Tape reading vs Chart reading?

I don't think you can (or should) tape read without using charts. I use it with other indicators and charts to look for an entry. There are lots of times that you can see a shift coming or a move accelerating or ending. In my opinion it should be part of a basket of skills that you use.

 

Tape reading also take time to develop and is difficult to teach. Also each stock is different and markets can shift making the tape reading different in different markets. What works on one stock may not work on alot. You do need liquidity for it to work so stocks that have lower volume can be easier to manipulate and tape reading would be short of useless.

 

Just my experience and perhaps others have a different experience.

Tape reading has its place, afterall, it's price action. I have had good results watching strictly the bid and ask and then the time of sales, but pair that with a DOM and you have a pretty efficient means of trading price alone. Would I give up charts, no, but it does have its place, especially for catching movers.
 

the book "story of a stock operator" was about this guy that traded off the tape and cleaned house at those bucket shops i think he called them.

Im not really sure how to do it properly.  but i guess it involves changes in momentum..

For example,if u see heavy selling volume but its getting bought up immediately.  could mean a good support and a decent spot to buy.

but thats obvious, sry not much else to contribute

There are some big differences with today. Back then, there were essentially no charts, unless you plotted them yourself (AFAIK). Also, he knew many of the bigger market players and how they worked. The market is simply too big now to pick out the bigger players as the action is happening. You can get a feel for what big money is doing, but that's about as deep as it gets. He knew specific individuals who would be providing supply or sopping up demand like a thirsty sponge, and would play against them one on one from time to time. But there is no question you can read the tape effectively still, to get a great feel for the marketplace for specific stocks.

Trying to read the tape (actual supply and demand) is very hard to do with electronic trading IMO

So many orders flying by...you see a lot of reds, you start to think your longs are in trouble so you get out, 

only to see a huge stack of greens come flying through 2 seconds later and blast off. I've had some good

reads end of day where I see huge sells (500-1000 lots) coming through where I'm short and it works out.

I don't know...the market is pretty close to a coin toss for me. I trade random levels and dumb luck

more often than not. 

 

I'm pretty good at reading the depth of the market (perceived supply and demand, not actual)

when the market is slow and there are not as many stuffed orders. During the New York session,

it's very hard for me to get an edge there. I'm better off just watching the volume profile and my price levels. 

 

When price starts to hit stops which is where I sometimes try to grab a piece of the pie, you'll

see the DOM jump a bunch and you'll think you're 'reading' momentum but I believe

that it's really an aftereffect of the stops being ran and players like myself going long - double whammy.

So even in that case the price (or price range of stops) came before the momentum that was seen in the DOM. 

I tend to disagree with the guys that say you can't only "tape read". I do it daily just trading the open. Below, I have linked some tape reading videos/posts/tutorials I have done on my blog.

Also,

 

I only tape reading with just stocks. No ETFs (SPY etc) nor futures/forex... trying to "tape read" those are very difficult, on my end at least.

 

You can insert the videos directly into the post.

 

Thanks.

 

I'm not seeing anyone saying that you can't. 

For me, I find it very hard to do. 

Doesn't mean it can't be done. It just takes more experience. 

 

I know of one pro that trades just the DOM with Treasury Notes. 

 

Wait .... so are you able to tape read with high volume, high volatility stocks?  I dunno how that would be possible given how fast the T&S and L2's fire off.

Tape reading = L2 quotes
Imo