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carltonp

Tape Read (Time & Sales) Strategies

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Hello Traders,

 

I wonder if you can help. I've spent the last few days trying to track down information on tape reading (time and sales) strategies. I searched the four corners of the internet and trying to find suitable information buth nothing.

 

Just to prove to you how little information there is out there I found one site, http://www.priceactionroom.com, charging $1995 for a DVD called 'The Magic of Tape Reading'. This blew me away. I thought how can they justify that price tag? Then I thought, 'of course they can, they know there isn't anything out there on Tape Reading'. Don't get me wrong, the DVD might be the Holy Grail of Tape Reading, but I'm not ready to pay that kind of money until someone has reviewed it and gives it the thumbs up.

 

I watched all of soultraders videos (there are good and they give you a taste, but no real meat on the bones).

 

So if there is anyone here that can point me in the right direction, I'd appreciate it.

 

Cheers guys/gals

 

Carlton

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Hi,

 

There really isn't any in-depth info out there on tape reading involving making trade decisions from bid / ask / time & sales screens (e.g. DOM, market depth and so on). Yet, you do have easily available tools to learn it on your own such as finding a screen video recorder to record your the live streaming real-time data on your screens with your charts to help you quickly learn about the flow from one price level to another.

 

Also, have you visited Youtube to check the videos on "Tape Reading" even though many have horrible visuals (difficult to see by those not using a good video recorder). They can at least give you an idea of what type of info your should be doing in your own live recordings at the minimum.

 

You can then post your own videos on Youtube for linking to whenever you have questions at any forum about tape reading. My point, you'll get a much better response (replies) when you share your own recorded videos with your questions because tape reading is one of those odd topics that requires videos for communication while learning in my opinion.

 

Simply, your own videos will contain the "real meat on the bones" and someone can then use that info to help you concentrate on specific info within your videos.

 

P.S. I'm not a tape reader. I'm just trying to inform you that you need to start doing video recordings of the tape and charts that's occurring on your own monitors if you want to be serious about tape reading.

 

Hello Traders,

 

I wonder if you can help. I've spent the last few days trying to track down information on tape reading (time and sales) strategies. I searched the four corners of the internet and trying to find suitable information buth nothing.

 

Just to prove to you how little information there is out there I found one site, Welcome to the Price Action Room, charging $1995 for a DVD called 'The Magic of Tape Reading'. This blew me away. I thought how can they justify that price tag? Then I thought, 'of course they can, they know there isn't anything out there on Tape Reading'. Don't get me wrong, the DVD might be the Holy Grail of Tape Reading, but I'm not ready to pay that kind of money until someone has reviewed it and gives it the thumbs up.

 

I watched all of soultraders videos (there are good and they give you a taste, but no real meat on the bones).

 

So if there is anyone here that can point me in the right direction, I'd appreciate it.

 

Cheers guys/gals

 

Carlton

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Hi,

 

There really isn't any in-depth info out there on tape reading involving making trade decisions from bid / ask / time & sales screens (e.g. DOM, market depth and so on). Yet, you do have easily available tools to learn it on your own such as finding a screen video recorder to record your the live streaming real-time data on your screens with your charts to help you quickly learn about the flow from one price level to another.

 

Also, have you visited Youtube to check the videos on "Tape Reading" even though many have horrible visuals (difficult to see by those not using a good video recorder). They can at least give you an idea of what type of info your should be doing in your own live recordings at the minimum.

 

You can then post your own videos on Youtube for linking to whenever you have questions at any forum about tape reading. My point, you'll get a much better response (replies) when you share your own recorded videos with your questions because tape reading is one of those odd topics that requires videos for communication while learning in my opinion.

 

Simply, your own videos will contain the "real meat on the bones" and someone can then use that info to help you concentrate on specific info within your videos.

 

P.S. I'm not a tape reader. I'm just trying to inform you that you need to start doing video recordings of the tape and charts that's occurring on your own monitors if you want to be serious about tape reading.

 

Yes I've watched a number of videos, but none really have strategies with any depth. I'm putting together a video as you suggested...

 

Cheers

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My developing intra-day strategy is also based around confirmation by the tape. Its very difficult to find good information on this topic. I have spent the money and I'm taking an online course developed by a NY prop desk for its traders on tape reading. I've also read the book by one of the partners, an excellent read and unlike anything I've read to date. The course is based around intra-day equity trading however its still applicable to index futures, or any liquid issue. In fact i would almost argue that index futs may be easier for a trained tape reader.

