How to Use Tape Reading in a Weak Market Environment
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- Опубликовано: 24 янв 2022
- SMB Workshop (free) bit.ly/3G0E7Zs
#smbcapital #stockmarket #daytrading
SHOW NOTES
Highlight of tape during a different market environment in which you are trading the tape ● Strong Market Environment vs Weak Market Environment
○ Strong Market Environment
■ Clear picture in market to force stock in one direction
■ Clear theme in market driving a specific sector
■ Sentiment is decided
■ Clear levels and setups identified
○ Weak Market Environment
■ No clear direction with large amount of volatility
■ Choppy setups making moves from midrange and spraying key levels and reversing
■ Slower starts to breakouts
● DWAC 1/11/22
○ What does the beginning of the move look like in a weaker market?
■ Saw 70k and 100k volume bars, 200k from previous day (Signs that
someone crucial is trying to get in)
■ Want to see tape speed up and spread become tighter
■ Breakout of $60 (Don’t want to see it hang around these prices with
exponential volume coming in)
■ Capture P&L in a weaker market
● NKLA 1/13/22
○ Short Squeeze Trade
■ Looking for reactions around $11.50-$12
■ Looking for 700k volume bar and saw a 1.5m volume bar (Double
opening volume)
■ Noticed on tape small ticks up were getting sent back down (Not a good sign)
■ In a stronger market there should be follow through after seeing
exponential volume bars
■ Tape starting to slow back down
● F 1/10/22
○ Playing off intraday level
■ Breakdown of $24 with tape acceleration (Looking for pop back in)
■ Looks for the retest of $24 with a failure and quick move down
■ In weaker environment you should see cleaner action to the downside (Sell first, think later)
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These tape reading videos never get old, even if you've been doing this for a while it never hurts to go over analyzing the tape.
awesome! we will have more coming
@@smbcapital 😎
1. No skipping action on the level 2
2. Breaks through level and comes back under it
3. When it breaks out, it moves slower with smaller spreads due to less volume
4. Less range on breakouts (so not much range expansion)
5. More opportunities in the hotter market. More range potential.
6. What you'll see on the tape when it breaks out in a slow market is that it will tick up a few cents and then they bring it back down after it breaks out, shows weakness not strength, usually if a stock breaks out on strong volume you should see levels holding and more buyers coming through etc, usually in a hot market. But less in a slow market. 17:00 timestamp
7. Spray (algo prints stop at a certain area, where they knew there's volume) where an algo breaks out purposefully to squeeze shorts to get their liquidity to sell, hence reversals are quick and selling is stronger.
8. In a hot market, with strong volume breakouts. there's usually follow through, but in a weaker market environment, they will use that stronger volume bar to reload shorts (supply distribution) and you'll see fast moves down, after what looks like a scariest moment for a short in contrast it ends up being probably a strong entry point.
9. In a weaker environment, the tape starts to slow down after strong volume, which won't happen in a hot market. That is a sign of weakness where volumes bard don't follow through much or as well.
10. Shorting generally work better in a weaker environment.
11. When shorting breakdowns what you want to see on the tape, is a pop back to resistance and then is met with quick selling and quickly flooding of the offers (many offers stepping in and holding), i do not want to see those offers get chewed through, it needs to stay strong you don't want to see a bunch of green prints come across and are getting rid of the offers and holding and supporting, that'll be bad for the short trade. 22:40 timestamp.
12. When the tape speeds up and then slows back down, this kind of information/nuances can allow you to classify that somebody is there selling, is it a forceful trend or a natural trend. The tape slows down, green prints coming in slowly and then its met with strong selling and quick selling, slams down on the bid.
13. 30:40 timestamp, Soak: You see green prints flashing but your not seeing the price move, that's classified as a soak, where alot of prints are going off at one price but your not seeing the price actually move, so with that strong volume would indicate that someone is reloading the offer.
14. With the weaker market environment, it's not a matter of the trades not working, their just going to work a different way, they need to be manage a different way and go for more singles, NOT homeruns.1. No skipping action the level 2.
My bad for the grammar issues, i was quickly typing it.
thx for the detailed breakdown!
This is the kind of tape reading video I've been waiting a long time for cheers🍻
The part he is explaining at the end I have in my trading plan as this (the first line I got from one of your videos )
On the tape:
Absorption > Fade of Pressure > reversal of Urgency
with
On the chart:
Fail > Retest > Fail (of prior bar or level)
I think of it this way because I mostly fade break outs or enter trend Ignition on flags in trend.
I like the part about weak or strong markets that is a part I have struggled with and have sort of solved lately but it was good to see someone experienced put it into words that I can ponder over.
glad it was helpful!
Like the way to linked the tape to the chart.
A much appreciated video lesson. The commentary was very helpful in providing contexts to what I'm seeing on the tape, making it more comprehensible in how to use the information when reviewing past trades and what to look for on future trades. Thanks for continuing to provide these much needed guidance and advice.
I feel like this has been my week so far. Perfect timing for this video. So many traps. So many false break ups and break downs. Thank you!
same, i was watching $APM's tape when it had the gap up day, was clear signs of algo manupulation.
you are welcome!
