I posted about this a number of weeks ago but want to resurrect it here:
Full story written by Imogen Rose-Smith and discovered on Timmay's site, it covers the story of Merritt Graves, a young hedge fund manager. I have pulled out some details pertinent to this topic...
"...The 23-year-old, who tracks nearly 100 trading positions on his phone’s Web browser, was monitoring the stock market, which by that time had been open for more than three hours.
This college student has an unlikely full-time job: He runs a $4.7 million long-short equity hedge fund.
In themselves, the numbers put up by Caelum Capital, as Graves’s five-person firm is known, are impressive. For a fund piloted by a kid who has no professional investment training and who only recently moved out of the dorms, they are uncanny. Last year, when the average equity hedge fund manager was down 26.4 percent, according to Chicago-based Hedge Fund Research, Graves was up 40.6 percent. In 2007 he returned 174.1 percent, after more than tripling his money the previous year — and nearly doubling it the year before that.
Graves called the subprime mortgage crisis and its impact as early as 2005. He also predicted the severe stresses that hit the banking sector in 2008.
As Caelum’s sole investment professional, Graves has achieved this remarkable record not by shooting for the moon but by maintaining tight risk controls. In addition to holding a diversified portfolio of 80 to 100 stocks, he limits each position to 0.5 to 8 percent of the total and won’t borrow more than 2-to-1 overnight. His fund’s net market exposure — his longs minus his shorts — has typically ranged from –30 percent to 30 percent of the portfolio’s total market value. As a result he has delivered far less volatility on the downside than either the Standard & Poor’s 500 index or the Nasdaq composite index, and his fund’s returns are relatively independent of both benchmarks.
“It has been a long road of constantly getting more disciplined,” says Graves, sounding more like a grizzled money manager than an undergrad who still eats in a college cafeteria.
Monitoring the markets while attending class is something that Graves has been doing since junior high school, when he learned formative lessons about risk. At age 14 he convinced his parents to help him open an account at discount brokerage Ameritrade — and twice lost all his savings from odd jobs as the technology bubble collapsed. In 2002, at age 17, he borrowed $7,000 from a local day trader he had befriended and lost it all again.
“It hurt so much worse losing someone else’s money,” recalls Graves.
After taking a year off from trading to study the markets, the then-teen summoned the courage to borrow another $7,000 from the same individual, who agreed to give him a shot at making up the prior loss in exchange for half of any additional trading profits.
It proved to be a smart bet. Within a year Graves had turned the $7,000 into $340,000, netting a personal profit of $100,000 after taxes. His winning streak continued as he began studies at the University of Iowa, spent a year abroad at Australian National University and took 12 months off to live in Berkeley, California, to focus on his trading before continuing his education at Pomona. During that three-and-a-half-year period, he turned the $100,000 into $2.8 million, which he used to seed Caelum Capital in October 2007.
Arguably Graves’s greatest strength, developed through trial and error, is his ability to interpret buy and sell signals from security-price movements — in short, to “read the tape,” a skill that is tough to teach and that he shares with hedge fund stars who are more than twice his age, like SAC Capital founder Steven Cohen and Paul Tudor Jones II of Tudor Investment Corp.
“Intuitively, I started to feel what the market was doing,” says Graves, reflecting on his evolution as a trader. “Things started to become more visceral.”
...Merritt Graves has always been entrepreneurial. In the fourth grade he baked cookies that he sold in the teacher’s lounge until the school district shut him down (he even had his own business cards printed up). Later he ran lawn-mowing and snow-shoveling businesses and earned money cutting down Christmas trees.
In eighth grade, while watching business network CNBC, he decided to invest his savings in the stock market, convincing his parents to open the Ameritrade account...
...“I thought investing looked cool,” he says.
It was the summer of 2000, and the dot-com boom was going bust. Graves had invested his entire $500 in savings in a handful of high-flying technology companies that ended up going bankrupt. He lost everything.
Undeterred, Graves raised a new $1,000 stake by flipping burgers and running a pressure-washing business. He bought more tech stocks. He lost everything again.