 

By the way, for index futures generally the tape is only the time and sales. For equities you need to also use the depth of market. The DOM is pretty much useless on its own for the index futures.

 

PM me and I'll give you details.

 

Read the old stuff for sure, Edwin Lefèvre, Wyckoff, and anyone else that is known for reading tape.

 

Indicators will come and go, but the tape doesn't lie. The markets might have changed in how the handle the orders but they still need to 'print' the them. Whether you are buying a breakout or selling a failure, the tape can tell you if the market has the momentum to do what you need it to do to be profitable in your plan.

 

If you want to learn how to read the tape, open up the time and sales window on a front month futures contract, put on your favorite music, turn it up really loud, or even better use headphones and watch. Don't use a chart. Write down numbers where you think the market stalls, slows down, reverses, speeds up...whatever. Calculate the pivot points and watch what happens around those numbers. Write down the prior close, the current open. Get zoned in so all you can do is focus on the numbers. Keep a daily diary of your thoughts and observations. Do this for two months and if you can't see the order flow you never will.:2c:

 

 

Cheers,

 

 

 

XS

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My developing intra-day strategy is also based around confirmation by the tape. Its very difficult to find good information on this topic. I have spent the money and I'm taking an online course developed by a NY prop desk for its traders on tape reading. I've also read the book by one of the partners, an excellent read and unlike anything I've read to date. The course is based around intra-day equity trading however its still applicable to index futures, or any liquid issue. In fact i would almost argue that index futs may be easier for a trained tape reader.

 

By the way, for index futures generally the tape is only the time and sales. For equities you need to also use the depth of market. The DOM is pretty much useless on its own for the index futures.

 

PM me and I'll give you details.

 

Read the old stuff for sure, Edwin Lefèvre, Wyckoff, and anyone else that is known for reading tape.

 

Indicators will come and go, but the tape doesn't lie. The markets might have changed in how the handle the orders but they still need to 'print' the them. Whether you are buying a breakout or selling a failure, the tape can tell you if the market has the momentum to do what you need it to do to be profitable in your plan.

 

If you want to learn how to read the tape, open up the time and sales window on a front month futures contract, put on your favorite music, turn it up really loud, or even better use headphones and watch. Don't use a chart. Write down numbers where you think the market stalls, slows down, reverses, speeds up...whatever. Calculate the pivot points and watch what happens around those numbers. Write down the prior close, the current open. Get zoned in so all you can do is focus on the numbers. Keep a daily diary of your thoughts and observations. Do this for two months and if you can't see the order flow you never will.:2c:

 

 

Cheers,

 

 

 

XS

I working on your suggestions as I write this..... thanks dude

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Looking forward to hearing your thoughts Carlton. We can keep a discussion going on this topic for a while.

 

Next week I would be happy to record some SCREEN video and then try to upload something useful to see around some big numbers on the Asian market opens.

 

 

XS

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That's a great exercise and something I should have been specific about. Whe you observe the market on the tape be sure to take note of the low and high realized. They will change as the market swings. Also take note how sometimes the price will "pop" up or "drop" down as the bid and ask are swept at various levels.

 

Other things to watch that I learned from Wyckoff, watch the big numbers and the effect they have on the supply, do they change the price or it's business as usual for the order flow? As well, where are the small orders? Are they on the bid or offer and when?

 

Cheers,

 

 

XS

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learn it on your own such as finding a screen video recorder to record your the live streaming real-time data on your screens with your charts to help you quickly learn about the flow from one price level to another.

 

I've been using a free screen video recorder, and have gotten into the habit of recording every one of my trading sessions. I find it very helpful to review how I traded; what I did right, what I did wrong. With the recorded video, I can replay a mistake that I made over and over and over again, and analyze every split second if I need/want to. It's a totally different perspective than staring at static historical charts.

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Looking forward to hearing your thoughts Carlton. We can keep a discussion going on this topic for a while.

 

Next week I would be happy to record some SCREEN video and then try to upload something useful to see around some big numbers on the Asian market opens.

 

 

XS

 

XS,

 

I would love to work with you on a few ideas I have. I'm going to create a Excel formula to pump data into a Times and Sales window. The possibilities are endless once I create it. If its ok with you with you I will be picking your brains, and others here at TL, to comment on the new spreadsheet.

