Real Trades Using Tape Reading With Three Proprietary Traders

in this video see real trades being made using tape reading with three proprietary traders hi i'm mike bella fury co-founder of smb capital and we're a proprietary trading firm located in midtown manhattan and i'm also the author of the trading classic one good trade and the playbook in this video two junior traders and me show real trades in tick by tick detail in the electric vehicle space using tape reading let's get to work on sharing these important trading lessons so you can grow your trading account this is a trade that ty and i made this morning in neo the reason it was kind of in play and gapping up was jp morgan gave it a pretty aggressive price target upgrade of 40. and prior to this trade on my top middle chart here you can see the hourly we had a really strong weak consolidation in this 21 to 22 range so it's a really good place to um we knew there's a lot of buying if this was really gonna hold higher and then i also want to note this is the one minute chart in the bottom left and this is the pre-market range we're kind of looking at this 2370 really got accumulated in the pre-market and then we saw trying to hold this 24 area off the open and i would just add on to that mat just like we were watching the entire ev sector so with tesla uh we had it on our screen as well um to see that similar sector to see if we were seeing strength agreed yeah the fact that tesla was also gapping up today and holding and i had it up here to watch was also a helpful check in our favor the tape will start with this opening drive through 24 which quickly fails and pulls back under twenty four dollars the trade's going to start when we're watching that pullback under twenty four dollars and we see some real accumulation in the twenty three eighties area where we kind of get along for a dip and rip setup so we'll start the tape here from when we broke out to that high that's a new all-time high so thinking if this is strong and it broke out through 24 it's really going to hold that 24 level you can see we come back under some large bids so what do you think about that so matt so matt and ty so when it doesn't hold that 24 level you said i think it should hold a 24 level and it doesn't really hold the 24 level it gets below there what are you thinking when it's below 24. personally i'm thinking if it's going to still be a long or reclaimed 24 the move under 24 needs to be a shallower pullback with the tape potentially slowing so we can really see some accumulation into prior support areas which we also see so the long idea isn't gone when it gets under 24 but we really need to see a change of character under 24 with accumulation to get back over that level i agree with that and just to add on to that we were really looking for to see like a change in the tape to see if we were slowing down and holding at key uh areas so i'll play it forward and this is kind of an area i started getting interested in watching see these bids at 23.80 really holding the tapes really slowing here i mean in like the first 30 seconds you have 20 cents and now we're in like a five cent range so we test under the 80s and quickly come back so now i'm thinking this 80 cents area might be a good area to get long i know 23.70 is pretty major inflection from watching pre-market trading so i'm going to set us so my stops under this level at 23.70 if i can just jump in it does look like there's some buying there at 80 cents when it came into that e-sense it slowed up a little bit they weren't hitting the bids it wasn't dropping out as quickly and then it got below there got below the 80 cents and then re-bid 80 cents pretty quickly which is a good sign so watching it re-bid here and thinking okay if it pulls back and holds over 80 again probably looking to get long which again right there just right there wouldn't get below 80 cents just right there yep and that was the thing that really got me long is we couldn't get under it i got along at four cents above it and i'm gonna set a stop at 23.69 yeah i think that's right i think when it wouldn't get below that 80 cents that was that's a signal right there and tai had a very similar entry i think it might have almost been the exact same price as we were talking in discord and what's your stop right there matt uh like 23 68 69 um so under that 2370 level if we were to really get under there and hold um so really like 15 20 cents risk yeah i mean i think the stops are 69 cents or 64 cents yeah i put in a hard stop soon at 69 cents which never gets hit right here if you want to learn three real world setups that our traders use including the simple setup that we teach all of our new traders and the setup that turned one of our traders into a seven figure big money earner check out the free webinar that we're currently running just go ahead and click the link that should be appearing right now at the top right hand corner of your screen that's going to open up this free registration page in the new window so don't worry you're not going to lose this video you're going to learn more in a couple of hours from this trading workshop than from years of online education so i have my script running for my stop up here 2369 and i just keep that in for the trade and then i'm just thinking okay i've got my stop in i have to worry about stopping out now i just want to see how the trade plays out and think about potential price targets if we really do hold these 80s and get that dip and rip pattern which we see a lot on strong opening drives below 80 cents now so that's not optimal not optimal yeah but comfortable with my stop and know they can still rebid this 80 cents which is why uh a good stop level is really important to be able to keep you in a bigger trade yeah i think that's a stop 69 cents and uh stop the tape so that trade right there to me is something i characterize as well it's not really doing what i thought it was gonna do i thought right when we mentioned it right when you entered you did a great job of entering totally like your entry that was that's a spot on entry to me that's along right there and i like your your stop's terrific too but i thought it was going to go up a little bit quicker a little bit earlier and it didn't and so i will sit there a lot of times and say to myself i have a trade decision do i want to just take off half do i want to get flat because it didn't do what i wanted to do right away or am i just going to let my stop handle the trade and in that case i would have let my stop handle the trade because the stock had touched and ticked a new high and it has ability to really run so i would in that scenario i don't love it and i prefer it it went already but it's worth it to just not get in there and get out of here long and just let the stop take care of the the trade you just set your stop at 69 cents it's going to