{"id":19717,"date":"2012-06-24T22:15:32","date_gmt":"2012-06-25T02:15:32","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=19717"},"modified":"2023-04-06T12:07:13","modified_gmt":"2023-04-06T16:07:13","slug":"tape-reading-was-money-for-this-play","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/tape-reading-was-money-for-this-play","title":{"rendered":"Tape Reading Was Money For This Play"},"content":{"rendered":"<p>On Thursday I was short MCP because it was trading below its two day support of 22.20. The market was having a trend down day and I was very\u00a0comfortable holding the position until the close. But then something changed on the tape. There was a 100 share bid on ARCA at 21.20 that was being hit and continued to refresh its order. Very quickly it absorbed about 20K shares. There were offers at 21.21 so I covered my short position. When I am in a position that is &#8220;working&#8221; for me and it is trending with the direction of the market I am very reluctant to close that position. But if something unusual happens on the tape I will take notice and reduce my position or in some cases even get flat. In this case I knew I could easily re-establish the position a few pennies lower (based on MCP&#8217;s liquidity) so it made sense to be flat until this buyer completed their order and left the bid.<\/p>\n<p>This tick chart helps you to see where the buyer was absorbing sell orders but true tape reading involves watching the Level II and time\/sales.<\/p>\n<p style=\"text-align: center;\"><a href=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/06\/mcp-21.20-buyer-1.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-19724\" title=\"mcp 21.20 buyer (1)\" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/06\/mcp-21.20-buyer-1.png\" alt=\"\" width=\"607\" height=\"433\" srcset=\"\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/06\/mcp-21.20-buyer-1.png 1011w, \/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/06\/mcp-21.20-buyer-1-300x214.png 300w\" sizes=\"auto, (max-width: 607px) 100vw, 607px\" \/><\/a><\/p>\n<p>In the meantime I was pretty pumped at the prospect of re-establishing my short position at a much higher price. Just because there was one buyer holding the bid it didn\u2019t negate the fact that MCP was below two day support or in a downtrend. It was simply that at 21.20 the risk\/reward was less favorable with a buyer holding the bid. So I was prepared to re-establish my position into a 30-40 cent up move. I set my alert for 21.50 and a few minutes later it popped up and I began to look for prices to get short. I shorted a bit as it spike through 21.50 and added some more after it topped out and started ticking lower again. When it traded back down to 21.20 I covered again. Rinse and repeat.<\/p>\n<p style=\"text-align: center;\"><a href=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/06\/mcp-5-managing-position.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-19730\" title=\"mcp 5 managing position\" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/06\/mcp-5-managing-position.png\" alt=\"\" width=\"600\" height=\"420\" srcset=\"\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/06\/mcp-5-managing-position.png 1000w, \/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/06\/mcp-5-managing-position-300x210.png 300w\" sizes=\"auto, (max-width: 600px) 100vw, 600px\" \/><\/a><\/p>\n<p><a href=\"http:\/\/twitter.com\/sspencer_smb\"><img decoding=\"async\" src=\"http:\/\/twitter-badges.s3.amazonaws.com\/follow_me-c.png\" alt=\"\" \/><\/a><\/p>\n<p>Steven Spencer is the co-founder of SMB Capital and SMB University and has traded professionally for 16 years. His email is sspencer@smbcap.com.<\/p>\n<p>No relevant positions<br \/>\n<a href=\"https:\/\/tradingworkshop.com\/\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-42831\" src=\"https:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2023\/03\/smbwebinarsignup.jpg\" alt=\"tradingworkshop\" width=\"600\" height=\"300\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>On Thursday I was short MCP because it was trading below its two day support of 22.20. The market was having a trend down day and I was very\u00a0comfortable holding the position until the close. But then something changed on the tape. There was a 100 share bid on ARCA at 21.20 that was being hit and continued to refresh &#8230; <a href=\"https:\/\/www.smbtraining.com\/blog\/tape-reading-was-money-for-this-play\" class=\"more-link\">Read More<\/a><\/p>\n","protected":false},"author":143,"featured_media":19730,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,8,1373],"tags":[4676,341,653,1349],"class_list":["post-19717","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general-comments-2","category-steven_spencer_steves_blogs","category-trading-lesson","tag-day-trading","tag-tape-reading","tag-trader-training","tag-trading-mentor"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Tape Reading Was Money For This Play | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/tape-reading-was-money-for-this-play\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Tape Reading Was Money For This Play | SMB Training\" \/>\n<meta property=\"og:description\" content=\"On Thursday I was short MCP because it was trading below its two day support of 22.20. The market was having a trend down day and I was very\u00a0comfortable holding the position until the close. But then something changed on the tape. There was a 100 share bid on ARCA at 21.20 that was being hit and continued to refresh ... Read More\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.smbtraining.com\/blog\/tape-reading-was-money-for-this-play\" \/>\n<meta property=\"og:site_name\" content=\"SMB Training Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/smbcap\/\" \/>\n<meta property=\"article:published_time\" content=\"2012-06-25T02:15:32+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-04-06T16:07:13+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/06\/mcp-5-managing-position.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1000\" \/>\n\t<meta property=\"og:image:height\" content=\"700\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"sspencer\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@smbcapital\" \/>\n<meta name=\"twitter:site\" 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