I have learned from many sources: others here at SI and the rare "find" in a book. I always manage to locate the good but rare books, I think I have a "nose" for this.
I fist would recommend going through all the past posts on the "From the Trading Desk" thread. There are some excellent articles in magazines, like the Forbes article on MM manipulations. And then there is the best book I have found that is a good single source for this topic: "West of Wallstreet" by Goerge Angell and Barry Haigh. This book is nothing short of excellent. It is out of print, even though the book was written in 1988. I think Trader's Press still has an inventory of this book. There are supplimentary books that one can read, but this is the best book that I have found on the topics it covers about trading and what happens "behind the scenes" with respect to trading. This book's focus is floor trading the futures market. But in my talks with others and what I have read in other books, much of it applies to the stock market. But then this is where experience following the stock market comes in handy to help determine what applies and how it applies to the stock market. Unfortunately, from what I can tell there is not such book that has been written specifically for the stock market. Still, since this is written by an S&P futures trader, allot more than I expected directly applied to the stock market. IMO much of the same occurs on the stock exchange floor.
I taught myself the little that I do know about tape reading. I did this by starting with some basic concepts derived form my understanding of technical analysis in terms of price action of stock, and followed the "tape" to learn. My experience here has proven very useful for option trades. This is wherefor instance you can see support and resistance levels in action. Also, you can get a clue as to the quality of a move made by a stock, and where the big money is heading: in or out of the stock. IMO you can see accum/dist much more clearly and accurately with tape reading. But one of the downsides is that if tape reading is not approached with discapline, the tape reader can get "thrown around" by the gyrations on the price of the stock, and end up making very bad decisions. So I do not recommend this at all for beginners here on this thread andothers who have not developed a discapline to short term trading. No offense meant to anyone here. Tape reading is definitely a long term learning experience.
I think the best and really the only book on tape reading that is worth looking at is called "Tape Reading and Market Tactics" by Humphrey Neil. This is out of date, but IMO much of the thinking behind what is shown in this book still applies. I have learned allot from this book. From my talks with other tape readers, much of what I learned from my reading of this book still applies to the current day market. This is another out-of-print book available at Trader's Press.
I am still thinking about starting up a Tape Reading thread which I have a committment form Steve Goldman that he will support my efforts and keep me "honest" (accurate information). I also am thinking of creating studies in tape reading in order to see in action what is discussed, to see the technicals of a stock in action on the tape, and to discover ways it can be applied to trading. This is very ambitious undertaking fo me, particularily since I am interested in only providing accurate and usable information tootehrs on the thread. So I need to be confident that I will be supported by other very experienced tape readers, and I have Steve's concentrated support. This is what I need to work on.
I hope this helps.
Bob Graham
PS: I have been working in various roles in the computer industry for close to 15 years. I am not counting time in college that some apparently do. It has been only the past couple years that I decided to take the plunge in starting up my own business as an independant consultant. Boy, was this an eye opening experience for me! I really should of known better to plan for this, but my particular situation made that dificult to do. Fortunately, just before I almost went broke a second time, I ended up with the R&D department of a large company in the medical imaging business. Fascinating stuff here. So I have been busy working on my current project with this company. If this project is accomplished to their satisfaction, which I am confident it will be, I will have at least 3 years of work coming from them which is very nice indeed! More money available to trade options and invest, right? ;)
Good Trading! |