Excellent idea for classifying and legitimizing volume bars from days before moves. Very cool. Thank you thank you!!! Powerful ideas all at SMB
This is gold! Thanks for making more videos on how to read the tape.
welcome! :)
This content is gold
thx Ryan
man very helpful video, definitely needed a good insight on what healthy/sluggish action,tape looks like. these markets you take less range but you nail and bail. i look forward to seeing this video again but in a strong market in the future.
thx Tommy, hopefully we get some bullish markets soon so Garrett can get that video together
excellent analysis...thank you these tape reading vids help so much when managing risk and sizing up or down 100%
Thank you so much for this AWSOME video - your explaination is perfection for me, someone who wants to learn the tape. GO SMB TRADERS!!
thanks a lot really, exactly what I was needing
Great video SMB team!
thx Anthony!
Thanks
you got it!
This was fantastic! Thanks for sharing
thx for watching Jordan
You guys are awesome! Keep the good info coming !
thx Clay
Great video, thank you!
Glad it helped!
Fantastic vid, guys!
you are welcome!
@@smbcapital It certainly helped with my BA short today!
Great Content, Thank You!
Glad you enjoyed it!
Excellent play by play desp from a short perspective, haven't jumped into that arena yet, but soooon grasshopper...sooon
HOLY SHIT this video is amazing.
:)
great vid
Epic intro. Person who made the video did an amazing job
thx Tony! I'm always trying to keep things fresh here on the channel. - Kurt
Suuuch a great vid
Thanks.
Welcome!
Great video, thank you so much SMB and Garrett! Can you please respond with a quick definition of "spray" and "traps?" That would be very helpful, thank you.
liked this video, good patience shown on slow moving price action of Ford, especially when it started to move up and to stay with it for the short.....Q./ is the data feed from SMB proprietary platform available as API data to feed into a remote trader's charting software?
Nice work. Are you marking price on the tape to get back in as you trade around the core, or are you waiting for the 9/21 ema pop to do it?
Love the tape, sure beats the book trader in IBKR . Would love to know what the white prints are though.
Inside bid and ask
Thanks for the video, I asked and you delivered, how would you use the VWAP in this environment?
I guess watch the tape and see how it reacts around it
Green prints are on the bid/ red on the ask… what are the white prints?
Could you show when did you take losses on these trades. For example NKLA video, I would love to see when prop firm trader decided to take the loss. What is his criteria?
How much of a role does spread play in a stock like AAPL ?
Would say it is not something that would change with higher volume ?
Where can i Venmo for this education video, thank you
Ah yes, i remember the days when i participated in breakouts and placed a bid, only to see the bus leave without me, still hoping it would stop and pick me up. Even if that did happen, i would then realize that im on a bus, not a locomotive.
what is this cash tape or futures tape?
Time and sales really showed that heavy green wave during the second bar above 60 on DWAC. Nice
how to get such tape orders info at forex market , how to know how many buyers are bidding or sellers ask , how to get such things
We need this trader on again doing the same setup type video Bella 🙂
Definitely!! We can work with Garrett to get him back on. He wanted to do tape in a strong environment as the next video.
@@smbcapital appreciate it man 🙂 been through the course but it's always nice to learn from pros
Hey - what do you mean by "That volume bar could be them 'reloading the offer'? How can someone reload an offer? Please explain
I think it means ; even though there is a high of volume bar on the chart , he can see that the price is unable to accelerate upwards because the buying pressure is absorbed by sellers who keep refilling buyers' orders as they come through
I am in this trade at 59.00, stop loss 58.75 ( recent high), target 59.99 depending on SPY and in light of volume and trend above VWAP.1,000 share size. Was this a good scalp? BTW I started this comment at 10:56 . I would appreciate any and all comments.
Can you have videos on candlesticks too?
we could probably do something like that
Learning to watch level 2 next but I’m way better at boning the time and sales for some reasons with the color visuals, size for importance and watching the chart to confirm levels and holds.
I'm just a noob but when you say "hit the bid" or "Drop the bid" what do you mean by that? Can someone explain this to me so I can see it when I re-watch the video?
hit the bid would be sellers getting out at the bid meaning sellers want to get out quickly and will sell to whoever is bidding for the stock
is a well above averge internet connection crucial when reading the tape?
probably a good thing to have. You don't want lagging tape
When you see lots of red prints, that means bearish, correct? Thank you for your help.
Yes....
yes, this means offers orders are being fulfilled which mean the asset is being sold, through high volume market orders the orders slide, and price moves
Anyone know what application is being used in this video on the level II and Time and Sales?
This is our in-house platform
Wouldn't $58.50 be the level you want to start getting long at??
Looked a little over extended by the time it got to $60 for me anyways..
How do you filter your tape? Over 100 order 1k orders?
a lot of traders do filter out the smaller orders
@@smbcapital thanks!
does Garrett have a twitter? I'd like to subscribe :)
You guys only use ToS Platform correct? No Webull ?
traders use our in-house execution platform but some will use other charting platforms for certain indicators they use
Can't you just analyze the buy/sell volume profile to see the same thing?
seems like that would be a lagging indicator and not real time
@@smbcapital isn't that indicator data logged just as instantaneously as the tape?
19:29 my brain hurts a lil, what? huh?
Garrett is saying the higher buy volume allows anyone who is looking to add to shorts the opportunity to use the buy volume to short into.
@@smbcapital gotcha i meant 19:15, i think he mentioned weaker market environment twice
i disagree with the statement: (on weak markets) "no clear direction with lots of volatility from uncertainty that is keeping bigger player from a "risk on" mindset on their decisions" this is confusing since weak markets enables the RISK OFF mode. In my opinion this is exactly the oposite as what the SMB trader is trying to say.
well, he trades for smb..
Gman?