欢迎宝马老大讲解下Premium 和 tape reading,CALL/PUT RATIO.大家鼓掌。

火锅

Premium is to trade the spread between the futures and cash. Reading the tape is one of the hardest trading skill to master. The tape is useful in timing entry and exit points. Very useful for short-term trading.

 

 

 

ajs

顶~~

WildWolf

silencelake2007

鼓掌欢迎老大开讲

summer123

pooq

support!

gear

 

biorjin

understand premium

NumberRules

有东西学就要show up，谢bimmer。

知更

Thanks!

火锅

原帖由 biorjin 于 2009-1-14 22:48 发表 understand premium

 

THANKS,宝马老大。

 

 

 

有好点的TAPE READING的东东吗？OR你给讲讲？

biorjin

Basic Tape Reading - The Importance of Sub-minute Charts

by Lawrence Chan

Most beginners in trading heard about the concept of tape reading. Unluckily, there is not much materials available that explains it in details. I hope I can provide some guidance here for our readers to learn the basics of tape reading.

What is Tape Reading?

Tape Reading is the study of raw price actions down to the finest resolution - where each trade occurs and where all possible bid/ask updates are monitored.

The term tape comes from ticker tape, print out by the ticker tape machines available since 1870s which reports the latest trade/bid/ask update information.

Nowadays, if you think about it, such information is very hard to interpret due to the fact that the amount of data to process is huge. This concern alone makes tape reading something mystical and sometimes even regarded as born with talents because many well known professional traders are famous for their tape reading skills.

By reading the tape properly, a trader is supposed to be able to tell if the market is weak or strong. This extra information is critical for trading, especially useful when you are daytrading. Just think, if you can identify the strength of the market you trade correctly 90% of the time, you will be able to take advantage of that to wait and buy at bid (when the market is weak), or sell at the ask (when the market is strong). That along will improve your trading performance drastically.

Basic Tape Reading

1. Do not look at the tape all the time, focus on the tape only when the market is closing in at critical price levels (previous day high, previous day low, pivot point, etc.).

2. Best is looking at a depth window with the current bid ask listed at the top, next is watching the quote window with the best bid and ask at the side. Using time and sales window to read the tape is not recommended.

3. Learn to identify 2 distinctive behaviours - a. when the market is moving in a particular direction, is there a lot of resistance. b. when the market is charging a particular price level, is it taking out that price level decisively.

4. Learn to identify a third state - the market is confused.

Some Useful Hints at Learning Tape Reading

When a price level is a strong resistance, the asking price will keep reappearing again and again even though the price got taken out a few times.

When a price level is a weak resistance, the price will be taken out decisively (sometimes after struggling for a short period of time).

A confused market will usually rally to a particular price point and then drop suddenly to a lower but close by price level. The market will then struggle between the two price levels. That implies a confused market and it is not likely you can figure out the direction of the next big move. In this case, stay at the sideline.

Having huge size in the bid does not necessarily means the bid is strong. On the other hand, when a bid got hit and trades started to fill at the bid, while the bid size keep increasing, that is a strong bid.

Tape Reading is Not Fool Proof

Tape reading is a useful technique but it is not 100% correct all the time. Thats true especially when some major players are hiding their bids and offers.

When the buy side traders are scaling into a position (i.e. buying at the bid while the price is dropping, or vice versa) it is then very hard to identify the strength of the market. That will usually results in V-shape reversal price pattern.

A Transitional Tool - Sub-minute Chart with Volume

For a beginner in tape reading, it is very hard to remember the price actions at a particular price level, say, 3 hours ago. Thus it is useful to have a N-seconds chart handy so that it can remind you the price actions you were tracking.

Using a raw N-seconds chart with volume, you can see the price actions clearly together with the volume that stands behind the price moves. For some people like me, adding a stochastics to the chart will help identifying the swings within the chart.

Following is a 5-minute chart with 2 failed stochastic divergence setups.

Lets look at #1, the first divergence setup that failed.

I am going to comment on the various periods within the chart,

A. Entrance price area.

B. First attempt to take out the initial rally started from A.

C. A normal breakout that consolidate at the price level it just created and sit there close to the new high.

D. Another breakout that really advanced the price level. Unluckily the stochastics is warning us that the rally is not as strong as we hope for (due to the divergence formation together with declining volume). Even if we are not taking profit at this level, it is important that we place protective stops to protect our long position.

Without tape reading, it is obvious that we will have to sit through our 5-minute chart setup and then there will not be enough time for us to bail out of this position.

The next chart is a zoom in on the price actions of #2.

E. Entry price level

F. First attempt to go higher. Notice how the reaction is in terms of the sell pressure comparing to the support we get.

G. Second attempt to go higher that has real volume supporting the run up. Notice how the volume declined quickly.

H. If the rally has real strength, then we should see some support showing up here. It is a time of caution in case we are long, it is best to take profit and placing protective stop to protect the profits we made in the rally.

