Learning tape reading

[TAjammy]

frig i don't even know if i can fit this in.


F*** this, i'll study YM and ES whenever i can, the more practice the better.
Don't expect me to be posting much here for a while as i've found my calling......
farewell thou trader$

 

[mb325]

Why stress yourself for 5 years trying to cram an hour of tape reading in a night when you can spend this one hour taking daily setups? I understand you're impatient etc. but surely you can see scalping for an hour a day isn't gonna work as you will start taking substandard setups in an attempt to make that hour worthwhile.

If, like you say, you can be successful on the dailies, imagine how much money you can take to uni with you, and if you don't fancy uni you have a proven track record which a prop firm will jump at.

 

[rawrschach]

No one was telling him not to do it, just giving him some good, realistic advice to help him make some important decisions afterv giving him some advice on trading from the DOM earlier. It wasn't much different from what you've just been repeating.

The Wyckoff book you reccomend is indeed excellent but it's important to remember that tape reading as such doesn't exist anymore and there's more to the DOM than that.

If the "newfag" comment was aimed at me then I don't see how the fact that I've got a lower post count than you makes what I've got to say any less valid.

it wasn't aimed at anyone, least of all you seeing as you're making the same point that I am.

 

[rawrschach]

The smallest timescales produce the most random price movements...that is i'm sorry to say....hit and hope...however this does not include skilled practitioners of such methods of which newbies do not belong to....One of the biggest mistakes newbie traders make is to assume that you can just turn up at the P C and start trading smaller time frames ( because there is less risk )...well this is complete bollux because there is far more risk on small time frames and the rewards are also less.

It's not necessarily short term... given the tape makes the chart, a shooting star into a daily pivot zone is also tape reading in effect...watching the T&S as price pushes through and gets sold all the way back down can be a big help inunderstanding how the market actually works.

zomg duoble post

Tape reading requires a hell of a lot more patience and discipline to trade off successfully, doing it for the wrong reasons, as apparently TAjammy is, is only going to kill your account balance.

 

[TAjammy]

It's not necessarily short term... given the tape makes the chart, a shooting star into a daily pivot zone is also tape reading in effect...watching the T&S as price pushes through and gets sold all the way back down can be a big help inunderstanding how the market actually works.

zomg duoble post

Tape reading requires a hell of a lot more patience and discipline to trade off successfully, doing it for the wrong reasons, as apparently TAjammy is, is only going to kill your account balance.

By impatient i do not mean impatience with entry , at all, i meant by taking profits. Hence why i didn' t like trading off dailies as i just can't bear to let my profits just sit there



edit: to mb, the thing about that is 2 problems,
1) At 18 years old if i don't like uni i will barely have a 'legal' track record because i can't tell them my trading was all underage and illegal.
2)Prop firms more than likely will like the track record if it's good, but the fact it's on daily charts will put them off, they want comissions, taking 1-2 trades a day makes them **** all.

About the one hour trading thing aswell- i'm not trading in that one hour, and i won't be trading anytime soon. I will be watching time and sales and DOM on small trendline breakouts of 50,89,150 an 233 tick charts, at the moment i will be focusing on placing limit orders one tick above or below massive orders as a scalping technique, i don't know how well this works, or if it even works at all, it was just something i noticed and will have to develop on.

I hope people don't think i'm going to be reading the tape like livermore, i'm focusing on trading false breakouts, and trades around pivots, that is all . Of course this will take a long time to get the hang of, everyone in this thread keeps saying that- but isn't trading itself a long haul before becoming consistently profitable?

so like i said i'm focusing on bounces of S/R, trendline breakouts and false breakouts. To me it's all about following the big orders and placing sensible limits.

 

[dcraig1]

Watch, watch, watch for a very long time and think about what people might be up to and then you will.



Sorry, dcraig1, I don't mean to pick on you but this is all wrong. You obviously don't know much about what the OP is asking and so have ended up being quite misleading.

As far as the inter-play between demand and supply is concerned keep in mind that a lot of what you see in the DOM ends up being pulled, yet for the price to move say 20 prices it will usually trade many multiples at each price of what you would see at each price on the DOM.