By then, Graves was attending Iowa City High School, where he was a popular and engaging student with wide-ranging interests. Daphne Foreman, his ninth-grade English teacher, says Graves especially enjoyed Fahrenheit 451 , Ray Bradbury’s portrayal of a dystopia where censorship rules, identifying with the free-thinking and insatiably curious Clarisse McClellan, one of the main characters.
“Merritt was obviously concerned about things most kids weren’t,” says Foreman. “He had a presence about him.”
During his sophomore year Graves raised $7,000 from Jeff Larson, a local day trader and entrepreneur he befriended who must have sensed something special in the teen (Larson did not return phone calls seeking comment). Graves used that money, along with $2,000 of his cash, to get back into the market, this time trading small- and microcap stocks.
The third time wasn’t the charm. That spring, Foreman says, Graves began looking more and more tired, missing school entirely some days. He lost everything again. “I advised him several times to back away,” says his father.
Instead, in his quiet, determined way, the younger Graves began to monitor the market rather than trade it, teaching himself to sense where stocks were moving by watching the tape. He read about investing and behavioral finance, and identified a major weakness in his trading: a tendency to double down on declining positions in an attempt to make his money back quickly and end the pain of losses.
By July 2003 Graves was ready to try again. With the second $7,000 stake from Larson, he focused his attention on stocks with larger market capitalizations."
Sunday, July 26, 2009
Trading the Tape - Part Four
Linda Raschke, continued...
Responses
"The study of responses ... is an almost unerring guide to the technical position of the market."
- Rollo Tape (Richard Wyckoff), 1910
The second main trick to monitoring price action is to watch for the market's response to a particular condition ... in other words, anticipating a particular behavior. For example, if the market has been at a very low volatility point and just begins breaking out of it's particular trading range, one might anticipate that the price would begin to accelerate in an impulsive manner and not run into immediate resistance. Or, on a directional play, if the price is moving in an impulsive manner in a trending market and then pauses to catch its breath on a mild reaction, one would expect it then to continue on in the direction of the trend. When there is a particular behavior to anticipate, it is easier to watch the price to see if it acts according to one's expectations.
Is the market failing to break on bad news? Is it finding support after a series of advances? Does it run into an invisible overhead wall and sharply back off, implying strong resistance? These are market responses to certain conditions. Tape reading is like playing a tennis game and watching to see how your opponent hits the ball back.
Part of studying price behavior and gaining experience as a trader is gradually learning what actions to anticipate. Then you must learn what the market's most probable response or outcome should be. It will always be easier to anticipate an event or response which happens 70% of the time than to be looking for that which happens only 30% of the time.
However, it can also be a profitable strategy to recognize when a given signal or expected response is failing. Sometimes a failed signal can be more profitable than the normal expected response. For example, a classic failed response might be a scenario wherein price was consolidating in a pattern of higher lows and lower highs - a classic triangle pattern. One would expect a breakout from a chart formation to have some follow-through. However, if price only penetrates the lows by a small amount and then turns upward, picking up volume and momentum as it goes, and comes out the upside, a very significant reversal has probably occurred and there may be much more price advance to unfold.
One last trick to watching price action is to learn to think in terms of "handles," or levels. Think of the S&P's as reaching for the "1110" handle, or the "low 1060's" as a level. Each ten points is a defined level. Use big round numbers as reference points for levels. It doesn't mean that you are placing orders at those numbers. It is just a simple way of organizing data that professional traders practice subconsciously.
Pivot Points
An astute trader will always have the previous day's close in his head. He also knows the previous day's high and low (prices he would have liked to have bought and sold but probably didn't). He also knows the opening price, for that tells if the buyers or sellers are in control for the day.
The previous day's high and low and today's open have very strong psychological implications and are the most important "pivot points" to recognize. By concentrating on price action near these points, we can eliminate much of the hard work in tape reading. Many times the market will let us know right away if this is going to be an area of support or resistance.
The previous day's high and low tend to overlap in congestion areas. Look to exit profitable trades immediately at these points in sideways markets. In trending markets, the price will run through these points a bit before pausing. When the market is strongly trending, the opening price becomes the most important.
