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shrewdtrader

Tape Reading Tips for a Beginner

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Hey I'm new to this site and been lurking a while and this is my first post. I've read the disciplined trader,trading for a living, ticker technique and S&P's Guide to Investing. I'm 18 and want to trade for a living and I heard in order to do that you need to know how to read the tape. I'm looking into E-MINI'S and want to know a few pointer's or clues on tape reading according to E-MINI'S while I paper trade. Any Feedback would be great and The platform I use is global futures and I recently downloaded E-Signal

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Hey I'm new to this site and been lurking a while and this is my first post. I've read the disciplined trader,trading for a living, ticker technique and S&P's Guide to Investing. I'm 18 and want to trade for a living and I heard in order to do that you need to know how to read the tape. I'm looking into E-MINI'S and want to know a few pointer's or clues on tape reading according to E-MINI'S while I paper trade. Any Feedback would be great and The platform I use is global futures and I recently downloaded E-Signal

 

Get hold of Vadym Graifer's Techniques of Tape Reading. Also visit Linda Raschke's site and download her articles on the same subject. It is not about reading order flow on Time & Sales nor anything to do with Depth of Market.

Also as suggested above visit the Wyckoff forum, tons of free info. on how to read price action i.e buying and selling pressures. There are only a few principles.

However in case you stumbled onto VSA team, they have managed to make it simple;) by having "400 indicators in their charting package" just in case you are keen like most newcomers to get entangled in unnecessary jargon of reading the footprints of the smart/professional/syndicate money.:crap:

Good luck

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However in case you stumbled onto VSA team, they have managed to make it simple;) by having "400 indicators in their charting package" just in case you are keen like most newcomers to get entangled in unnecessary jargon of reading the footprints of the smart/professional/syndicate money.:crap:

 

:D thats so true...been there too...but imo it is definitely worth a look!

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Hey I'm new to this site and been lurking a while and this is my first post. I've read the disciplined trader,trading for a living, ticker technique and S&P's Guide to Investing. I'm 18 and want to trade for a living and I heard in order to do that you need to know how to read the tape. I'm looking into E-MINI'S and want to know a few pointer's or clues on tape reading according to E-MINI'S while I paper trade. Any Feedback would be great and The platform I use is global futures and I recently downloaded E-Signal

 

This pic will help you to start your Tape reading journey:bang head:

Dom.PNG.4b2cb69cd6b0c001c2d00e3331c8fc56.PNG

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This is the 2 outputs of 4 inputs.....good luck to you...:)

 

mr black thats OEC platform, right? how you do to get the time and sales in the way you capture the screen, im not really familiar with that platform and couldnt see that setting

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mr black thats OEC platform, right? how you do to get the time and sales in the way you capture the screen, im not really familiar with that platform and couldnt see that setting

 

It's Ninja Trader.

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Tape Reading in the traditional sense is just looking at the time & sales to determine patterns. Some also consider reading Order Flow (looking at the DOM changes) Tape Reading today. Anything else is not Tape Reading. You learn to read the tape by actually looking at the time & sales for a long time. No book can help you there. I've read them all and most of them are pretty much useless.

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Tape Reading in the traditional sense is just looking at the time & sales to determine patterns. Some also consider reading Order Flow (looking at the DOM changes) Tape Reading today. Anything else is not Tape Reading. You learn to read the tape by actually looking at the time & sales for a long time. No book can help you there. I've read them all and most of them are pretty much useless.
When watching T&S do you use any filters? Do you watch only trades of size greater than some threshold, all trades only, or everything including bids and offers?

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When watching T&S do you use any filters? Do you watch only trades of size greater than some threshold, all trades only, or everything including bids and offers?

 

No filters. I look at all trades and also the DOM.

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I think that there is less manipulation which makes it harder to read since there are so many market participants and most markets are highly correlated. You might think there is a lot of spoofing going on but this might just be spreaders.

 

It can be useful if you can spot manipulation because you can use it. The ES tends to move towards size for some reason. It's counter intuitive but this is what happens. The DOM of the FESX and FDAX is more or less useless since they follow the ES very closely.

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Hi Mr B.

 

That certainly tells you something however seems like in practice several things can happen.

 

1) Price can fall away (possibly the level will be re-tested) but it comes on down.

2) Aggressive (@market) buyers will continue bashing at the wall and it will get slowly eaten (often price will pop through as it breaks and buy stops behind get triggered)

3) Price backs off but support is found close by (maybe 5 or 10 ticks away maybe less) and then carries on back up sometimes with residual resistance where the wall was sometimes not.

 

Sometimes I just think I am not astute enough reading these things :) I guess there are nuances that I just miss. It appears to me that there is a huge amount of 'art' as well as any underlying 'science'.

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The DOM of the FESX and FDAX is more or less useless since they follow the ES very closely.

 

During RTH for the US, perhaps. But during the main European hours that's certainly NOT the case, unless you can show otherwise.

