Reading the Tape Questions and Trading from the Middle East

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Dear Bella,

I can’t find the words for thanking you and the folks at SMB for the great free educational staff you post daily on your blog, I just can’t.

I want to thank you also for the great course of reading the tape I have taken , It didn’t teach me how to read the tape it did taught me how to really trade, what a course!

Thank you for teaching me how to read the tape Bella.

–          I have a question: after opening a demo account with ($$$- deleted for compliance reasons) Trading, their platform has blue prints in the time and sales, describing it as an Irregular trade which sometimes is transacted against the inside bid and sometimes against the inside ask. When I asked them about it they said it’s a trade between inside bid and inside ask! But white prints are already there, and blue prints are against the inside market! And rarely it has 3 decimals, I am confused about these irregular trades (blue prints) can you explain to me what the heck are they?

–          Another question please: I start recognizing the inflection point by watching the tape but how can I just recognize it from the charts alone? Is that possible so I trade off them? I have read a previous blog by you telling that will explain later or will help further illustrate the concept, but never did:

–     I hope to join a prop trading firm someday, I searched the web and the closest one although an arcade which let some of their best trainees trade their money after paying for about $ 2,500 for a one month training course and being chosen (backed) based on their factors, is located in Dubai , and the only one as far as I know in the middle east and is trading futures not stocks not sure if the day or swing trade, in which I discovered my niche in trading is day trading. Any advice on how I can make it to prop trading?

Thank you for your valuable time in reading my long email, the world would have been a better place if two Bellas Exists

Waiting eagerly for your next trading classic: The Playbook



@mikebellafiore responds

1) Blue Prints. I am not familiar with your platform but there are two kinds of trades that it could be: dark pool trades and phone orders. It sounds like these are dark pool trades that are being reported to your platform. Make sure you are trading on a platform that has sufficient order flow and is directly allowing your orders to be routed to the exchanges. I am hearing some stories lately of new and impossibly cheap platforms that take your orders and send them through their own algo connecting to only some of ECNs and routes available. This cause slippage. What good is it to pay much less for a transaction if you are getting prices much worse than you should?  This is a case of saving 50 cents to pay fifty dollars more. That makes no sense for anyone aspiring to be a pro trader.

2) You can see some inflection points on charts.  Find areas where the volume increases. That may be an infection point.  Having said that there will be inflection points you miss if you do not develop the skill to Read the Tape. For example there are moments during a trading day that are more important than others that do not necessarily show increased volume. These are key moments for a stock in a trading day that you would see if you could Read the Tape. Also, there can be a stubborn buyer holding up a stock. You may see that buyer leave and the stock quickly fall. With just your charts you will miss the catalyst for the stock trading lower. Having said that there are many fine traders who just trade off of charts. We prefer to have more tools in our trading quiver so we also incorporate Reading the Tape.

3) It is too hard to start without expert guidance these days. Do not rip up 50k learning nothing, making errors a good mentor will keep your from, or trading stocks that can be avoided with a solid connection to a pro chat room. I write about this in my next book The PlayBook. Trading is the one sport where non pros get to play pro. But do not mistake your access to trade pro with an actual ability to responsibly trade pro.

There are chat services, mentoring services, and training programs available that will prevent you from ripping up way too much money while slowly building your trader skill.  Obviously I am biased but SMBU offers some excellent guidance. We worry about what we are offering. I know very little about what else is out there. We are just trying to be as good as we can be. But do your due diligence and find a way to start with pro traders you can trust.

Please keep in touch. Keep working on your trading game.


One Good Trade

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