No it is not all wrong.

Regardless of fun and games in the order book, price is determined by the operation of the auction market.

And please do inform us of what can be got from watching a T&S window that cannot be got from applying some decent computerised analysis of the tick time series.

 

[TAjammy]

well tell me this, with your chart , with your perfect trendlines, how do you really know that what you think is support and resistance is actually support and resistance? huh?

ok, let's say you think support is at 1000 on ES, price is headed downward and we now see 1000 and below on DOM- at 999.75 we see very little sell stop losses (something EVERY 'support' should have')

However if what you see , is for example on ES 5000 sell limits below 'support' then you place a sell limit above support so that you can just trail the big moves.


o and another thing is that you have a good idea when a breakout is real or not , as first the boom of stops etc is hit then time and sales will slow down- this is they key part of the breakout, now price starts heading up very slowly, and we see 5000 sell limits coming up on DOM-place a sell limit below the 5000 sell limits and if you get filled then price can only go two ways- down back to prior resistance, or up to the sell limits in which case you bank on a good scalp

 

[mb325]

edit: to mb, the thing about that is 2 problems,
1) At 18 years old if i don't like uni i will barely have a 'legal' track record because i can't tell them my trading was all underage and illegal.
2)Prop firms more than likely will like the track record if it's good, but the fact it's on daily charts will put them off, they want comissions, taking 1-2 trades a day makes them **** all.

1) A prop firm is not exactly going to report you to the FSA if you can make them money.

2) I think you're confusing a prop firm with an arcade or something similar? Prop means you trade with the company's funds, you make money, they make money.

 

[sandpiper]

well tell me this, with your chart , with your perfect trendlines, how do you really know that what you think is support and resistance is actually support and resistance? huh?

ok, let's say you think support is at 1000 on ES, price is headed downward and we now see 1000 and below on DOM- at 999.75 we see very little sell stop losses (something EVERY 'support' should have')

However if what you see , is for example on ES 5000 sell limits below 'support' then you place a sell limit above support so that you can just trail the big moves.


o and another thing is that you have a good idea when a breakout is real or not , as first the boom of stops etc is hit then time and sales will slow down- this is they key part of the breakout, now price starts heading up very slowly, and we see 5000 sell limits coming up on DOM-place a sell limit below the 5000 sell limits and if you get filled then price can only go two ways- down back to prior resistance, or up to the sell limits in which case you bank on a good scalp

Think you've got the first part of that the wrong way round, but no matter. You are trying to emulate locals who have made their bread and butter in the past from leaning on size, but without really knowing how or why that worked for them and/or questioning whether/why it really works or doesn't now. Confidence and determination are both great assets, but if you can try and temper your approach with a touch of humility and gratitude, you might actually get some concrete advice/answers from the guys like arabian/goose etc, who play the modern day version of that game on a daily basis without getting their head handed to them, or from others who specialise in different styes of trading. You could of course just carry on regurgitating this stuff, some of which I presume you've picked up from the console button bashing wizard. Your choice obviously.

Also, rather than just skirt over it 'cos it didn't match up with what you thought you already knew, you might want to re-read what dcraig has written.. certainly the most insightful post on this thread so far, or not. Again, your choice.

Either way. Good hunting.

 

[TAjammy]

I'm not trying to copy people on this forum for 2 reasons-half of the people here aren't traders at all so i don't really trust what anyone says,although some i do. And 2, there aren't really any time and sales traders i know off on these forums.

Believe what you want but what i was saying about chasing the big orders was stuff i learnt in 2 days from watching DOM and time and sales on ninjatrader on ES and YM and not some regurgitated BS i don't understand.

 

[rawrschach]

Maybe, but front running 'big' orders is not necessarily smart. Look for big orders on ES and see how often it gets flipped.

If I were forced to, I'd rather buy into a big sell order than front run.

 

[sandpiper]

I'm not trying to copy people on this forum for 2 reasons-half of the people here aren't traders at all so i don't really trust what anyone says,although some i do. And 2, there aren't really any time and sales traders i know off on these forums.

