This website is going to change the way
you trade. Let us help you become a better trader through
technical analysis and swing trading. Get ready to make
some money...
It's time for a rude awakening. The years you spent studying
technical
analysis may not make you a good trader, and all
that hard work may not yield a decent return. So what did you
miss when learning to play the game? You forgot to master the
art of tape reading.
Have you learned to read the tape yet? Take the
first step and memorize key price levels on your
favorite
stock
charts. Then watch the ticker or LII
screen closely when price approaches these critical
points. Price action zones trigger both volatility
and volume. Observe how the tape reacts and see if
you can predict key reversals before the crowd does.
Always look outside the tape flow
before execution. Time of day,
market sentiment, characteristics of
a particular
stock and chart
support/resistance affect the
importance of tape
transaction
signals. Keep in mind that
all skilled tape reading relies on
one key mechanism to locate
profitable signals: market makers
and specialists use their knowledge
of the order book to move their
markets in whatever direction yields
the greatest volume. They will
routinely manipulate
trader emotions
against the order flow to shake them
out of their positions.
Market players keep one eye on their markets
and the other on external conditions that
affect prices. Quiet times (lunch hours,
holidays) offer prime conditions to gun key
support and trigger common stop locations.
And during long periods of little interest,
price can reach important levels on very
little volume. At these times, insiders will
test the breakout waters to see how much new
trading interest they can
generate.
Although each issue has its own personality,
most emotional market behavior unfolds in a
straightforward manner. Price will respond
with sharp movement in the direction of the
impulse but then pause and test demand with
short pullbacks. These countertrend
movements highlight the real challenge for
tape readers. Volume can dry up at any
moment and for no apparent reason, trapping
one side in a sudden reversal.
Level II Screen: More information
does not necessarily improve trading
results. NASDAQ Level II provides
detailed data on market makers and
the depth of their markets.
Unfortunately such information may
focus the trader on the process
rather than the result. The final
resolution of this price competition
often triggers more valuable signals
for profitable execution.