If we are watching a high, low, or opening price as a pivot point, we are watching to see whether there is any impulsive price action as the market approaches the point or moves further away from it. What is "impulsive action?" I like to call it a "whoosh." The market moves rapidly as if just coming to life for the first time. It is usually a series of ticks in one direction without a tick in the opposite direction. The market is tipping its hand. A sequence like this tends to consolidate or pause a bit before being followed by more impulsive action. This is quite easy to see in a market like the S&P's if you look on a short-term time frame. If we quantify these "whooshes," which we can do in several ways, we will see that the market tends to have continuation moves at least 2/3's of the time. Not bad for arriving at a "positive expectation" simply by following price action.
In conclusion, tape reading is not watching every trade that passes by (a monotonous task) but rather keeping an eye out for unusual impulsive action, unusual volume, or just observing the way the price trades at significant levels. Each price swing has forecasting value as to what the next most immediate move should be. We then follow the price action to see if that move plays out.
Tape reading is at the heart of swing trading. When looking for short-term moves, price-based derivative indicators will be too late to be of value. Ultimately, traders should feel a great sense of freedom when they can rely on simple charts to formulate a game plan or a conceptual roadmap in their heads - and the movement on the tape to tell them their game plan is correct."
Responses
"The study of responses ... is an almost unerring guide to the technical position of the market."
- Rollo Tape (Richard Wyckoff), 1910
The second main trick to monitoring price action is to watch for the market's response to a particular condition ... in other words, anticipating a particular behavior. For example, if the market has been at a very low volatility point and just begins breaking out of it's particular trading range, one might anticipate that the price would begin to accelerate in an impulsive manner and not run into immediate resistance. Or, on a directional play, if the price is moving in an impulsive manner in a trending market and then pauses to catch its breath on a mild reaction, one would expect it then to continue on in the direction of the trend. When there is a particular behavior to anticipate, it is easier to watch the price to see if it acts according to one's expectations.
Is the market failing to break on bad news? Is it finding support after a series of advances? Does it run into an invisible overhead wall and sharply back off, implying strong resistance? These are market responses to certain conditions. Tape reading is like playing a tennis game and watching to see how your opponent hits the ball back.
Part of studying price behavior and gaining experience as a trader is gradually learning what actions to anticipate. Then you must learn what the market's most probable response or outcome should be. It will always be easier to anticipate an event or response which happens 70% of the time than to be looking for that which happens only 30% of the time.
However, it can also be a profitable strategy to recognize when a given signal or expected response is failing. Sometimes a failed signal can be more profitable than the normal expected response. For example, a classic failed response might be a scenario wherein price was consolidating in a pattern of higher lows and lower highs - a classic triangle pattern. One would expect a breakout from a chart formation to have some follow-through. However, if price only penetrates the lows by a small amount and then turns upward, picking up volume and momentum as it goes, and comes out the upside, a very significant reversal has probably occurred and there may be much more price advance to unfold.
One last trick to watching price action is to learn to think in terms of "handles," or levels. Think of the S&P's as reaching for the "1110" handle, or the "low 1060's" as a level. Each ten points is a defined level. Use big round numbers as reference points for levels. It doesn't mean that you are placing orders at those numbers. It is just a simple way of organizing data that professional traders practice subconsciously.
Pivot Points
An astute trader will always have the previous day's close in his head. He also knows the previous day's high and low (prices he would have liked to have bought and sold but probably didn't). He also knows the opening price, for that tells if the buyers or sellers are in control for the day.
The previous day's high and low and today's open have very strong psychological implications and are the most important "pivot points" to recognize. By concentrating on price action near these points, we can eliminate much of the hard work in tape reading. Many times the market will let us know right away if this is going to be an area of support or resistance.
The previous day's high and low tend to overlap in congestion areas. Look to exit profitable trades immediately at these points in sideways markets. In trending markets, the price will run through these points a bit before pausing. When the market is strongly trending, the opening price becomes the most important.
