A Question on Reading the Tape and Skill Building

Jan 28th, 2014 | By | Category: General Comments
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Hi Bella,

Hope you are well. I’ve been going through the foundation course material and have started working onask Bella “reading the tape”.

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Can you give some guidance with following two questions? Thanks.

1.      For a new trader is it better to concentrate on one stock and watch the prints and inside box or is it better to concentrate on more than one stock and get used to handling multiple positions.

2.      Also, can you please advise whether you have specific stock(s) for trainees to work on, i.e with less volume and volatility, which should be used to build a solid foundation in tape reading or should I just pick a stock that’s right for me? I’m thinking of stocks with an ATR less than $1.

Bella

1. Yes, for learning to Read the Tape. You will get more out of the prints and tape this way. I would like to be very clear here that this is just for developing your tape reading skills. As you progress as a trader you will Read the Tape, but also consider:

a) The Big Picture

b) Intraday Fundamentals

c) Technicals: long-term and short-term

d) Reading the Tape

e) Intuition

2.  We recommend for new traders to start with stocks under $60, more than 1m daily in volume, a short interest of less than 20 percent, an ATR of .8 or greater, and fresh news. These are the best stocks for you to build your tape reading skills.

Let me say one more time that this is just for building your tape reading skills. At the start of your career you must build trading skills to develop a solid foundation. Then you build your PlayBook. Then you can grow quickly from this position of best setups for you with trading skills.

We rarely make trades just off the tape in these market conditions. We do if we are scalping or momentum trading. But for our Trades2Hold and position trades we consider many factors.

I hope that helps.

Great job working on your trading game!

You can be better tomorrow than you are today!

Mike Bellafiore

Related blog posts:
How to Recognize Real Order Algos
The 800-Pound Gorilla in the Room: Exits

One Good Trade
The PlayBook


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