Again, by using a higher resolution chart (getting us closer to reading a tape), we are able to identify weaknesses in the 5-minute chart setup that we are trading. Thus we have an early warning sign that we can make our decision earlier and probably save us part of the profit.

Summary

Tape reading is not as hard as it seems. It is all about monitoring the price action and have a feel of the market strength.

Given enough time to practice, I believe everyone can learn and benefit from tape reading.

原帖由 火锅 于 2009-1-15 00:40 发表   THANKS,宝马老大。       有好点的TAPE READING的东东吗？OR你给讲讲？

lisa

thank you, BMW!

catbaby

Thanks!

ajs

fargo

austinjoe

Thank you very much!

海边玩人

How to Read the Tape

From "Reminiscences of a Stock Operator" Page 100-

Prices move along the line of least resistance. They will do whatever comes easiest, therefore they will go up if there is less resistance to an advance than to a decline; and vice versa.

For example, the market fluctuates within a range of ten points; up to 130 and down to 120. It may look very weak at the bottom. After a rise of eight or ten points, it may look as strong as anything. A man should wait until the moment the tape tells him the speculative line of least resistance defined itself. That is his signal to get busy.

Reading the tape merely enables him to see that at 130 the selling had been stronger than the buying and a reaction in the price logically followed. The selling prevailed over the buying. At 120 there is stronger resistance to the decline. The buying prevails over the selling, there is a rally.

Eventually something happens that increases the power of either the upward or the downward force and the point of greatest resistance moves up or down that is, the buying at 130 will for the first time be stronger than the selling, or the selling at 120 be stronger than the buying. The price will break through the old barrier or movement-limit and go on.

The man who is right always has two forces working in his favor: basic conditions and the men who are wrong.  The least resistance is first aided by the fundamental trade conditions.  It is then aided by the force of the trading of that part of the community that happened to guess wrong and must now rectify mistakes. As a rule, there is always a crowd of traders who are short at 120 because it looked so weak, or long at 130 because it looked so strong, and, when the market goes against them they are forced, after a while, either to change their minds and turn or to close out, In either event they help to define even more clearly the price line of least resistance. Such corrections tend to push prices along the line of least resistance.

My experience has been that the unexpected or unforeseen have always helped me in my market position based upon my determination of the line of least resistance.  I was long Union Pacific because I found out that the line of least resistance was upward. The tape said: "Going up!" And then came the unexpected raising of the dividend rate and the thirty-point rise in the stock. At 164 prices looked mighty high, but as I told you before, stocks are never too high to buy or too low to sell. The price, per se, has nothing to do with establishing my line of least resistance. Any important piece of news given out between the closing of one market and the opening of another is usually in harmony with the line of least resistance. The trend has been established before the news is published, and in bull markets bear items are ignored and bull news exaggerated, and vice versa. Before the war broke out the market was in a very weak condition. There came the proclamation of Germany's submarine policy. I was short one hundred and fifty thousand shares of stock, not because I knew the news was coming, but because I was going along the line of least resistance. What happened came out of a clear sky, as far as my play was concerned. Of course I took advantage of the situation and I covered my shorts that day.

It sounds very easy to say that all you have to do is to watch the tape, establish your resistance points and be ready to trade along the line of least resistance as soon as you have determined it. But in actual practice a man has to guard against many things, and most of all against himself that is, against human nature.  In a bull market bear factors are ignored. That is human nature.

In a narrow market, when prices are not getting anywhere to speak of but move within a narrow range, there is no sense in trying to anticipate what the next big movement is going to be up or down. The thing to do is to watch the market, read the tape to determine the limits of the get-nowhere prices, and make up your mind that you will not take an interest until the price breaks through the limit in either direction.

A speculator must concern himself with making money out of the market and not with insisting that the tape must agree with him. Never argue with it or ask it for reasons or explanations.

What I have told you gives you the essence of my trading system as based on studying the tape.  I buy stocks for a rise I like to pay top prices and when I sell I must sell low or not at all. It would not be so difficult to make money if a trader always wait for the line of least resistance to define itself and began buying only when the tape said up or selling only when it said down. He should accumulate his line on the way up. Let him buy one-fifth of his full line. If that does not show him a profit he must not increase his holdings because he has obviously begun wrong. The same tape that said UP is now saying NOT YET.

It is a wise thing to have the big bet down only when you win, and when you lose to lose only a small exploratory bet, as it were.

Professional traders have always had some system or other based upon their experience and governed either by their attitude toward speculation or by their desires.

Pat Hearne said: "You can't tell till you bet." He would buy one hundred shares of some active stock and when, or if, it went up 1 percent he would buy another hundred. On another point's advance, another hundred shares; and so on. He used to say he wasn't playing the game to make money for others and therefore he would put in a stop-loss order one point below the price of his last purchase. When the price kept going tip he simply moved up his stop with it. On a 1 percent reaction he was stopped out. He declared he did not see any sense in losing more than one point, whether it came out of his original margin or out of his paper profits.

Diver

QuickHand