Reading The Tape! 📜 (Day Trading Must!)

[Music] hey guys welcome back to a brand new educational video here at market wisdom so glad you joined us this afternoon make sure you hit the subscribe button and hit the like button as well as we continue to bring you as much possible education content that we can we're going to talk all things reading the tape this afternoon and the importance of understanding what it is exactly that we're seeing how we can decipher what's important some things not so much and how we can make trades off of what we're seeing on the tape let's bring in neil and sean here and we'll jump into reading the tape guys a skill that does definitely take time to kind of develop and work on throughout your career but a vital part of training especially on teeny tiny time frames like we look at a hundred percent and i think most people they're familiar with what a chart looks like that's their sort of window or gateway to the market uh visually at least and the tape is something uh otherwise known as the time and sales this is just simply the recording of all of the prints that are going off in the market and i'm trying to pick a stock that has a little bit less price movement here just to show you what we're talking about i've got a level two here you got the bid ask supply and demand but here is over the tape you see the price every single print is going to indicate what price has come off uh the amount of shares is going to trickle through you'll see some that are sub 100 you'll see some a little bit larger than that the market center just simply refers to the different gateways that you can access the individual markets this happens to be the nasdaq so there's bats zed there's arca which is p d which are dark pool prints and then the time that the prints come off of so you get all of that together and it's able to show you actual executions supply and demand is fantastic on the level two it'll show you where people want to buy and where people want to sell at any given moment but at the end of the day it takes two to tango and the only thing that really matters materially is where do the executions come off of so that's what the the time in sales is uh it's sort of an oversimplification and i'm showing you a stock that is not moving very rapidly uh but but certainly sean you know how fast that tape can move and the velocity of the tape sometimes uh can be important to traders right uh yeah exactly that's exactly what you're looking for you are looking to see how the tape moves look i blew it up a little bit here uh for you so other things that are important too is just the time you know this is intel obviously it's 10 million shares lots happening on this name tons of trades going through and you can see the time column here uh definitely giving you that all of this volume all of these trades going through in just a matter of seconds so that's something that's very very important to notice and then you can go over to a stock maybe that's not moving uh as much and you can call up anything uh we can just go i'll just call up one right here randomly uh this is just one on the uh venture exchange over here look you may say oh this stock's moving here it's up five percent today but look at look at the time in sales there's a few trades here at 9 30 one again at 12 57 this is the whole day so what the time and sales will do to you this is this is a very extreme example of course here uh where you don't get much action at all on a name like this but this is what you're looking for this stock not moving and then you go over to another stock watch watch apple here and how fast this one moves uh you got to put over the uh market and there you go here's apple just cruising on tons of trades where you can't even keep track of this trade back and forth here on apple a good example that i want to bring up that you might see sean you have all these different colors popping through here what do those colors mean right well sometimes trades happen in between the bit and the ask so anything that i have that's green that shows up will be coming off of the ask i think that's very important for a visual representation and then anything in between will come for me it's blue some people use yellow depending on what's good we of course do the show we try to make this as easy as possible anything coming off of 93 will stream red so very very similar to what you see on candlesticks down here green would be buys so therefore anything coming off the ask anything red which down here you can see ourselves anything coming off the bid would be sell orders so for me those are the two important things and right now siri for me as a day trader there's no interest here it's not really trading you see that this is two minutes top to bottom you have about what what is it 20 25 trades here uh at most and it's taking two minutes for 25 trades let's go to a stock that had earnings today target watch how many trades uh this name is blowing through here as you're going to see there's some red prints we didn't get any on siri so as you see here this is just a matter of 10 seconds and you're getting a lot of trade so yeah you definitely want to look at some stocks that have some momentum behind them an easy way to tell that is by looking simply at the time of sales okay so there's a little explanation guys as far as what it is that you're seeing or what is being displayed in the time and sales and what each individual piece of information actually means to you as a trader so now let's talk about actually using it uh two trades one of those uh or one of the ways that we can use it to trade uh is to filter out some of the kind of noise we talk all the time about uh noise on the tape so some of the smaller prints some of the ones the twos you know partial fills there are ways you can actually filter those out and just be shown you know the big prints where are the big prints coming from what gateway what marketplace things of that nature so let's talk a little bit guys about how we can use filtering tools and the time and sales to help us with our trades yeah sean pulled up target i'm going to go with apple doesn't really matter i can pick any of these faster moving stocks you talk about momentum you want to see where are prices where buyers or sellers are stepping in at a large level and where does that momentum come in uh reading the tape i've got the traditional tape that i showed you before you're seeing all these active prints you know multiple you know 10 prints a second whatever it might be on apple and here i have it filtered for only prints that are over 100 shares so we're getting rid of all of these small little 1 15 20 share prints and this is lunchtime you can see that basically nothing is almost nothing is coming off the tape you know you are getting a few prints and one of the only ones that are greater than 100 in this case and it gives you a different feel you know you can filter you'll have to figure out what works for you which stock is uh you know you want to filter for 100 maybe there's some stocks you want to filter for a thousand maybe some 50. but once you get that sweet spot it gives you an idea of where the the bigger money might be coming in and driving a price action and when you want to stay away if it's just a bunch of uh small orders filling through uh it's sleepier action and sean mentioned in siri i don't want to be touching because it's not doing anything well you know apple when i first looked to it just now was doing literally nothing there were no prints over 100 shares now that's actually starting to pick up a little bit and maybe that's the type of indicator you care more about if you want to be more of a you know swing or holding a little