If we are watching a high, low, or opening price as a pivot point, we are watching to see whether there is any impulsive price action as the market approaches the point or moves further away from it. What is "impulsive action?" I like to call it a "whoosh." The market moves rapidly as if just coming to life for the first time. It is usually a series of ticks in one direction without a tick in the opposite direction. The market is tipping its hand. A sequence like this tends to consolidate or pause a bit before being followed by more impulsive action. This is quite easy to see in a market like the S&P's if you look on a short-term time frame. If we quantify these "whooshes," which we can do in several ways, we will see that the market tends to have continuation moves at least 2/3's of the time. Not bad for arriving at a "positive expectation" simply by following price action.
In conclusion, tape reading is not watching every trade that passes by (a monotonous task) but rather keeping an eye out for unusual impulsive action, unusual volume, or just observing the way the price trades at significant levels. Each price swing has forecasting value as to what the next most immediate move should be. We then follow the price action to see if that move plays out.
Tape reading is at the heart of swing trading. When looking for short-term moves, price-based derivative indicators will be too late to be of value. Ultimately, traders should feel a great sense of freedom when they can rely on simple charts to formulate a game plan or a conceptual roadmap in their heads - and the movement on the tape to tell them their game plan is correct."
Reading the Tape - Part Three
And from Traders Log, Linda Raschke, a well-known and well respected educator on stock trading, offers this on the subject. Note that she mentions tape reading in the context of swing trading, not intra-day trading:
Tape Reading
by Linda Bradford Raschke
Sometimes it is nice to reexamine a simple concept when there appears to be overwhelming volatility in the markets. Mechanical systems and patterns are helpful and even necessary for the structure they impose in organizing data, but even Richard Dennis in his original course discussed ways to "anticipate" entry signals, exit trades early, and filter out "bad" trades.
Learn to follow the market's price action and read the signals it gives. This can become a strict discipline in itself and the result will be greater confidence that a trade is or is not working.
Tape Reading
"Trading technique is simply the ability, through study, observation, and experience, to recognize the signals in each of the several phases of market movement."
- George Douglas Taylor
Tape reading long ago referred to the practice of studying an old-fashioned ticker tape and monitoring prices, volume, and fluctuations in order to predict the immediate trend. (It does not mean you have to have the ability to read the prices scrolling across the bottom of the screen on CNBC!) Tape reading is nothing more than monitoring the current price action and asking: Is the price going up or down right now? It has nothing to do with technical analysis and everything to do with keeping an open mind.
Even the most novice observer has the ability to see that prices are moving higher or lower at any particular moment or, for that matter, when prices seem to be going nowhere or sideways. (Markets do not always have to be going somewhere!) It is also fairly easy to watch a price go up and then tell when it stops going up - even if it turns out to be only a momentary pause.
I've known hundreds of professional traders throughout my career. I don't want to disappoint you, but I know of only two who where able to make a steady living for themselves with a mechanical system. (I am not counting the well-capitalized CTA's who are running a money-management program with "OPM" - other people's money.) All those other traders used some type of discretion that invariably involved watching the price action at some moment - even if just to move a stop up or down.
If you can learn to follow the price action, you will be two steps ahead of the game because price is faster than any derivative. You may have heard the saying, "The only truth is the current PRICE." Your job as a trader will become ten times easier once you accept this. This means ignoring news, opinions, and personal biases.
Watching price action can actually be very confusing if you go about it like a ship without her sails up in an ocean squall. You will get tossed back and forth with no sense of direction and no sense of purpose. There are two main tricks to monitoring price action. The first is to watch the price relative to another "reference point." This is why many traders use a "pivot point" - and it works! It is the easiest way to tell if the market is moving closer to or further away from a particular point. This is also why it is often easier to get a "feel" for the market once you put a position on - your "reference" point tends to be your entry price.
Some reference points, such as a swing high or the day's opening price, will have much more significance than those points involving some type of calculation. (Some numbers might have special meaning for those who calculate them, and who am I to argue if they work.) I like to concentrate on pivot points that the whole market can see. To sum up so far, when watching price, we want to know the following: how fast, how far, and in which direction. It takes two points to measure these things. One will always be the current price, the other a pivot point.