 

Cheers

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XS,

 

I would love to work with you on a few ideas I have. I'm going to create a Excel formula to pump data into a Times and Sales window. The possibilities are endless once I create it. If its ok with you with you I will be picking your brains, and others here at TL, to comment on the new spreadsheet.

 

Cheers

 

Great idea, this could be a good substitute for my IB time and sales window, can that be done? Can excel take streaming data from IB and display it?

 

XS

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Great idea, this could be a good substitute for my IB time and sales window, can that be done? Can excel take streaming data from IB and display it?

 

XS

 

Absolutely. Everything I've talked about is through Excel. I intend to take the IB Time and Sales data and have that fed into Excel. I will keep you posted on progress.

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Absolutely. Everything I've talked about is through Excel. I intend to take the IB Time and Sales data and have that fed into Excel. I will keep you posted on progress.

 

Cool, take note that i edited another post on the time and sales thread and included the adjustment that can be made for IB to use calculated volume or 'true tick' volume. You cannot see the true size traded but you can see each time the price changes. This can be better for intra-day futures trading because it eliminates some of the noise that roll over creates.

 

Cheers,

 

 

XS

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Cool, take note that i edited another post on the time and sales thread and included the adjustment that can be made for IB to use calculated volume or 'true tick' volume.

 

XS

 

XS, can you provide a link to that thread - sounds interesting.

 

Cheers

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This is not tape reading--what he's doing can be accomplished by using a breakout of a bar. He used a 20 second range. Why not just use 20 second bars, and buy/sell a break of the high/low? Tape reading is about more than bracketing highs and lows--if you can see it in a bar chart, then you don't need the tape for it.

 

What watching the tape will tell you that a bar chart will not, is how many transactions are being executed (though volume will tell you this as well), whether they are buy or sell orders (which delta will tell you), and roughly how fast the orders are being executed. For example, without a time and sales window, you cannot see that buyers are buying 86.00, yet 86.00 does not go bid. You simply see price stalling at 86.00. With a volume histogram and delta, you can see basically what's happening with the T&S, but having the tape open makes for an easy visual reference.

 

I would recommend to not just watch the tape by itself, but rather use it at areas you identify on your chart as areas of interest. I'm sure some people can do it, but why use it by itself, when you can use it simply as confirmation? For example, if you see support at 85.50, when price dips to there, notice what happens--do sellers aggressively short at this area? Are there heavy bids on the DOM that are clearly not spoofing, buyers who genuinely want to buy? Does price barely budge even though the volume is heavy? Do they try to sell it off twice, and then the second time the momentum of the tape is slower, volume is generally lower, and more buyers are buying the offer? These things are IMO how tape reading can be beneficial.

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This is not tape reading--what he's doing can be accomplished by using a breakout of a bar. He used a 20 second range. Why not just use 20 second bars, and buy/sell a break of the high/low? Tape reading is about more than bracketing highs and lows--if you can see it in a bar chart, then you don't need the tape for it.

 

What watching the tape will tell you that a bar chart will not, is how many transactions are being executed (though volume will tell you this as well), whether they are buy or sell orders (which delta will tell you), and roughly how fast the orders are being executed. For example, without a time and sales window, you cannot see that buyers are buying 86.00, yet 86.00 does not go bid. You simply see price stalling at 86.00. With a volume histogram and delta, you can see basically what's happening with the T&S, but having the tape open makes for an easy visual reference.

 

I would recommend to not just watch the tape by itself, but rather use it at areas you identify on your chart as areas of interest. I'm sure some people can do it, but why use it by itself, when you can use it simply as confirmation? For example, if you see support at 85.50, when price dips to there, notice what happens--do sellers aggressively short at this area? Are there heavy bids on the DOM that are clearly not spoofing, buyers who genuinely want to buy? Does price barely budge even though the volume is heavy? Do they try to sell it off twice, and then the second time the momentum of the tape is slower, volume is generally lower, and more buyers are buying the offer? These things are IMO how tape reading can be beneficial.

 

 

That is brilliant mate. You've given me so much food for thought. Excellent.

 

Josh, while I'm here I have question that you might be able to help me with, or I might just submit a new thread altogether.

 

Anyway, part of my system is observing the 30 Dow components to help determine a reversal or a pullback on the two minute time interval.

 

Almost without failure my system will alert me to when run on the YM is either about pullback and continue in the direction from where it came, or reverse entirely. Either way the system will let me know when the move has slowed down. The question is, is it common for YM to pullback/reverse when all 30 stocks have either been overbought or oversold? This is happening with such regularity that I don't think its just luck.

