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

To: sherry who wrote (24)	6/5/1999 10:20:00 PM
From: Eric P	Respond to of 18137

Sherry: There are many phases similar to "the tape never lies", such as "don't argue with the tape", "don't argue with the market" and "No one is above the market", among others. My interpretation of all of these phrases is that the market is going where it wants to go, regardless of where you want it to go. The goal, therefore, is not to argue with what the market should be doing, but to understand what the market is doing, and act appropriately. Put another way, assume you are long a particular stock and holding it for an anticipated X% gain due to it's excellent fundamental and/or technical outlook. Unfortunately, the stock begins to drift lower shortly after your purchase. No need to fear, you reason, 'a mere correction'. After another week (or hour, depending on the time frame of your trading), the stock is down even more. There comes a time when you simply have to admit that your analysis has been wrong, or incorrectly timed. => "The tape never lies." The stock is headed lower for a reason. Get out before the loss becomes even larger. -Eric

To: sherry who wrote (24)	6/5/1999 10:26:00 PM
From: TraderAlan	Read Replies (1) \| Respond to of 18137

Sherry, There are no good books on tape reading since it really can't be taught by educators or by explaining how to do it. So much of it becomes an intuitive part of the market day. The skill requires a lot of input from outside the flow of the tape. This includes time of day, overall market sentiment, the particular stock, the chart support and resistance points. The best learning process is the slow burn of time. Pick your stocks and watch them for hours and hours, until the quirks start to appear. For me, I always begin that process by memorizing key numbers and levels on the price chart. Then I pay extra attention to the tape if/when price enters the "action zone" i.e. the area surrounding these important points, to see how it acts and reacts AND whether I can predict the key reversals in my head. Alan

To: sherry who wrote (24)	6/6/1999 1:32:00 AM
From: Tai Jin	Respond to of 18137

I've also been told that watching T&S can tell you a lot. One thing that it can tell you is what the big money (large blocks > 5000 shares) is doing. I guess it's best not to bet against the big money. But I rarely look at T&S. Instead, I watch the color coded ticker which shows all trades like T&S, but trades that are higher than the previous trade are colored green and trades that are lower are colored red. This makes for a quick visual check on the direction of the stock. When used in conjunction with level 2, you can follow the momentum. ...tai