* Do not watch price for the sake of watching price. Watch price with the intent to do something or to anticipate a certain response!
Tape Reading
by Linda Bradford Raschke
Sometimes it is nice to reexamine a simple concept when there appears to be overwhelming volatility in the markets. Mechanical systems and patterns are helpful and even necessary for the structure they impose in organizing data, but even Richard Dennis in his original course discussed ways to "anticipate" entry signals, exit trades early, and filter out "bad" trades.
Learn to follow the market's price action and read the signals it gives. This can become a strict discipline in itself and the result will be greater confidence that a trade is or is not working.
Tape Reading
"Trading technique is simply the ability, through study, observation, and experience, to recognize the signals in each of the several phases of market movement."
- George Douglas Taylor
Tape reading long ago referred to the practice of studying an old-fashioned ticker tape and monitoring prices, volume, and fluctuations in order to predict the immediate trend. (It does not mean you have to have the ability to read the prices scrolling across the bottom of the screen on CNBC!) Tape reading is nothing more than monitoring the current price action and asking: Is the price going up or down right now? It has nothing to do with technical analysis and everything to do with keeping an open mind.
Even the most novice observer has the ability to see that prices are moving higher or lower at any particular moment or, for that matter, when prices seem to be going nowhere or sideways. (Markets do not always have to be going somewhere!) It is also fairly easy to watch a price go up and then tell when it stops going up - even if it turns out to be only a momentary pause.
I've known hundreds of professional traders throughout my career. I don't want to disappoint you, but I know of only two who where able to make a steady living for themselves with a mechanical system. (I am not counting the well-capitalized CTA's who are running a money-management program with "OPM" - other people's money.) All those other traders used some type of discretion that invariably involved watching the price action at some moment - even if just to move a stop up or down.
If you can learn to follow the price action, you will be two steps ahead of the game because price is faster than any derivative. You may have heard the saying, "The only truth is the current PRICE." Your job as a trader will become ten times easier once you accept this. This means ignoring news, opinions, and personal biases.
Watching price action can actually be very confusing if you go about it like a ship without her sails up in an ocean squall. You will get tossed back and forth with no sense of direction and no sense of purpose. There are two main tricks to monitoring price action. The first is to watch the price relative to another "reference point." This is why many traders use a "pivot point" - and it works! It is the easiest way to tell if the market is moving closer to or further away from a particular point. This is also why it is often easier to get a "feel" for the market once you put a position on - your "reference" point tends to be your entry price.
Some reference points, such as a swing high or the day's opening price, will have much more significance than those points involving some type of calculation. (Some numbers might have special meaning for those who calculate them, and who am I to argue if they work.) I like to concentrate on pivot points that the whole market can see. To sum up so far, when watching price, we want to know the following: how fast, how far, and in which direction. It takes two points to measure these things. One will always be the current price, the other a pivot point.
* Do not watch price for the sake of watching price. Watch price with the intent to do something or to anticipate a certain response!
Reading the Tape - Part Two
From SMB Capital, I got this:
"In a recent blog Dr. Steenbarger talked about a vital skill for the intraday trader, reading the tape. Dr. Steenbarger, aka the godfather of modern trading psychology, wrote: “My experience is that an understanding of (and ability to read) order flow is one important factor that separates the older, successful generation of daytraders from the newbies who only know simple chart patterns and indicator readings.” I am one from this older generation of intraday traders. And I thought this old-timer could share his thoughts on reading the tape and how it impacts the developing intraday trader.
In the past I have disappointingly heard developing traders state,”I am just going to focus on the charts going forward. I can’t read the tape.” I have heard this uttered on numerous occasions. Not one of these individuals became successful traders.