 

The reason I have submitted such this thread is because my system, as it stands won't, quite often fails to assist me determining if the slowdown is a simple pullback followed by a continuation or a complete reversal. The main reason why the system has proved profitable is because I exit as soon as I'm wrong. I must say, I never believed it at first, but its so true when professionals say that you can have double the amount of losers to winners and still come out on top.

 

Anyway, what do you think about my question?

 

Cheers

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Great idea, this could be a good substitute for my IB time and sales window, can that be done? Can excel take streaming data from IB and display it?

 

XS

 

Taken be til 2am, but I think I now have Time and Sales in Excel, streamed from IB. Will test it tomorrow when market opens. If it works the possibilities are endless, in terms of what events I could program the spreadsheet for.

 

Will keep you posted....

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This is not tape reading--what he's doing can be accomplished by using a breakout of a bar. He used a 20 second range. Why not just use 20 second bars, and buy/sell a break of the high/low? Tape reading is about more than bracketing highs and lows--if you can see it in a bar chart, then you don't need the tape for it.

 

What watching the tape will tell you that a bar chart will not, is how many transactions are being executed (though volume will tell you this as well), whether they are buy or sell orders (which delta will tell you), and roughly how fast the orders are being executed. For example, without a time and sales window, you cannot see that buyers are buying 86.00, yet 86.00 does not go bid. You simply see price stalling at 86.00. With a volume histogram and delta, you can see basically what's happening with the T&S, but having the tape open makes for an easy visual reference.

 

I would recommend to not just watch the tape by itself, but rather use it at areas you identify on your chart as areas of interest. I'm sure some people can do it, but why use it by itself, when you can use it simply as confirmation? For example, if you see support at 85.50, when price dips to there, notice what happens--do sellers aggressively short at this area? Are there heavy bids on the DOM that are clearly not spoofing, buyers who genuinely want to buy? Does price barely budge even though the volume is heavy? Do they try to sell it off twice, and then the second time the momentum of the tape is slower, volume is generally lower, and more buyers are buying the offer? These things are IMO how tape reading can be beneficial.

 

Dear joschdance

You sound knowledgable

Two questions

Would a tick by tick chart not give you the same info?

Is the tape useless without corresponding volume?

Regards

bobc

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I would recommend to not just watch the tape by itself, but rather use it at areas you identify on your chart as areas of interest. I'm sure some people can do it, but why use it by itself, when you can use it simply as confirmation?

 

My recommendation to focus solely on the tape, was for someone learning how to read tape, not trade off it. I use the tape for confirmation, i use the charts to identify the setups, levels etc.

 

I don't think one can learn to read tape with the distraction of a chart. That's why i suggested writing the levels down.:2c:

 

To each their own, whatever works for ya mate!

 

XS

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Would a tick by tick chart not give you the same info?

 

The smaller time frame or period the chart, the more information you will see, and with a small tick or volume chart, yes, you will see a closer picture to what the tape will show. I keep a tick chart open for this reason, to have a very quick look at the "historical tape" for the last minute or so (as the time and sales will only show about 80 transactions on a typical screen). However, time and sales will give you an immediate visual of bid/ask to go along with that, and for that reason I keep it open.

 

Is the tape useless without corresponding volume?

 

I don't quite understand the question. If you mean the "volume" column to see the number of shares/contracts traded in the time and sales window, then, it's not useless without it, but I see no reason to not display the volume.

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I don't quite understand the question. If you mean the "volume" column to see the number of shares/contracts traded in the time and sales window, then, it's not useless without it, but I see no reason to not display the volume.

 

Hi joshdance

I trade the South African Top 40 index future. Its like forex. There is no volume available.

Regards

bobc

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Hi joshdance

I trade the South African Top 40 index future. Its like forex. There is no volume available.

Regards

bobc

 

I am not familiar with this--if it's traded on an exchange and there's no volume information available,I would not trade it. At least with interbank currencies there are the futures equivalents which have volume, and can serve as a good proxy (for example, EURUSD = 6E at the CME), but if there's no volume information available I would not trade it.

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However, time and sales will give you an immediate visual of bid/ask to go along with that, and for that reason I keep it open.

 

 

 

Interesting, i use the DOM for the B/A. I only use the T&S for the prints, the size and occasionally the time. I don't think you are a trader that really uses the tape as most index scalpers that I'm familiar with do. I think you are a chartist, and have little interest in the order flow.