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During RTH for the US, perhaps. But during the main European hours that's certainly NOT the case, unless you can show otherwise.

 

Yes, you're probably right. I'll have to check that since I tend to trade during the US RTH.

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When watching T&S do you use any filters? Do you watch only trades of size greater than some threshold, all trades only, or everything including bids and offers?

 

If you use filters your going to be cutting off alot of orders that are big money that just has chopped up their orders.

I agree with throwing the books in the garbage. Probly the best way to start out is just watch the tape when price nears the session high/low on a thinner contract than ES. Also its probly a good idea to have TICK open so you can see what happens on the tape when the programs sweep the contracts and that the size is usually in the speed of small orders as opposed to very large prints.

If you just start with the high/low though you can get a feel how the order flow moves if the high low is going to act as support/resistance or a breakout from the high/low.

Also, just take your time and don't get frustrated.

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If you use filters your going to be cutting off alot of orders that are big money that just has chopped up their orders.

I agree with throwing the books in the garbage. Probly the best way to start out is just watch the tape when price nears the session high/low on a thinner contract than ES. Also its probly a good idea to have TICK open so you can see what happens on the tape when the programs sweep the contracts and that the size is usually in the speed of small orders as opposed to very large prints.

If you just start with the high/low though you can get a feel how the order flow moves if the high low is going to act as support/resistance or a breakout from the high/low.

Also, just take your time and don't get frustrated.

Thank you for advices. I use AmiBroker and it has a poor T&S window. It is not configurable at all and it shows not only trades but also every new bid and offer. Way too fast then. I recently downloaded NinjaTrader so I use T&S from Ninja instead. Also I found T&S in IB TWS quite interesting. Since they aggregate ticks the T&S is in fact compressed and inaccurate but on the other side the aggregation acts like a moving average in some way. But I guess I will just stick with Ninja and IQfeed. For the last month I have been focusing on NQ when studying price action.

I am at the beginning of this all, because I spent a few months hunting for indicators and different systems. I change the things I watch quite frequently, but right now it is T&S, a 3 tick bar chart with wolume (because I am not yet able to mentally project a chart from T&S, and to see the sequenced orders), a 1 minute bar chart with wolume for a bigger intraday picture and finally a 15 min chart for bigger picture of the last few days. Yesterday I experimantally added a 100V chart. I might add Nasdaq Tick as well, I already studied it a bit... I need to find what charts, intervals and internals provide (for me) the best representation of what is happening.

 

I listened to Db's advice (from his book, I think), and I am not trying to trade, I just observe. Not frustrated at all (yet :) ), and not in a hurry.

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Yesterday I experimantally added a 100V chart. I might add Nasdaq Tick as well, I already studied it a bit... I need to find what charts, intervals and internals provide (for me) the best representation of what is happening.

 

Well it sounds like you are starting out on the right track. I totally agree with finding the best representation of what is happening. I'm also using DTN/Ninja, hard to beat that price wise and Ninja's tape is the best hands down.

My current setup is 200v candle chart with the wicks removed so its just a "body" between the high and low of each 200 transactions and the tape on YM. My setup is to trade triangles on that chart and then entry/exits are managed on the tape once the triangle is broke. After 4 years at this, that is the only setup that passes my soft subjective confidence interval without backtesting but since those don't happen very often most the time i'm just sitting and waiting looking for other setups that look nice to trade someday.

A good excerise I'm doing while waiting right now is to draw extended horizontal lines in Ninja at where you believe the market will respect a price and then see what happens on the tape when price dances with that level.

The funny thing I've found is no matter what I draw, the only thing that seems to have better than random results is the overnight high/low and the session high/low. The bottom/top of an intraday range will be respected on the tape once then mean nothing the second time(all that information has been discounted), or be respected 3 times then mean nothing the 4th time with zero predictability or soft expectancy.

Currently, the only little pattern I'm considering trading beyond my triangle position trading is a scalp off the tape. That if you look on a market delta chart, the top/bottom and cascade of a move is always marked by extremely "aggressive" traders that are totally in the wrong direction. On the tape this looks like, if you move your perception up/down a bit from the current action to where you don't believe any orders should transact, you will see a few prints at those levels and then price reverses. The problem with this trade for me currently is that I've also seen thats when the programs come in and sweep the market sometimes and my trading plan #1 rule is to never put myself in a situation when I know I could be on the wrong side of the programs. The problem here is that DTN blows for internals and I might park into a tradestation account just to get their nice internals.

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The funny thing I've found is no matter what I draw, the only thing that seems to have better than random results is the overnight high/low and the session high/low. The bottom/top of an intraday range will be respected on the tape once then mean nothing the second time(all that information has been discounted), or be respected 3 times then mean nothing the 4th time with zero predictability or soft expectancy.

 

Isn't that the whole point of reading the tape? To see if the level is holding? Aren't the dances different depending on which side is stronger?

 

I dunno maybe I have been expecting too much out of the tape all these years, no wonder I haven't found it!

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