Is Tape Reading a Myth ?

[raymondmanny 10]

Hi ,

 

I just bought the 3 Jigsaw sofwares en December 2012 and want to share my experience.

 

After 2 years of webinars and research to improve my setups by probing various indicators and

techniques (name it, I know it) I began Tape reading.

But tape reading with the DOM and the Time and sales (NinjaTrader) is not an easy task.

 

I developed a technique which seemed efficient on the Emini-ES , but only in the night

session. I used the NinjaTrader replay accelerated mode and had mostly winners ( 9 of 10)

The night session is very slow and I never tried to trade it live;

and in the day session I couldn’t follow, the game was to fast….

 

One day I investigated Jigsaw Trading and I immediately saw that this 3 softwares were unique and would allow me to follow and anticipate the day session movements in the short term.

I viewed some No BS trading free videos, observed my 3 softwares in action and began to understand something.

I am a Beginner and I mostly win my one tick on the SIM (live) trade ( Emini -ZB ).

 

I bought the software the 19 of December 2012 and I am very pleased to see that it is really possible to anticipate the order flow in the very short term. But that is enough to make a few ticks.

 

So I am going to improve my technique and when the time comes I shall trade live…

 

I am not a seller but an enthusiastic Trader

 

Have a nice day,

Raymond Manny

[BlueHorseshoe 10]

I mostly win my one tick on the SIM (live) trade ( Emini -ZB ).

 

Does your strategy use limit orders in sim? Do you understand how limit orders get filled in sim?

 

BlueHorseshoe

[raymondmanny 10]

Hi,

 

I use market orders when the move seems very strong and limit orders in the other cases.

 

I would be very interested to know how NinjaTrader fills limit orders on the SIM.

It is my broker's real time SIM and not NinjaTrader's SIM.

 

Thank you,

 

Raymond Manny.

[BlueHorseshoe 10]

Hi,

 

I use market orders when the move seems very strong and limit orders in the other cases.

 

I would be very interested to know how NinjaTrader fills limit orders on the SIM.

It is my broker's real time SIM and not NinjaTrader's SIM.

 

Thank you,

 

Raymond Manny.

 

Hi Raymond,

 

If you use market orders you pay the spread each time, and any sim will show this, so your results should be fairly accurate provided the market is liquid. If the market is illiquid then the sim will struggle to show where you would have been filled. Try trading the futures contract J7 with a volume subpane to get a feel for what I mean - your sim will fill you at prices where only a single contract (someone else's, not yours!) traded. In reality you'd have suffered massive slippage.

 

The ES is sufficiently liquid, even outside of RTH, that I doubt this will be an issue.

 

If you use limit orders the sim will do one of the following, depending on how you have set it up:

 

1. Fills when price trades at the limit

2. Fill when price trades through the limit

3. Fills when a certain volume of orders have traded at the limit

 

Which of these is good? None of them. The first two are those typically used; the first will give you a far better performance than you'd actually get, while the second will give you a significantly worse (by an amount that will suprise you) result than you'd actually achieve.

 

Most platforms default to the first, as it gives you the illusion that you can trade better than you can, which means you'll make more for your broker when you move from sim to live trading. I know that the Infinity Futures / TransACT platform definitely defaults to the second approach. I am sure NinjaTrader support will be able to tell advise you regarding their platform.

 

To get an accurate representation of what would happen in real trading you need:

 

1. A method of estimating your position in the queue of limit orders resting on the exchanges books.

 

2. An automated method of executing orders in sim according to this estimation (this does not mean that your strategy needs to be automated - you can still trade on a discretionary basis - the automation will just control what happens after you've placed your order).

 

The first of these is not easy to arrive at.

 

BlueHorseshoe

BlueHorseshoe

[raymondmanny 10]

Hi,

 

I noticed that when I traded SIM with limit orders that I wasn’t necessarily filled when the price met the limit, nor at the second nor necessarily at the third. Sometimes I wasn’t filled at all and I cancelled the order. In that case a market order would have been necessary to not miss the trade.

But that is not a problem.

I used this technique live with the help of my indicators before tape reading. It worked well but when you have 3 winners and one loser you are even. So you work very hard for your broker’s pockets…

But reading the tape gives me better entries and I shall learn to use that skill for my exits also.

I am not in a hurry to lose my money so I observe and go on improving.

 

Thank you for your knowledge, are you a programmer ?

 

Have a nice day,

 

Raymond Manny.

[jiken 10]

Thanks for sharing, now I know what is Tape Reading about.

[raymondmanny 10]

You are welcome !

 

Raymond Manny

[BlueHorseshoe 10]

Hi,

 

I noticed that when I traded SIM with limit orders that I wasn’t necessarily filled when the price met the limit, nor at the second nor necessarily at the third. Sometimes I wasn’t filled at all and I cancelled the order. In that case a market order would have been necessary to not miss the trade.

But that is not a problem.

