Learning tape reading
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So i wanted to find a deeper way of looking at the market, not just trading bounces of support/resistancem something more deep, more pure. Something that would take a lot of time but in the looong run make me a far better trader.
I tried mechanical, indicator based systems, they kinda worked but i lacked consistency from them after a good 3 months of trying them. I tried naked trading, and i wasn't half bad at it, but it didn't match my personailty, trading pin bars or whatever off H4 and the dailies was too long for me, i am too young, too impatient so i went back to a style of trading that i previously attempted with lagging indicators-scalping.
I heard about jesse livermore-the greatest trader of all time perhaps, he based his trading of the tape. I figured im young so i can afford to watch the time and sales (tape) for 2 or 3 years on the YM using 89,150 and 233 tick charts. (the good thing about tick charts is that when the market is slow, illiquid and dull , less opportunities will present themselvesm rather than trading of a 2 minute chart. I heard somewhere that those in the pits don't care about 2 mintute highs or lows, they care about how fast the orders are flying in, who is buying them and at what volume and price.
So i heard from several traders that the best option for me would be to start tape reading the time and sales window, ' how can i trade of that?!?!!' answer-'it helps you understand the market you are trading in, the players, whenever i see 1000 sell orders ON DOM or tape hitting a 61.8% fibo level and price goes down i know to short the market'.
So i looked around for where i could get my hands on this time and sales window, it seemed i would have to pay arounf $55 a month, this was for other vital indicators like $tick aswell.
I was just about to suck up the cost for 6-7 months of this service when i seen i had downloaded ninjatrader from a while back. I found out with great surprise i could see real time data for what i wanted to trade later on (YM) for free! i could get access to tick charts, time and sales and real time data all for free. It took a bit of messing about to get it all configured but it got all sorted and yesterday i began tape reading.
At first i just looked at the price, this was actually on the ES , it was just goingfrom .50,.75 and so on, i hadn't a clue. I started looking at the volume of the tradess and then started to get a feel for what was goign on. The overnight session on ES was so slow , but it meant i could read the tape, buy orders in big volume - around 40+ were flying in (there had been nothing above 40 the whole time, just 1s and 2s) but price wasn't budging to the upside...hmmm, and when even just 3 or 4 sells came through price would shoot down. it was almost as if the sell orders would just squeeze through and then price would pop. So i took a short and it went well .
thats all i've learnt so far but this s*** is going to take years to master!
i'll be posting my thoughts on what i think i have found out etc.
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