Tape reading, Time and Sales, Order flow

Happens on stocks a lot - when 2 parties agree to a trade & then it's reported later as a block trade.

It happens on futures regularly - I think that's just the platform/data going a bit crazy. I'm not sure if you can target a bid below the best for a sell - one of the TT guys would be best to ask that.
 
Happens on stocks a lot - when 2 parties agree to a trade & then it's reported later as a block trade.

It happens on futures regularly - I think that's just the platform/data going a bit crazy. I'm not sure if you can target a bid below the best for a sell - one of the TT guys would be best to ask that.

That's dark pools or whatever they call it though, it shouldn't be able to occur.
 
Nothing to do with dark pools.

2 parties are free to arrange a sale of stock between themselves at an agreed price. Think about it - if you have 50,000 shares & you know someone that needs 50,000 shares and you agree the price, there is very little chance that this will be market price at the time the sale goes through.

Hence block trades.
 
Nothing to do with dark pools.

2 parties are free to arrange a sale of stock between themselves at an agreed price. Think about it - if you have 50,000 shares & you know someone that needs 50,000 shares and you agree the price, there is very little chance that this will be market price at the time the sale goes through.

Hence block trades.

Hmm
I thought everything had to go through the exchange?
 
It does - but a broker can arrange a sale between 2 parties.

It gets reported when it goes through. These kinds of transactions don't generally impact the tape reading/order book side though. They are best ignored.
 
Block trades are always reported later anyway. You see several of them right on or after the close at prices quite a bit away from the closing price. Also, most block trades occur outside the market price at the time depending who how badly someone wants to buy or sell. Since it's a private transaction the current market bid/offer prices don't apply.

Peter

Peter
 
It does - but a broker can arrange a sale between 2 parties.

It gets reported when it goes through. These kinds of transactions don't generally impact the tape reading/order book side though. They are best ignored.

Most online broker software will ignore them so they won't erratically trigger your limit or stop orders.

Peter
 
I like these statements:
You're looking for a change in supply and demand.If you watch the DOM for long enough you get a feel for how many contracts cause a bounce/reversal.

There really is not any replacement for sitting in front of the thing for hours on end, but this is the kind of thing you need to notice if you are to trade from the DOM.
 
I like these statements:

Yes good stuff. Tape is really understanding and watching the response of the DOM to the time and sales. You need to see both IMO to get a true feel.

An example:
See bidders stepping in with unusual size at best bid, not getting filled and the market backing away from him? You've got your short term supply/demand imbalance reading right there. What does he do now? He needs to get more aggressive if he wants a fill, so he moves it up a few ticks, still no supply? What's the only way to ensure a fill? Go market, there's your tradeable pop.

On the flip side
Unusual size steps up to best bid and gets filled immediately. Supply meeting demand instantly and likely looking for more if he took it all. Perhaps not tradeable in itself but used at a key level it's valuable info about who is lurking.

Loads of clues on the tape if you know what to look for. (y)
 
I use IB - but I reckon Mirus are fairly good. A lot of people rave about Infinity.

Still - I like the Universal account of IB but you don't get Ninja for free with IB.
 
Yes good stuff. Tape is really understanding and watching the response of the DOM to the time and sales. You need to see both IMO to get a true feel.
I never thought the DOM could be useful because I thought the bids or asks could be fake or get pulled. But what you said about watching it with Time and Sales sounds like a really good idea. Ive been trying to read the Time and Sales or more exactly "Price and Sales" and that by itself is pretty good so far.
An example:
See bidders stepping in with unusual size at best bid, not getting filled and the market backing away from him? You've got your short term supply/demand imbalance reading right there. What does he do now? He needs to get more aggressive if he wants a fill, so he moves it up a few ticks, still no supply? What's the only way to ensure a fill? Go market, there's your tradeable pop.

Let me see if Im understanding this. Theres an unusually large amount of bids(buy contracts) at best bid. The market is moving away up or down? I would believe up. That means they really want to buy but theres no one to sell it to them?

Unusual size steps up to best bid and gets filled immediately. Supply meeting demand instantly and likely looking for more if he took it all. Perhaps not tradeable in itself but used at a key level it's valuable info about who is lurking.
So if I understood this correct, because the bids(buys) get filled quickly that means theres a lot of people wanting to sell? Or that theres a lot of available contracts because no ones selling so price will go up?
 
hey guys, we know tape reading is very important for intraday traders.

but it takes years to master this skill!

is there way to cut learning curve for tape reading and nail it under 1 year?
 
hey guys, we know tape reading is very important for intraday traders.

but it takes years to master this skill!

is there way to cut learning curve for tape reading and nail it under 1 year?

Of course.

Start off reading momentum & use that in trade management - should take 3-4 weeks tops.
 
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