Home
Up
New Page 91

Co-brand Partnerships

award-5.gif (6517 bytes)

topsite.gif (1668 bytes)

webfifty.gif (6027 bytes)


 
drop_center.gif (2753 bytes)


wpe1.jpg (2095 bytes)


FREE EMAIL
Email Login
Password
New Users Sign Up!
 
MAILING LIST
Sign up for our weekly e-mail newsletter!
Tell Me More!

Enter your e-mail address
subscribe
unsubscribe
NEWS SEARCH
WEB DIRECTORY
WEB SEARCH
 CITY GUIDES
search by:
 WEATHER

Current Weather
Enter Your City, State, or Zipcode:

   

MASTERING
THE TRADE

ORIGINAL, INTERACTIVE SEMINAR ON TRADING USING
TECHNICAL ANALYSIS
 

 
EARNINGS ESTIMATES

Enter Symbol

U.S. QUOTES

Enter Symbol:

U.S. CHARTS

Enter Symbol:

TECHNICAL OPINION

Enter Symbol:

CANADIAN CHARTS

Enter Symbol


 SEC FILINGS

Search For:
 

Company Name
Ticker Symbol

 BROKER RESEARCH
Exclusive Broker

Research
Enter Ticker

 

 

 

The Traders Wheel
6/6/98 by Alan Farley

Tape Reading

Have you learned how to read the tape yet? The best way to begin your education is to pick some stocks and memorize key levels on the price chart. Then watch the ticker until some quirks in behavior start to appear. Pay extra attention when price enters action zones, i.e. areas surrounding important support levels. Observe how the tape reacts and see if you can predict key reversals in your head.

Traders can now access four levels of ticker tape information. In the past, professionals relied on the manual ticker, an early version of what CNBC now flashes across the bottom of the screen. Real time services then introduced single issue Level 1 displays showing the inside bid/ask. As processing power grew, vendors added historical time and sales grids featuring all trading activity in a spreadsheet format. Recently, Level 2 NASDAQ has revolutionized trade information by featuring all the players making a market in a stock at the same time.

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 observation to locate profitable signals: insiders consistently move their markets in whatever direction yields the greatest volume. At the most basic level, they manipulate trader emotions against the flow of orders coming in the door.

Stock insiders keep one eye on their market and the other on external conditions that affect prices. They use their knowledge of the order book to bend the tape towards volume in an effort to trigger execution. Quiet times (lunch hour, 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 to 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.

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 presents more valuable signals for profitable execution.

 
Article contributed by The HARD Right Edge, which presents highly original workshops, tutorials, strategies and resources on multi-trend technical analysis and and short term trading. Article reprinted here with permission, which presents highly original workshops, tutorials, strategies and resources on multi-trend technical analysis and and short term trading. Article reprinted here with permission.
 
 

 

 
Search for it at the TulipSearch Open Directory
Investment Bookstore Investment Newsstand Market Mavens Report

TULIPS AND BEARS NETWORK SITES

 

FINANCE
Tulips and Bears
Contrarian Investing.com
Internet Stock Talk
Traders Message Boards
Traders Press Bookstore

NEWS AND INFORMATION
TulipsWeather
Freewarestop.com
TulipsMail
TulipsEspa�ol
TulipSearch
TulipNews
TulipCards
AllMusicSearch.com
City Guides
Travel Center
Bargain Bloodhound

WEBMASTER TOOLS

BecomeAnAffiliate.com
TulipDomains
GoSurfTo
TulipStats
TulipHost...coming soon
TulipTools...coming soon
...coming soon




Questions or Comments? Contact Us

Copyright � 1998-2002 Tulips and Bears LLC.
All Rights Reserved.  Republication of this material,
including posting to message boards or news groups,
without the prior written consent of Tulips and Bears LLC
is strictly prohibited.  'Tulips and Bears' is a registered trademark of Tulips and Bears LLC


Last modified: April 02, 2001

Published By Tulips and Bears LLC