bit longer maybe taking a little bit more size you want to make sure there's true liquidity and that's going to be based on what you see in the tape so uh hopefully uh we trade with daytrade the world we've got filters here as you can plainly see hopefully that's available to you on your on your platform if it is i think it's almost mandatory to at least check out if you don't use it fair enough it's always good to understand what's available to you because at some point in the future i think that kind of tape reading is going to be important to any kind of momentum trading success yeah i'll take it uh one step further as well i mean that's just for size i think that's super important we just did talk about market center as well and right now yeah there's over 50 dark pools depending on what market you want to look at and a lot of those trades will be the ones that neil uh was mentioning that you'll see just like this fort this is ccl carnival cruise you know 40 look at the price here 14 87 8 3 9 shares like how am i as a trader going to use some of these prints here at all uh for for some kind of information i don't think i'm going to so what you can easily do is just filter out based on the market center and again we're using the pro 8 platform brought to you by daytrade the world so if you're looking for a new platform that's a fantastic one check the website out but if you look here look at the market centers what i would choose to do is probably like here's another one 9905 9002 9001 you can get rid of those by simply just selecting the dark pool that you want to get rid of and in this situation you got to push activate you select it and then you're going to get rid of the d prints just simply by putting okay and then all of these that really don't mean anything to me at all all these part fills all these random fills you're gonna clear them out and not worry about them at all and there we go so we hit it and now of course this column is highlighted for your viewing pleasure you're not gonna get any more of those random prints here unless they are taken off of either a lit or dark market like bats here this is a bats half print half prints are kind of cool a lot of traders trading within the half print but i'm not getting any of those questionable you know trades 89002 89.005 and then just like the example that neil showed now you're seeing a much calmer time in sales and it's much more you know easy to focus on your levels and you don't need to worry about a lot of that gobbledygook that happens in between prince a great example of uh you know in the middle of the day in the middle of the afternoon just in fact how much volume is taking place in the dark market and not on lit venues a live look there at uh a level two uh one more thing i want to touch on before we wrap up here guys and that's going to be simply momentum trading so if we're trying to be long say an apple or a tesla or whatever to pick your stock coming up to a significant level so if there's a significant level uh that should be resistance or in the past has been resistance we're seeing size on the level two you know they're buying it up into that level we're anticipating the break one thing we can do with the time and sales is simply identify the fact that maybe the momentum is not there to carry the stock through that significant level if it's sitting there just in front of a significant level just printing the bid sellers are just printing the bid and printing the bin printing the bed there's no point in getting along thoughts guys if you think you're absolutely right about that brandon it's something you definitely have to consider you know in a situation like that maybe you just need to see it trade through that price you know and we just talked about stop orders where it may trigger uh pass and let's talk about like maybe it's like 470 on apple happens to be a shy of that like maybe it has to print through 470 before you're interested uh because if you get up to uh 69 50 all the way into this 95 97 98 99 and then all you're seeing is it ticks up on very low volume uh it might go up a penny but there's not a lot of green buying through meaning any quotes that were there in the offer might have pulled rather than been filled because there were no buyers up there that can be a sign of weakness and that just means it's sort of like filling a gap up but there wasn't any buying into the move uh in which case it might fall down down rather quickly so you know it's certainly something you have to consider you know you're going to see here just when you look at a level two look at the actual liquidity on the bid ask versus the amount of prints as it travels through a price a lot of what you see in terms of quotes is not necessary look some of it can be a market making and quote stuffing but it doesn't always print there are orders that pull the time and sales lets you know what was real who wanted to actually trade and that's ultimately what's going to matter to you so when we go to a big level people have to be willing to buy into it if it just floats up there because people pull their offers likely doesn't have that juice to get through like you mentioned brennan uh here on nikola i also actually had uh another example today uh this was during trading today and i think this was uh very important that we were able to find out this is on our live show uh i went long nicola on this break of 44.50 and then we saw and i talked about it all on the live show today uh there was a refreshed buyer up here uh maybe if i drop this down to one minute it'll look a little bit better there was a refresh seller story against my bid right up here at 60 and that comes out that's the high of the day notice the seller brendan was sitting there and then on the on the time and sales they just kept taking it it was it was uh 44 60 460. 40 over and over and over and over again and the seller did not break so that was a perfect indication that there was someone there selling so you can also use the time and sales obviously to identify possible iceberg or orders there where there's perhaps more liquidity than they're giving you an idea for so that allowed me to get out of some of the trade there and then realize i was wrong and get the rest out back down here once this market just tanked off of that seller so i think that's very important to also understand tons of advantages to time and sales and tape reading uh understanding uh you know if you're looking at charts guys you're not seeing the live market you're seeing what has happened in the past so everything that is being printed on a chart has already taken place if you want to see what is happening right now we have to be looking at a level two and time and sales so a little bit there guys on how to read the tape and some significant uh you know events that can take place that we can identify uh by watching uh both time and sales and the level two hope you learned something there take it away valeria hey brandon thank you for this great explanation guys please subscribe to this channel and join our live trading show every day at 9 00 a.m eastern time

Channel: More TraderTV Live

Views: 24,271

Keywords: day trading for beginners 2020, how to start day trading in 2020, how to read level 2 and time and sales, how to use level 2 and time of sales day trading, how to read level 2 quotes, how to use level 2 market depth, how to read the tape day trading, how to read level 2 for beginners, how to use level 2 day trading, how to read time and sales, reading the tape explained, tape reading for beginners, technical analysis, tape reading, master reading the tape day trading

Id: furwWGCMcfM

Length: 13min 21sec (801 seconds)

Published: Thu Aug 27 2020