 

XS

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Interesting, i use the DOM for the B/A. I only use the T&S for the prints, the size and occasionally the time. I don't think you are a trader that really uses the tape as most index scalpers that I'm familiar with do. I think you are a chartist, and have little interest in the order flow.

 

XS

 

"The tape" is time and sales, it is not the DOM. The DOM represents orders, which can be changed. Time and sales are the tape, they are transactions that have occurred. "Reading the tape" does not rely on a depth of market, though I do use a DOM to try to get a clearer picture.

 

Don't know if it's been mentioned by the way, but if you use IB for data, their time and sales data is not accurate at all. Their ticks are filtered, and you need a more accurate, unfiltered data feed such as IQFeed if you want the actual transactions. IB will combine transactions, for example.

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"The tape" is time and sales, it is not the DOM. The DOM represents orders, which can be changed. Time and sales are the tape, they are transactions that have occurred. "Reading the tape" does not rely on a depth of market, though I do use a DOM to try to get a clearer picture.

 

Don't know if it's been mentioned by the way, but if you use IB for data, their time and sales data is not accurate at all. Their ticks are filtered, and you need a more accurate, unfiltered data feed such as IQFeed if you want the actual transactions. IB will combine transactions, for example.

 

Yes, that was my point with the T&S, i thought you seemed confused. I know what it is. You were the one that said you could read the B/A off the T&S, not me.

 

IB now has 'true tick' volume.

 

XS

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This marks a sharp jump from the 35% risk estimated just last month—and more than double January’s 20% projection. J.P. Morgan issued a bleaker outlook, now forecasting a 60% chance of recession both in the US and globally.   Global Leaders Respond as Trade Tensions Deepen   The dramatic market sell-off was triggered by China’s sweeping retaliation to a new round of US tariffs, which included a 34% levy on all American imports. Beijing’s state-run People’s Daily released a defiant statement, asserting that China has the tools and resilience to withstand economic pressure from Washington. ‘We’ve built up experience after years of trade conflict and are prepared with a full arsenal of countermeasures,’ it stated.   Around the world, policymakers are responding to the growing threat of a trade-led economic slowdown. Japanese Prime Minister Shigeru Ishiba announced plans to appeal directly to Washington and push for tariff relief, following the US administration’s decision to impose a blanket 24% tariff on Japanese imports. He aims to visit the US soon to present Japan’s case as a fair trade partner.   In Taiwan, President Lai Ching-te said his administration would work closely with Washington to remove trade barriers and increase purchases of American goods in an effort to reduce the bilateral trade deficit. The island's defence ministry has also submitted a new list of US military procurements to highlight its strategic partnership.   Economists and strategists are warning of deeper economic consequences. Ronald Temple, chief market strategist at Lazard, said the scale and speed of these tariffs could result in far more severe damage than previously anticipated. ‘This isn’t just a bilateral conflict anymore — more countries are likely to respond in the coming weeks,’ he noted.   Analysts at Barclays cautioned that smaller Asian economies, such as Singapore and South Korea, may face challenges in negotiating with Washington and are already adjusting their economic growth forecasts downward in response to the unfolding trade crisis.           Oil Prices Sink on Demand Concerns   Crude oil continued its sharp slide on Monday, driven by recession fears and weakened global demand. Brent fell 3.9% to $63.04 a barrel, while WTI plunged over 4% to $59.49—both benchmarks marking weekly losses exceeding 10%. Analysts say inflationary pressures and slowing economic activity may drag demand down, even though energy imports were excluded from the latest round of tariffs.   Vandana Hari of Vanda Insights noted, ‘The market is struggling to find a bottom. Until there’s a clear signal from Trump that calms recession fears, crude prices will remain under pressure.’   OPEC+ Adds Further Pressure with Output Hike   Bearish sentiment intensified after OPEC+ announced it would boost production by 411,000 barrels per day in May, far surpassing the expected 135,000 bpd. The alliance called on overproducing nations to submit compensation plans by April 15. Analysts fear this surprise move could undo years of supply discipline and weigh further on already fragile oil markets.   Global political risks also flared over the weekend. Iran rejected US proposals for direct nuclear negotiations and warned of potential military action. Meanwhile, Russia claimed fresh territorial gains in Ukraine’s Sumy region and ramped up attacks on surrounding areas—further darkening the outlook for markets.   Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Andria Pichidi HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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