tape reading for large float stocks

[GoldWTcal 1]

Good morning:

A question for those experienced day traders.

It is said that tape reading is important for day trading - time & sale and level 2 order book data. Because it gives more details for trading.

But my question is, when day trade a large float stock, such as AMD ( Advanced Micro Devices, Inc.),

which has high daily volume ( AMD has 70 - 90 Million shares traded per day ), very small spread on NBBO ( usually 1 or 2 cents ) and therefore very small slippages, 

do you still use tape reading - I mean do you still watch the level 2 and time & sales data when doing the trading. Does tape reading still make any sense for these large float stocks at all. 

One more thing to add is, you know, the data in the level 2 and time & sale windows is moving so fast for a stock like AMD, and therefore hard to catch and keep track of.

thank you.

[Alastair 110]

1 hour ago, GoldWTcal said:

 

do you still use tape reading - I mean do you still watch the level 2 and time & sales data when doing the trading. Does tape reading still make any sense for these large float stocks at all. 

 

For me YES.  Tape reading using the SMB training concepts allows a trader to fine tune an entry and stop placement A trader will watch the inside box and T&S as taught by SMB for best entry. This will improve ur R vs R.

 

1 hour ago, GoldWTcal said:

One more thing to add is, you know, the data in the level 2 and time & sale windows is moving so fast for a stock like AMD, and therefore hard to catch and keep track of.

.

When transactions are moving extremely fast you still watch the inside box but may focus on the colors being displayed in T&S and lowest TF of chart as possible. But I use SMB model of tape reading.

[GoldWTcal 1]

Thanks, Alastair

But, what ( or who ) is " SMB " , sorry? 

Edited July 19, 2022 by GoldWTcal

[Alastair 110]

Sorry pls forgive me.......SMB is the initials of SMB Capital a prop firm that trades and has a youtube channel.

The channel teaches an very very basic intro in the SMB concepts., see it here  https://www.youtube.com/user/smbcapital/videos

They have made a few presentation to the BBT community.  Bella and Andrew are friends.

Check it out.  Many many vids including tape reading.   They do not give away the core of the training.

Not sure how advanced u are on tape reading but I wrote some basic stuff here........https://forums.bearbulltraders.com/topic/1916-bookmap-for-learning-level-2-and-ts/?tab=comments#comment-14463  and I point to some of the SMB vids.

 

[GoldWTcal 1]

On 7/19/2022 at 2:34 PM, Alastair said:

Sorry pls forgive me.......SMB is the initials of SMB Capital a prop firm that trades and has a youtube channel.

The channel teaches an very very basic intro in the SMB concepts., see it here  https://www.youtube.com/user/smbcapital/videos

..........................

 

Thanks a lot, Alastair, for this information. 

But, again, for those small float stocks, ( e.g. with daily trading volume of 100K - 500K shares per day ) I have no doubt that tape reading is very helpful to determine the entrance and place stop loss, find trading opportunity, etc.

I understand some of the information from tape reading is not available from the candlestick charts. They provide more detailed, fine information.

However, the question is, for a large float stock, such as AMD, NVDA, etc, the spreads and slippages are so small, if you watch the level 2 book data, they are so "thickly" traded, with very good liquidity.

and again, the data is moving so fast and hard for human eyes to catch them. 

I am just wondering if it still makes any sense using tape reading when trading these big stocks.

 

 

[Alastair 110]

1 hour ago, GoldWTcal said:

However, the question is, for a large float stock, such as AMD, NVDA, etc, the spreads and slippages are so small, if you watch the level 2 book data, they are so "thickly" traded, with very good liquidity.

Tape reading......is just another indicator........the trader uses it, if it fits into ur strategy.   If it does not fit, drop that indicator.

Some traders do not use RSI, others love it.  It boils down to ur style of trading and objectives.

Some traders do not use candle stick charts, only L2 and T&S to trade.

U need to decide that.

 

 

 

[GoldWTcal 1]

3 hours ago, Alastair said:

Tape reading......is just another indicator........the trader uses it, if it fits into ur strategy.   If it does not fit, drop that indicator.

Some traders do not use RSI, others love it.  It boils down to ur style of trading and objectives.

Some traders do not use candle stick charts, only L2 and T&S to trade.

U need to decide that.

 

 

 

Thanks, Alastair. 

I don't disagree with your comments here. That is true. 

Honestly, what I truly want to hear by my original post is, if some experience day traders can confirm for me ( with their experience ) about my thoughts ( guess ) -

that is, tape reading is only helpful for trading small float stocks but not suitable for the large float ones ( to be more specific, float shares > 500 million shares, daily volume >  1 - 2 million shares per day ).

 

[Alastair 110]

A perfect response to ur question from a professional trading company.

Why Reading the tape is so important ($TSLA Example) - YouTube

 

[GoldWTcal 1]

On 8/3/2022 at 2:26 PM, Alastair said:

A perfect response to ur question from a professional trading company.

Why Reading the tape is so important ($TSLA Example) - YouTube

 

Thanks, Alastair, for the information.

 

I may come back to this post for further questions - this is an interesting topic to me.