himself "an order flow ho". LOL

[Guest cooter]

  keymoo said:

He calls himself "an order flow ho". LOL

 

That's too funny!!!

[notouch 10]

If you scalp for 5-10 ticks like Hubert then definitely tape reading is useful. For traders looking for larger intraday or multiday swings there are far better ways of reading price and volume.

[Nick1984 10]

Here's one out of left field: on the TS platform what are the white tape readings? Red and Green are self explanatory but whats the white one? Also whats the highlighted price signify?

[GCB 10]

  Nick1984 said:

Here's one out of left field: on the TS platform what are the white tape readings? Red and Green are self explanatory but whats the white one? Also whats the highlighted price signify?

 

Nick,

 

The white orders are orders between the bid and ask. Only happens when bid and ask are more that one tick apart.

 

The prints with the bright red and green foregrounds are trades below the bid or above the ask, respectively.

 

The prints with red and green backgrounds are supposed to show some kind of trend, but to me are just a distraction. You can turn that off on TS and I recommend doing so.