Article How Important Is Tape Reading In Modern Markets?

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Tape readers have an advantage over chartists because they can interpret intraday data in real time, filtering pages of numbers into surprisingly accurate predictions on short-term price movement. This near-legendary market skill has additional perks, allowing them to measure emotional intensity of participants while they uncover the day’s leaders and laggards. In turn, these generate a broad trading edge that adds firepower to longer-term market strategies.
The basics of tape reading can be learned in a few minutes but the practice takes a lifetime to master, for three reasons. First, the market is enormously complex, requiring many years of observation to understand how individual parts affect the whole. Second, macro forces that move world markets change over time, with qualitative easing controlling one cycle, while a housing bubble keeps markets afloat in another cycle. Third and most importantly, the market structure has changed dramatically over the years, forcing tape...

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