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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Richard Estes who wrote (5244)	11/7/1999 5:39:00 PM
From: TraderAlan	Read Replies (1) \| Respond to of 18137

Richard, If your stock ticks 1/8th of a point over a support level and you see a flurry of trades at the ask, what do YOU think is happening? Not rocket science, is it? The mice aren't very sophisticated. The power in the T and S is the "cadence" more than the price. If the flurrry eats up the size at the ask and you get another uptick, not much more you need to know. Alan

To: Richard Estes who wrote (5244)	11/7/1999 6:11:00 PM
From: Eric P	Respond to of 18137

Richard: Given you can sell at ask, and buy at bid, (I do this 90% of time). There is no way to know what is a buy or sell. Given that there is no indication as to a long or short, there is no way to determine direction of trade. I know it's obvious to all of us that every trade is a buy AND a sell. I think the important question is who is more eager to get their position established, the buyers or the sellers. If a trade goes off on the ask, it indicates that the buyers are more eager/urgent to initiate the trade than the sellers, they are willing to give up the spread to purchase the stock. A flurry of trades at the ask indicates buying pressure, represented by the large number of traders willing to give up the spread in order to initiate a trade with an existing sell order on their Level II screen. This buying pressure will typically indicate an increased likelihood for higher prices in the short term. Good luck, -Eric ericpatterson@home.com

To: Richard Estes who wrote (5244)	11/8/1999 6:55:00 AM
From: Robert Graham	Read Replies (1) \| Respond to of 18137

I have stayed out of this discussion you have been having related to the topic of tape reading...until now. You go ahead and think when price is moving up being well-supported by a series of prints hitting the ASK, that it is...SELLING interest in the market, yes, SELLING. And I suppose price moving down being well supported by prints hitting the bid is BUYING interest in the market? After all, if you are doing it, then everyone else has to be doing it, right? Selling at the ASK and buying at the BID? Whatever works for you. Damn, those Jane and Joe public traders are a PREETY SMART group, aren't they? Just think, they have been WAY ahead of you all this time until you figured this out for yourself. Correct? :-) And when a trader like me sees the tape telling me that the activity showing up on the tape is not valid, essentially one large headfake, and be right something like 9 out of 10 ten times whent the tape indicates this to me, I must be one damn lucky trader. Yes, everyone is lucky in this game who uses the tape for their trades, right? The tape does not paint a valid picture of buying and selling interest. What the tape is telling the trader is not real, just an made-up story. It shouldn't work for them like to buy genuine buying interest and inauthentic buying interest, should it? Remember when you commented on my initial observations several years ago on IFMX that it was not possible for me to understand the MMs actions since there are a group of INDIVIDUAL traders making a market in the stock? And how I was essentially telling you the tape was giving me a different picture, that it is almost like one MM managing the market in the stock? How come much of what I already knew the MM to be doing like this example I foun to be well-documented by the SEC? This includes all of the MMs following the lead MM (axe) in a given stock, and how the system they had going for themselves kept them inline as a group, including threatening each other over the telephone when one does not follow the group with the axe as the leader in making a market in a stock. I already knew they were functioning together as a group, but I did not have the specific details on this until I read the SEC report. For another example how I had seen at times a net accumulation of stock by the MM. And I actually began to think those large prints that followed were somehow related. Lo and behold, I find out MMs do accumulate stock for their customer which do in the end come out as large final prints. I got it all wrong from a read of the tape, correct? Or are you in denial where you think this is simply not possible from an ongoing reading of the tape? IMO the issue to you has become more important than the reality. The issue has been filtering the reality for you that you have been posting about. You have actually been painting your own picture about what the tape can and cannot tell on the trading action of a stock, that which you have been asserting others have been doing to their own disadvantage. Who is right? Probably those who have been making the money. I do think a reality check is in order here. Aside from the more serious message I am attempting to convey to you here, I do think you are one of the more well-informed traders in the market. This is what is making your posts on this topic seem all that more difficult to believe. Bob Graham

To: Richard Estes who wrote (5244)	11/8/1999 7:39:00 AM
From: ig	Read Replies (2) \| Respond to of 18137

Knowing Buying From Selling While it's true, Richard, that one cannot say for certain the status of an individual trade, we don't make our trading decisions based on an individual trade; we make them on, shall we say, "a preponderance of evidence." You say that you sell at the ask 90% of the time. Why not 100%? Answer: because you cannot always get someone to meet your price. When many trades are printing at the bid, it is strong evidence that sellers at the ask are not finding enough takers at their price, so they are hitting the bids. Yes, one cannot say for sure that a particular print at the bid was not a buy, but one can make a very good bet -- and that's what we do. When we see a stream of prints at the bid, we know that it represents selling pressure, even though we cannot vouch that every single print is a sell. If you are trading in a very slow market, only a few trades per hour (god forbid), then you have less basis for determining what is selling and what is buying. I think there may still be a question, though, about determining the meaning of single large blocks. Does a large block printing below the bid mean the same thing as a large block at the bid? Traders often say that a large block below the bid is a bullish sign. If someone can explain that to me, I would be grateful. ig