Question About Time & Sales

[BlowFish]

	Quote:	tradertomdotnet
	on the Emini ladders there is no way to tell how much wil; trade at a "level" esp during a new event. Stops are needed...!!

Indeed, however trading need not be about predicting. Monitoring what is happening now and taking appropriate actions based on that will get you a long way.

You can see a price being supported as it happens in real time for example by volume passing across the tape but the inventory being 'restocked' (i.e the bid or ask does not lift). Also the tape is great for judging changes in pace right as they happen.

All sorts of interesting stuff goes on in the order book too though I must be honest I don't watch it currently. Of course there are shenanigans all the time as it is simply people 'advertising' and unless hit they can close shop and walk away. Mind you that might tell some people something in and of itself.

One thing I have noticed that a huge amount of time price tends to move towards size i.e. the thicker side of the book. Many find this counter intuitive. There are plenty of other patterns and characteristics that people talk about every now and then too.

Currently I look at a small interval tick chart (constant volume would do or even perhaps a small interval time bar) to see what is happening in 'real time'. That is not to say that I have not given up on learning to read the 'pure' tape.

Good quotes as always btw DB

[Harlequin]

beeker1121,

Yes I have been in the trading room and yes I learnt a lot about tape reading from Hubert. When it comes to paying for the service the question really is, does it meet your needs? Hubert normally does a tape reading lesson on a Thursday or Friday morning so if your paying for the room just for that then it's not going to be very good value for you. The best advice I can give is to take the 2 week trial and make sure you spend the time going through the video archives as there is a ton of information there, you can't go wrong for $5. Take notes and after that as I said before it's about how much screen time you put in, it may be simple but it isn't easy. It most likely will take several hours a day for 3 - 6 months before you get good at it.
If you search this and other forums you'll find many opinions on Trade The Markets both good and bad, my guess is that most of the complaints are from people who expected success handed on a plate and were not prepared to put the hard work in.
Bottom line is to quote another thread "do your own due diligence and be weary of anything involving money"

PS "bracket price between S/R levels and then watch how price reacted when it approached these levels"
That's a good starting point.

[BlowFish]

Hi Harlequin, When Hubert talks about reading the tape are we talking about using T&S? Seems that it means slightly different things to different people.

On the whole trade the markets seem to have a good reputation as far as vendors go. I thought Carters book was Ok but other than that have no experience of them.

One thing I have to say I found pretty questionable is taking public domain indicators, renaming them with TTM in front, and selling them for close to $500 a pop. (Most if not all had appeared on TS forums) To me that's shooting yourself in the foot as it calls into question there whole business ethic. Anyway I have no real axe to grind and may even go for the trial if there tape reading stuff is good.

Cheers.

[Harlequin]

BlowFish,

Yes when Hubert says tape reading it is reading T&S, he often recommends closing all the charts and just practising with just the T&S window only.

As for the indicators that's what I meant by do your own due diligence, I don't have much sympathy for someone that just turns up and thinks by spending a grand on an indicator package they will suddenly make money trading. If your not going to spend 30 seconds on Google then you get what's coming. I remember one time at a webinar someone was complaining they had put the indicator prices up, JC responding "Yes we were selling too many of them" there's supply and demand in action!

Over all as long as you understand that it's an education service and not "Holy Grails R Us" JC and Hubert are both genuine guys with a lot of knowledge IMO.

[smwinc]

Few points,

We have two key areas here:

Time & Sales (actual trades)

Depth of Market in a price ladder (implied demand & supply)

I trade predominantly off the depth in a few markets. I work with traders who trade ONLY off the depth in some markets. It is not some mystical science.

However, this trading style is less suited to thicker markets. Broadly, when reading the depth, you are 'pulling apart the market' and attempting to analyse individual traders.

Is there a seller in the market?
Are they finished?
Where are they short from?
Where will weak hands be forced to reverse?
etc

E.g. 200 lot appears on the front of the offer in the DAX. Traders jump in front with 4,6,10 lots to get short, 'leaning' on the size.

The 200 lot is implied supply. If that gets pulled, the guys who just got short will likely cut & reverse, or at least cut their trade.

You see 1000 on the bid appears in ESXT50 and hit Long the DAX, on the view that the ESTX50 will get bid up, sending the DAX up. 200 lot gets pulled (maybe he was just pushing sellers into his bids?who knows, who cares). Weak shorts reverse as the DAX is bid up, etc.

This is just one example. This type of analysis is fine when you are analysing a market which is of lower volume - DAX, FTSE, etc. The lower the volume of a market, the more you really need to understand the intricate price action.

It is MUCH more difficult (and in my opinion, just not ideal) to try and read the depth of something like the ES, Nikkei, FX futures, etc. Big, thick markets dominated by much more complicated trading.

In something thicker, you are reading the flow of the time and sales. I do like to pay attention to Accumulated Depth, as markets do tend to attract to size, but only on a minor note.