take me out at 69 cents or not i'm going to try and capture this this a decent move to the upside and go from there so watching how the 80 cents rebids if it does i see those bids at 23.70 so you said just kind of letting my stop do the work because what i was looking for didn't happen right away but we're picking up some speed over the 80 cents level i really like that accumulation i added a little bit there at 90 cents kind of expecting the breakout over 24. just an extra yeah i think you got a bid 86 cents there matt i think that's a 86 83 81 bids i was afraid i was gonna miss them when i saw such a strong up move in the 90s i think so i'm thinking this is really strong if this is really that dip and rip set up it should hold 24 and really continue to upside and probably make a new all-time high or at least test that level at that 24-26 so i took my first sale there 24 18 just in case we don't make that new high and i had that momentum ad it's kind of just taking off that momentum lot for was risking like five cents on it made like 40 cents but now i'm holding that initial core for the breakout to new all-time highs and i sell a little more another fourth as we make that all-time high again and now really trying to let the last half of my position work for me i want to mention something tai and i were noticing in real time was the volume wasn't as convincing as we thought it really should be after accumulating so much and breaking to a new all-time high so that's another reason i was a little more defensive and taking profits into the new all-time highs so you can see this volume candle on a breakout to an all-time high was pretty shallow and we're getting a deep pullback from there so still thinking with a long bias and letting my stop work for me but definitely not as much follow through with as much volume as we were expecting so that was definitely one thing that was maybe not a check in our favor to keep us open-minded to a potential move back under 24 no i definitely agree with you matt and just adding on i think our uh our entries from like the 23 80 80 mid 80s that really helped us to give us the opportunity to really kind of try to catch a bigger move than just a scalp on this play exactly buying the 24 breakout would have been a really tough trade and hard to stay in after such a pullback from all-time highs so i think that that noticing that entry is really so important for a trade like this where you want to capture the bigger move so now i'm going to skip ahead a bit you can see we tested under that 24 but at this point i still have the same stop on the second half of my shares i don't think we're really wrong until we can get under that 23.70 again since we really saw a lot of accumulation yeah but you do want to be thinking about it holding higher than that you know in the best setups if people are really if people really need the stock they're not going to let it go back to 23.80 right that's true definitely not that it can't go up but you you do want to be thinking about what's the most likely scenario for this to be strong and maybe go find 25. yeah you know you want to see them buying that above above that 24. you don't want to go back to the same area definitely and ty were talking in real time about moving our stop up especially to this 23 like 90 where vwop is and this wick low so definitely kind of moving up that trailing stop no just to go along with that too i think um once we broke 24 we immediately re-bid above that and that gave us a really good uh place to risk off of now we're really talking here we're like okay like this is stepping up we really think some volume should come in if it's gonna make a new all-time high again you can see here i update my stop to i don't remember exact price to 92 cents so like right below v wap and that lit wick low as we're saying should really be holding higher if this is gonna have continuation and then this is the really make or break point we get this nice wedging action talking to the guys in discord and i'm like all right i'm moving my stop up but we should be patient with this anthony pointed out like that's a really nice wedge action going on just give it some time and i definitely agreed with that keeping me still in all my shares on on this breakout or the second half looking for new all-time highs scaling out some like 46 cents 53 64. as that'd be coming up on almost an atr move as well like 2475 would be a full atr move from the dip area so let's get forward a bit and you see we break out but again this volume is just not as convincing as breakouts we've seen in these ev names before which is such explosive moves makes a new all-time high again kind of stalls pulls back a little more volume came in but still nothing really considerable compared to the open and making a new all-time high which is also why i'm scaling out into strength more than waiting for a drastic pullback because i think it could pull back pretty harshly as we saw earlier when we pulled back all the way back under the 24 level so now i'm down to a fourth of my shares i know ty and i are both down to at least under half or a third here as we were talking about tape slowing i think i sold into strength i think you might have taken off sometime when you saw this kind of change in character and pull back it's not really going up yeah showing lots of new buyers it doesn't mean grinding action yeah yeah i wouldn't really expect it to look like that agreed so that was definitely said just in the back of our mind but just kind of after pulls back just picks back up like no real like explosive move we just said i think you want to be thinking about right now what's going to make this really go up do i need to see some shorts get trapped do i need you know do i need to see some shorts get trapped you might have seen that a little bit around that 2380 level do i need to see some fomo buyers who are just going to chase this thing and and you know or is it just going to be as ty said just a slow grind is that is that what that play is but you want to be thinking about that as you're in this trade definitely so we'll see here i'm gonna exit my final shares as we make a full atr move but this thing just keeps moving on the day and just it looked better there guys that that actually you can see the way the velocity on the offer that was that was different at 70 cents a little bit of a change on tape for sure for sure there was some velocity right there on the offer that you didn't see when it made a new high that you guys called out there was that grinding action that got replaced with some velocity on the offer right there yeah right here those offers all get taken out you see those 70s even get decremented a good bit and when something gets like the top of the move the top of the intraday move and then you start to see lots of paying on the offer you want to keep that in the back