I used this technique live with the help of my indicators before tape reading. It worked well but when you have 3 winners and one loser you are even. So you work very hard for your broker’s pockets…

But reading the tape gives me better entries and I shall learn to use that skill for my exits also.

I am not in a hurry to lose my money so I observe and go on improving.

 

Thank you for your knowledge, are you a programmer ?

 

Have a nice day,

 

Raymond Manny.

 

Hi Raymond,

 

I can program to an reasonable standard, but I doubt that I would term myself a programmer. In terms of the challenges identfied in my post, in fact, the answer was not to try and program my way out of them (though I have absolutely no doubt that this is possible for those, as SIUYA puts it, "with more PhDs than assholes"), but to elevate myself above them by trading in higher timeframes. If you're gunning for an average profit per trade of $500 then you can afford to pay the market price and, should you lose money, be sure that it has nothing to do with unfilled orders and everything to do with you trading approach.

 

What I would say, if it's working for you 'on the ground' so to speak, is to continue but have a clear plan for what you will do if you run into difficulties.

 

Best of luck!

 

BlueHorseshoe

[Bidsandoffers 10]

No, tape reading isn't a myth, just most people don't understand what it is.

 

[ame=http://www.youtube.com/watch?v=BgCNuMVYzTY]Day Trading ES with DOM Order Flow - YouTube[/ame]

[raymondmanny 10]

You are right,

 

Thank you for the video and the link,

 

Raymond Manny

[Bidsandoffers 10]

The sad thing is that most people will look at that video and think 'oh that seems hard' or 'that style isn't for me'..... that's pure naivety through and through. If you're going to day trade, using the order flow on the DOM is the only way to trade if you're planning on trading for a living. If you go down on the floor of the various exchanges, you'll see all the locals trading like that. If you go onto the trading floor of any half decent prop firm, it's pretty much how everyone trades. All you see is a sea of DOM'S. If you don't accept that as a day trader you might as well quit and save yourself a lot of money and pain.

 

When I see threads like 'Is Anyone Make Money From Day Trading' - The answer is, if you're retail who's hell bent thinking they can apply technical analysis to day trading then no, you're not making a penny, or haven't made any consistent money for a few years. If you're going to go down the the road of applying technical analysis to day trading then you're literally just going to be handing all your money to the professionals and those who understand day trading is about the DOM. Ignore this advice at your own risk.

 

Here are some pictures of trading floors just from google image, you'll see DOM'S are what traders are starring at for their trades....

 

Big screens with the doms up at the CME exchange

 

 

 

 

 

 

[COTtrader 10]

Raymon,

 

Your limit orders were not filled on SIM due to your entry price not having been penetrated. While this is not always true in LIVE trading, it is true in SIM if your platform setup looks for price penetration before a fill. Price touch will not work but penetration by at least one tick is required.

 

COTtrader "Ken"

 

Hi,

 

I noticed that when I traded SIM with limit orders that I wasn’t necessarily filled when the price met the limit, nor at the second nor necessarily at the third. Sometimes I wasn’t filled at all and I cancelled the order. In that case a market order would have been necessary to not miss the trade.

But that is not a problem.

I used this technique live with the help of my indicators before tape reading. It worked well but when you have 3 winners and one loser you are even. So you work very hard for your broker’s pockets…

But reading the tape gives me better entries and I shall learn to use that skill for my exits also.

I am not in a hurry to lose my money so I observe and go on improving.

 

Thank you for your knowledge, are you a programmer ?

 

Have a nice day,

 

Raymond Manny.

[COTtrader 10]

I make money daily trading technical. Here is February 6 - premarket and open.

 

4 wins and 1 loss. Draw down is nearly non-existent. Stop loss is 4 ticks max.

 

These are not scalp trades but solid winners!

 

COTtrader

 

The sad thing is that most people will look at that video and think 'oh that seems hard' or 'that style isn't for me'..... that's pure naivety through and through. If you're going to day trade, using the order flow on the DOM is the only way to trade if you're planning on trading for a living. If you go down on the floor of the various exchanges, you'll see all the locals trading like that. If you go onto the trading floor of any half decent prop firm, it's pretty much how everyone trades. All you see is a sea of DOM'S. If you don't accept that as a day trader you might as well quit and save yourself a lot of money and pain.

 

When I see threads like 'Is Anyone Make Money From Day Trading' - The answer is, if you're retail who's hell bent thinking they can apply technical analysis to day trading then no, you're not making a penny, or haven't made any consistent money for a few years. If you're going to go down the the road of applying technical analysis to day trading then you're literally just going to be handing all your money to the professionals and those who understand day trading is about the DOM. Ignore this advice at your own risk.

 

Here are some pictures of trading floors just from google image, you'll see DOM'S are what traders are starring at for their trades....

 

Big screens with the doms up at the CME exchange

 

 

 

 

 

 

[Galacticus 10]

Sure it is.

 

Just like reading coffee grounds or lecanomancy or scyphomancy, etc ...