Recently, our newest class has moved from the first part of our training to the second part, Trader Development. After the Close we answered their questions and discussed what was important on Day 6 of their live trading career. (Oh to be young again. What was I doing on Day 6 of my trading career?) And one of our promising traders discussed a trailing stop for a MS trade today. Trailing stop? My impression was this talented new trader had trouble reading the tape so was experimenting with these trailing stops to minimize this weakness. This is not the right approach. I counseled to continue working on the skill of reading the tape and to sell the stock on the offer when the tape showed weakness. And I did so because this is what an older generation intraday trader, like myself, does.
And I offered an analogy about not learning how to read the tape. To me not learning this skill is like a basketball player not working on their free throws. This athlete just decides to keep clanging their free throws and give up some easy points. This same new trader offered a better analogy. (Hey we hire smart new traders. Obviously this analogy was much better than mine. In the future I will take creative license to just use his idea as my own. After all what is the point of being a partner if you can’t steal the analogies from your trainees.) Back to this better analogy from the youngster who just started trading. Not developing this skill is like the amateur golfer hitting only irons during his round because he never learns to hit driver.
I like that.
Still not convinced? Let’s bring is some famous market players for further persuasion.
Exhibit A: Steve Cohen of SAC Capital: “…everything I do today has its roots in those early tape-reading experiences.”
Exhibit B: Jesse Livermore: ”A battle goes on in the stock market and the tape is your telescope. You can depend upon it seven out of ten cases.”
Exhibit C: Linda Rascheke: “If you can learn to follow the price action, you will be two steps ahead of the game….”
Exhibit D: Paul Tudor Jones: “…..at the end of the day, I am a slave to the tape and proud of it.”
So learn to read the tape. It will help you become a consistently profitable trader. It will give you an edge over other intraday traders."
"In a recent blog Dr. Steenbarger talked about a vital skill for the intraday trader, reading the tape. Dr. Steenbarger, aka the godfather of modern trading psychology, wrote: “My experience is that an understanding of (and ability to read) order flow is one important factor that separates the older, successful generation of daytraders from the newbies who only know simple chart patterns and indicator readings.” I am one from this older generation of intraday traders. And I thought this old-timer could share his thoughts on reading the tape and how it impacts the developing intraday trader.
In the past I have disappointingly heard developing traders state,”I am just going to focus on the charts going forward. I can’t read the tape.” I have heard this uttered on numerous occasions. Not one of these individuals became successful traders.
Recently, our newest class has moved from the first part of our training to the second part, Trader Development. After the Close we answered their questions and discussed what was important on Day 6 of their live trading career. (Oh to be young again. What was I doing on Day 6 of my trading career?) And one of our promising traders discussed a trailing stop for a MS trade today. Trailing stop? My impression was this talented new trader had trouble reading the tape so was experimenting with these trailing stops to minimize this weakness. This is not the right approach. I counseled to continue working on the skill of reading the tape and to sell the stock on the offer when the tape showed weakness. And I did so because this is what an older generation intraday trader, like myself, does.
And I offered an analogy about not learning how to read the tape. To me not learning this skill is like a basketball player not working on their free throws. This athlete just decides to keep clanging their free throws and give up some easy points. This same new trader offered a better analogy. (Hey we hire smart new traders. Obviously this analogy was much better than mine. In the future I will take creative license to just use his idea as my own. After all what is the point of being a partner if you can’t steal the analogies from your trainees.) Back to this better analogy from the youngster who just started trading. Not developing this skill is like the amateur golfer hitting only irons during his round because he never learns to hit driver.
I like that.
Still not convinced? Let’s bring is some famous market players for further persuasion.
Exhibit A: Steve Cohen of SAC Capital: “…everything I do today has its roots in those early tape-reading experiences.”
Exhibit B: Jesse Livermore: ”A battle goes on in the stock market and the tape is your telescope. You can depend upon it seven out of ten cases.”
Exhibit C: Linda Rascheke: “If you can learn to follow the price action, you will be two steps ahead of the game….”
Exhibit D: Paul Tudor Jones: “…..at the end of the day, I am a slave to the tape and proud of it.”
So learn to read the tape. It will help you become a consistently profitable trader. It will give you an edge over other intraday traders."