of your mind as this thing may have some more to run agreed and i was also i think thinking in the back of my mind what we talked about the other day about selling kind of on an over extension over the nine ema you kind of see i zoom in there and this is my nine email purple line i'm like all right like that's more volume than i'd seen in a while we did see that change in pickup so as this is slowing and extended from the 90 in may that was another reason i wanted to take profits there but still need to leave a portion on until we really get under the 9 ema as my trailing stop i just want to yeah add on to that i think like our average price was like 23 you know mid 80s like really we definitely should have kept at least something on or even put it in a an lte account and just kind of like not really focus on it as much or have a hard stop in place because this could potentially run especially with this news it's a pretty aggressive price target raised by a major bank so this definitely could be a fundamental shift there can easily be multiple time frame traders in this as well looking for swings and things of that nature as we saw clear accumulation for the full week almost two weeks before this breakout in this 21 to 22 area so we really know that that's another reason this had potential to move today as such strong consolidation like that just gets more traders involved just leading to more opportunities for outsized moves short squeezes anything of that nature yeah and the dip and rip is playing for a bigger move so i agree with ty there's definitely trade decisions to take some off take some risk off into an extension above the nine ema it's not a it hasn't been a flat yet though right so i'm not in the trade anymore but i'll just kind of skip ahead and show what it did for the rest of the morning and this 25 level is going to be important here we get our next major consolidation area see it's trying to really hold under can't break down underneath these 90s on the bid really hold and then when we get back over that 25 we just see this grinding again not like crazy breakout volume but still making new all-time highs taking out those 20s that were stacked on the offer so this could have easily been something to just leave a trailing stop on that 9 ema and i could have captured almost another 75 cents on the trade and still just skipping ahead it grinded up almost two atrs from the dip area rather than one like i was more expensive would you actually go back to that 25 or that 1002 level that's when me and another trader tristan were watching and we kind of saw uh at like 1002 and uh time-wise yeah oh oh that was kind of like that changing character where we do really see that kind of like a little bit of a pullback i think it was in here we're coming up on 10 002 so we're really stalling in the 60 cents there right here i think right tai he's 16 trying to hold 60's we're trying to hold and then right here yeah we saw this kind of flush and expecting a bigger pullback from that area that's like the first real red candle after this long run up extension from the previous consolidation and now like you said just using multiple time frame analysis like looking at the five minute and hourly we are kind of getting it over extension um and so that was something that we were trying to take note of to you know to really find you know where can we see a smaller pullback to really add on to those positions now we can see on the rest of the morning we finally started to get some major consolidation and this this real run from the dip and rip is kind of over and gonna have to see how it interacts at the 25 level if it can still hold higher anything like that so now this is not really something we're making trade decisions on and again now just something we're monitoring for potential higher time frame trades again as there's going to be a lot of eyes on this today and i'm assuming tomorrow and going forward on such a big news catalyst and 11 times our ball all-time high moves so yeah definitely seeing how these dip and rips can give you good prices should also give us the ability to stick with this trade longer which i definitely think going forward is something ty and i will be able to improve on especially in real time talking to each other reminding each other what we're looking for to really get out and i think just like pushing each other in that way is going to be something that helps take our trading to the next level for sure question question from greg is the grinding the result of people chasing the the grinding actually tends to be from a an automated buy program that gets put in and it's actually the opposite of chasing it is people want to buy it but they're going to be patient to buy it and they're going to use some institutional algorithms to buy it as best as they can and so that is one of the things that you want to look for and and so if you don't see lots of buying the offer and that that doesn't necessarily mean that the stock can't go up a lot more it can mean and you should look for hey maybe they put on this passive buy algorithmic trading program buy program and if you notice it pulls back and doesn't really go lower and pulls back and doesn't really go lower and pulls back and doesn't really go lower and slowly makes a new high that can be the indication of one of those institutional algorithmic buy programs that somebody with big money has put on that you can spot a question from paulina do you choose the ecn for your execution or is it automatically choosing the best one you do choose the ecn for entries so on our platform you can toggle through and choose the one you want to use and you can also toggle through and use any of the hidden order types that we have available on our platform that you may want to use to get yourself better fills and you will find in certain stocks that you do have to get that right you do have to get the ecn right you do have to get whether or not to hide it or show it right as well oftentimes on a professional desk like ours in a stock like this we're hiding a lot of our orders we're using the the hidden order flow which which is a big advantage trading with the prop firm hey go ahead and click our subscribe button so you don't miss any of the videos they're producing for you and the trading community and please take the time to add your feedback in the comments section for what videos you'd like for us to produce next and what you found helpful from this video from all of us at smb train and trade well

Channel: SMB Capital

Views: 40,679

Keywords: stock market, day trading, smb capital, trading, investing, markets, wall street, stock trading, options trading, options income, economics, finance, reading the tape, level 2, how to read the tape, making real stock trades, prop traders

Id: Iiyns6YNt5k

Length: 23min 58sec (1438 seconds)

Published: Sun Oct 18 2020