Believe what you want but what i was saying about chasing the big orders was stuff i learnt in 2 days from watching DOM and time and sales on ninjatrader on ES and YM and not some regurgitated BS i don't understand.

Well. Probably about 170,00 aren't traders at all . Actually, as has already been suggested, anyone who trades from a chart is a time and sales trader.

I would suggest that what you've written indicates that you don't really understand, since what you are describing isn't about chasing big orders bit rather leaning on them. By and large, It's a game that's played in a very specific way, by a very specific group of individuals, with a very specific set of goals/objectives that has very little to do with support/resistance or pivots. You might want to digest what they have had to say about it in the past (or not).

Regardless. I'd suggest you re-examine what was written by dcraig.

EDIT: And you would do well to think about what rawschach means when he says 'flipped'.

 

[pedro01]

anyone who trades from a chart is a time and sales trader.

.

I wouldn't agree with that at all, unless you are using a 1 tick chart. There is a big difference between T&S and charts. A 5 min bar for instance will just show you the range of that 5 minutes but at any point in time won't tell you what T&S does. Much of it may be noise but it is not the same as using the chart. Just a different style.

L2, DOM, T&S are all different. I believe you could stare at all of them for 10 years and not see anything. Same for charts too.

I think that anyone that says - you just need screen time to learn the markets is talking c.r.a.p.

What I think you need with this stuff is at least some ideas of what you should be looking for.

So for the DOM, what exactly are you looking for on the DOM ? What is your idea of what you are looking for and what the reaction should be ? I would say you need to lay those theories down and then look at DOM/L2/T&S with those theories in mind and either prove or disprove that you can see them & that they work for you.

Just blindly staring at something without any idea of the cause & effect relationships you are looking for will be unlikely to bear fruit.

BTW - I tend to agree with Timsk. At your age, I was heavily into the female nursing staff at Stafford hospital, along with raves, drugs, concerts, beer and all those good things that your body can only tolerate in your late teens, ealry 20's.

 

[dcraig1]

L2, DOM, T&S are all different. I believe you could stare at all of them for 10 years and not see anything. Same for charts too.

I think that anyone that says - you just need screen time to learn the markets is talking c.r.a.p.

What I think you need with this stuff is at least some ideas of what you should be looking for.

So for the DOM, what exactly are you looking for on the DOM ? What is your idea of what you are looking for and what the reaction should be ? I would say you need to lay those theories down and then look at DOM/L2/T&S with those theories in mind and either prove or disprove that you can see them & that they work for you.

Just blindly staring at something without any idea of the cause & effect relationships you are looking for will be unlikely to bear fruit.

Absolutely.

And I would rather slam my finger in a car door than stare at T&S window day after day.

 

[timsk]

L2, DOM, T&S are all different. I believe you could stare at all of them for 10 years and not see anything. Same for charts too.

I think that anyone that says - you just need screen time to learn the markets is talking c.r.a.p.

What I think you need with this stuff is at least some ideas of what you should be looking for.

So for the DOM, what exactly are you looking for on the DOM ? What is your idea of what you are looking for and what the reaction should be ? I would say you need to lay those theories down and then look at DOM/L2/T&S with those theories in mind and either prove or disprove that you can see them & that they work for you.

Just blindly staring at something without any idea of the cause & effect relationships you are looking for will be unlikely to bear fruit.

Wise words indeed.
IMO, all traders need to do this before they can become really comfortable and confident in their trading. Focusing in on one 'micro' element of trading (e.g. studying T&S) right from the get go is putting the cart before the horse. This maybe a generalization, but it's my impression that many newbies join forums like T2W and in their first week they're trying to decide whether to have a 10 EMA or a 50 SMA on their charts, or both. And should they be looking at a 5 min chart or an hourly? Line charts, bar or candlestick charts? (TAjammy - this isn't a specific reference to you btw - I know you're not that new to trading.) Round and round in circles they go; I know I did for ages and ages. If they started off by ignoring all those 'micro' details and panned out and studied the big picture - the 'macro' level first - they'd have a much stronger foundation down the line. As Pete says, get some basic theories in place first about how the market works and then, within that context, study T&S and the like. It will not only make studying easier, it will also make it faster, more focused, more meaningful and altogether more productive. This concept is nothing new, of course, and is now the official advice given on the CME Group website - link below. Click on the video by Jeff Quinto entitled 'Developing Your Trading Strategy' under the heading 'Trading Tutorials'.
http://www.cmegroup.com/education/ts.html
Tim.