Reading the Tape - Part One
Reading the Tape:
Before January of this year, I did not know such a thing existed. It was then that I was directed to Fear and Greed Day Trader. I read his blog for a number of days and it was an awakening. I couldn't believe that such a skill was possible. It was, to be redundant, unbelievable. I was very new to day-trading at that time, having only tried it for a few weeks last October. My very limited experience consisted of trying to catch on to other peoples' stock calls in a chat room. I thought day-trading was all about deep background research; technicals and fundamentals, waiting for that special time in a day where everything came together to produce an opportunity to get in. I wasn't even thinking about exits back then. In that context, it was easy to see how I was dumbstruck to find that it was possible to trade with no fundamental analysis, no study of fibonacci or elliot wave or MACD, etc. Possible to trade a significant percentage of the ups and downs of the market intra-day. It was a feast for a starving man. To that point, I had been searching for a method, wandering from position trading to swing trading to trading pump and dump schemes on low-volume, micro-cap stocks to just focusing on catching huge breakouts and breakdowns of micro-cap stocks. I was wandering the desert, so to speak. But, after FNG, I knew my destination, I had a goal. At that time, I didn't even know this skill had a name. Only more recently have I come to know it as "Reading the Tape" or "Trading the Tape." I have found that it is not like some mysterious, undiscovered Tibetan Art form kept in a mountain top monastery. While it is an art form, it is widely known inside trading circles and is really at the source of many successful trading strategies and practiced daily all over the world. As I discover more information on it, I still consider FNG as the gold mine because of his simple, uncluttered approach to this art. Further, his is the only deep-study reference source that I know of which is faithfully updated, intra-day based and exclusively momentum focused, and made available to us at no charge. He has blogged on his disdain of those who charge money for their information, saying (paraphrase)"...dont they make enough money trading?" To the extent that what I put on this blog has any value to its readers, I am committed to never charging admission or putting up ads.
Here are some excerpts from material I found after doing a google search today of "read the tape stock trading." I am breaking it into four successive posts because of size. From time to time, I will continue to post other reference material, being faithful to crediting author and source.
Before January of this year, I did not know such a thing existed. It was then that I was directed to Fear and Greed Day Trader. I read his blog for a number of days and it was an awakening. I couldn't believe that such a skill was possible. It was, to be redundant, unbelievable. I was very new to day-trading at that time, having only tried it for a few weeks last October. My very limited experience consisted of trying to catch on to other peoples' stock calls in a chat room. I thought day-trading was all about deep background research; technicals and fundamentals, waiting for that special time in a day where everything came together to produce an opportunity to get in. I wasn't even thinking about exits back then. In that context, it was easy to see how I was dumbstruck to find that it was possible to trade with no fundamental analysis, no study of fibonacci or elliot wave or MACD, etc. Possible to trade a significant percentage of the ups and downs of the market intra-day. It was a feast for a starving man. To that point, I had been searching for a method, wandering from position trading to swing trading to trading pump and dump schemes on low-volume, micro-cap stocks to just focusing on catching huge breakouts and breakdowns of micro-cap stocks. I was wandering the desert, so to speak. But, after FNG, I knew my destination, I had a goal. At that time, I didn't even know this skill had a name. Only more recently have I come to know it as "Reading the Tape" or "Trading the Tape." I have found that it is not like some mysterious, undiscovered Tibetan Art form kept in a mountain top monastery. While it is an art form, it is widely known inside trading circles and is really at the source of many successful trading strategies and practiced daily all over the world. As I discover more information on it, I still consider FNG as the gold mine because of his simple, uncluttered approach to this art. Further, his is the only deep-study reference source that I know of which is faithfully updated, intra-day based and exclusively momentum focused, and made available to us at no charge. He has blogged on his disdain of those who charge money for their information, saying (paraphrase)"...dont they make enough money trading?" To the extent that what I put on this blog has any value to its readers, I am committed to never charging admission or putting up ads.
Here are some excerpts from material I found after doing a google search today of "read the tape stock trading." I am breaking it into four successive posts because of size. From time to time, I will continue to post other reference material, being faithful to crediting author and source.
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