Understandint The Tape At Key Pivots

[Soultrader 12]

Tape reading is one of the most useful skill to have in short term trading. Alot of the tape is noise and its important to understand how to filter out noise from vital information.

 

The key to reading tape is to practice. Practice makes perfect... and this is very true in tape reading.

 

I like to watch the tape as price reaches a critical pivot level. In this example, my trading plan was to watch for two pivots at the opening. The value high pivot at 12048 and the value low pivot at 12016.

 

As price opened and declined to test the value low pivot, I will time my entry using tape. Notice the tape at the critical pivot level. (see attachment)

 

We had a huge 80-lot come in with multiple 10+ lots at this area. For me the 80 lot was enough to confirm my entry point at 12016. (this column only shows lots of 10 or more)

 

Price then went on to lift. Tape reading requires fast eyes and fast hands. Master this skill and youre timing will be way ahead of most traders.

[namstrader 10]

Soultrader,

 

Could you possibily share how to set up the tape to show only the 10 or more lots? When I see the fast prints going by I seem to react impulsively and pull the trigger. Lots of fast 1 lots going by and I react when perhaps I need to learn better to read the tape. I sure wish my learning curve was further along!

 

Your sword is sharp and time will do the same for me;following along, behind your path, I am learning so much.

 

Thanks,

 

Mark

[Soultrader 12]

Hey Mark,

 

Open your time of sales. I usually like to plot the price and size only. Time is irrelevant.

 

Im assuming you use Tradestation. Right click on the time of sales and go to => Format Symbol.

 

In the section "Display" you should see a menu and check boxes. Set it to show trades >= 10. This should then give you a column for only 10-lots and above. I like to use two columns for the tape. The first one showing all trades and the second column showing 10-lots and above. This gives you an idea of the little guys vs big guys.

 

"Respect Your Enemy"

 

A 80-lot YM trader deserves a little respect don't you think?

 

See attachment of price action after the 80lot trader.

[namstrader 10]

excellent thanks again. I will be watching for your 90 lots to come on the tape real soon.

 

Sincerely,

 

Mark

[matdog 10]

Hello Soultrader,

I was wondering if you can teach us more tape reading patterns, such as price rejection.

thank you.

[Soultrader 12]

Hi matdog,

 

Im going to be doing a tape reading chat seminar sometime this week so make sure to check out the thread listed here and let me know if you can make it. The date is still undecided as I have been extremely busy lately but will try this week perhaps Friday.

 

The thread is here: http://www.traderslaboratory.com/forums/f53/tape-reading-chat-seminar-811.html

 

Soultrader