[strtedat22]

	Quote:	smwinc
	Few points, We have two key areas here: Time & Sales (actual trades) Depth of Market in a price ladder (implied demand & supply) I trade predominantly off the depth in a few markets. I work with traders who trade ONLY off the depth in some markets. It is not some mystical science. However, this trading style is less suited to thicker markets. Broadly, when reading the depth, you are 'pulling apart the market' and attempting to analyse individual traders. Is there a seller in the market? Are they finished? Where are they short from? Where will weak hands be forced to reverse? etc E.g. 200 lot appears on the front of the offer in the DAX. Traders jump in front with 4,6,10 lots to get short, 'leaning' on the size. The 200 lot is implied supply. If that gets pulled, the guys who just got short will likely cut & reverse, or at least cut their trade. You see 1000 on the bid appears in ESXT50 and hit Long the DAX, on the view that the ESTX50 will get bid up, sending the DAX up. 200 lot gets pulled (maybe he was just pushing sellers into his bids?who knows, who cares). Weak shorts reverse as the DAX is bid up, etc. This is just one example. This type of analysis is fine when you are analysing a market which is of lower volume - DAX, FTSE, etc. The lower the volume of a market, the more you really need to understand the intricate price action. It is MUCH more difficult (and in my opinion, just not ideal) to try and read the depth of something like the ES, Nikkei, FX futures, etc. Big, thick markets dominated by much more complicated trading. In something thicker, you are reading the flow of the time and sales. I do like to pay attention to Accumulated Depth, as markets do tend to attract to size, but only on a minor note.

I agree with you totally. I see front running large contracts on the tape lately. I seen it today (5/2/2008) on the YM. I just dont know how to time it. I have a feel of the tape but I cant pull the trigger on those large bid/ask orders on the DOM . Im afraid the orders will get pulled when it does get close. When i dont, i see those trades show up on the tape.

strtedat22

[strtedat22]

I wish i had level 2 for the YM. I would be ahead of the learning curve

strtedat22

PS. im with OEC and using sierra charts. is there a third party that offers level 2 for the YM?

[Brookwood]

I too am trying to learn T&S, and to that end am evaluating market profile-type software that lets you see Bid/Ask volume at each price level on a bar chart. My question relates to what I'm seeing in the cumulative volume delta and Bid/Ask/Sales for each candle. On a regular T&S window many times I've seen tons of small prints and block sales at the bid and price goes nowhere yet a few small sales on the ask and price moves up. Also the reverse. I'm seeing this on the demo software too- YM trades down all morning on decent volume but at some point around 10:30 AM there is a 60 point rally but I'm seeing only negative volume delta for every single 3m bar and the bid is getting hit at 5 times the ask.How is price going up if the "tape" shows only selling by any objective measure?What else moves price besides hitting the bid or ask?

[smwinc]

	Quote:	Brookwood
	I too am trying to learn T&S, and to that end am evaluating market profile-type software that lets you see Bid/Ask volume at each price level on a bar chart. My question relates to what I'm seeing in the cumulative volume delta and Bid/Ask/Sales for each candle.

I really think it's important to completely understand the raw data in trading. There is not very many variables (Price and Volume, that's about it.) BEFORE you start using more complex tools to analyse the raw data, or present it in another form.

This is an important point, if I could stress it more, I would.

Every single indicator or data tool is performing a calculation for you, and displaying the result. If you are going to make a decision (buy/sell/wait) based on that result, you need to understand the a) the underlying data and b) the calculation being performed.

Indicators are really just like math formula's. You should use them to calculate a result that is too cumbersome to do manually over and over again.

	Quote:	Brookwood
	YM trades down all morning on decent volume but at some point around 10:30 AM there is a 60 point rally but I'm seeing only negative volume delta for every single 3m bar and the bid is getting hit at 5 times the ask.How is price going up if the "tape" shows only selling by any objective measure?What else moves price besides hitting the bid or ask?

Whoa, whoa whoa.

Negative Volume Delta? Why do you care if volume is decreasing at a slower rate? and why 3 minute bars? What is 'decent' volume - are we comparing volume to an average in a 'look back' period? Do you see my point - there is nothing wrong with these specific things (I don't want to have a discussion about them), but you really need to understand what you are looking at, and most importantly, why you care about them.

Honestly, spend a week without charts, and just watch a price ladder & a time & sales window. I'm guessing you probably just need to be more familiar with the dynamics of how the market actually works - the mechanics of the auction process, etc.

I don't like talking about specifics, but this myth about needing complex tools to earn good money is just complete bullshit. Maybe people assume that successful traders "out there" all use hi-tech tools. All of the people in my office who earn 6 -7 figures a year have the most simple trading setup you could imagine, just using a price ladder & basic charts with no indicators. Just bars/candles and volume. I'm still waiting to meet a trader with a really advanced setup who actually makes a good living.

Time and Sales is showing you the end result of everything you need to know in trading. Buying and Selling. At the end of the day, if you can understand only a moment beforehand that people are likely to buy or sell at a particular point, that is ALL you need to know. It's actually pretty simple, just difficult to do consistently.

Hope it helps.

[beeker1121]

	Quote:	Brookwood
	What else moves price besides hitting the bid or ask?

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.