 

[TAjammy]

i'm not trying to channel everything into tape reading , i'm doing decent in forex atm 40-50 pips daily using a bollinger and keltner squeeze indicator aswell as some paint bars around pivots on 5 min eurusd.

I hope people don't think i meant i was going to trade literally just off T&S, it's just such an amazing thing to watch, i couldn't believe how deep it was when i started watching YM, there were so little sells , and so many buys and yet price wasn't budging up, there was an ending wedge as price moved out of out of it's apex without ever 'breaking out' price stalled again and tonnes of buy orders came in, window went green, price budged a little and then one little sell order comes in and the price pops down... i shorted and placed a stop at where T&S showed resistance and i knew that it was heading lower- it headed around 20 points . This is demo of course and i don't take credit for trading on demo at all, but the point is you can get a real feel for what's going on.

Trailing big orders is just one scalping technique, i know i can gap trade some stocks aswell when they have like tiny pre market volume. If you watch time and sales you can literally feel the pressure from buyers and sellers, it awesome because whenever a pattern like a wedge in the example above ends you almost know for certain where price is headed.

 

[pedro01]

I think that's the crux of it - don't just focus on one dimension.

Will support & resistance zones help your trading ? Maybe. Can you trade without them ? Sure.
Will trendlines & candlesticks help your trading ? Maybe.Can you trade without them ? Sure.
Will breakout techniques help your trading ? Maybe.Can you trade without them ? Sure.
Will watching the news & gauging sentiment help your trading ? Maybe. Can you trade without it ? Sure.
Will pit audio help your trading ? Maybe.Can you trade without it ? Sure.
Will understanding macro-economics help your trading ? Maybe. Can you trade without it? Sure.
Will watching multiple timeframes help your trading ? Maybe. Can you trade without them ? Sure.

Now - when you think about any other aspect of trading the answer is of course that the thing you are considering may be of help.

If it's not another dimension, then it probably won't help. For instance, if you are already looking at 5 oscillators, then a 6th might not help that much.

If you don't know what to look for, then it also probably won't help. So don't stare at a screen without some sort of theory on what it is you are looking at.

If you are making 40-50 pips a day on the forex, then why not stop there & work your way up in size. If you really can do that, just keep doing it & you may get better & build that up to 100-200 pips a day. You'll be the king of the tuck shop if you can do that :smart: :whistling

 

[FulcrumTrader]

I think looking at the order book (dcraig chart example) is not a bad idea at all and looking at the actual conviction within the traded order flow (Cumulative Delta) is even better. In my opinion, this is some of the best realtime information a trader can have to properly evaluate the demand as the market tests zones of resting inventory, new price highs/lows, and intra-range layered inventory support.

 

[TAjammy]

i don't have the trust of my parents , they think i will make them go bankrupt, even though i told them about my demo 3 to 15 k in a month they still wouldnt let me open an account even with my own money.

I don't really have any other option than to learn until i'm 18.

to pedro- im making 40-50 pips daily using an indicator based system which will more than likely become ineffective within 2-3 years anyway as it's john carter's indicators although i use them differently than he does.



From when the futures market opens tonight to friday i will be watching , observing and taking down on paper what i think is going on. I will post my thoughts every friday on what i see

would anyone like to know what the system is? i downloaded the indicators of a forum somewhere but i can email them to someone if they like

 

[FulcrumTrader]

Are you using the "TTM Squeeze This" indicator..... JK.....LOL!

BTW, if you are going to look at price only and you are dead set on indicators then you may want to check out Jurik indicators - JMA's & VEL's The TTM Squeeze This is not the most optimal route to go....not even close.