July 5, 2011
Studying the Tape In Stock Trading
Buying and Selling Stocks and operating in the stock market, takes skill and proper timing. One of the most revealing clues and strategies I use, is following the tape. let me give some Example of the Time-Stamp (“The Tape”) That I follow and how it helps me determine when to buy or sell a stock. When I watch stock, I begin following the tape of those that I’m interested in. They show the last Execution price, date and time, and Number of shares. These orders are what make up the charts themselves. I rarely follow charts anymore, because the tape is much more revealing. For example, if an institutional buyer, hedge fund, or big investor is taking a big position in a stock (or selling a big position) they won’t do it all in one day. Usually they do it in the course of a couple of days or even weeks. This is because they don’t want to raise the price on themselves buying all at once or vice versa. I watch orders coming across the tape, and they give me a clearer picture (than a chart) about what’s happening with that company’s stock. The orders of 100, 200, 300’s are usually the public buying. When orders come across that are in lots of 5,000, 10,000, 20,000 and anything larger, that is a strong clue that a big investor is taking up (or selling off) a position. When I see this, I watch VERY carefully and make notes to myself on a notepad. Watching the tape helps me decide what to buy or sell and helps me with timing (when to get in and when to get out).
Posted by The Stock Markets Blog at 6:46 PM