February 4, 2011
- in Uncategorized by schooloftrade
Pace of Tape Indicator measures the Speed of the Futures Markets we are day trading
– Pace of Tape Indicator
o Measures the speed of the orders coming into the market
o Does not count contracts
o It is not a vol indicator
o Treats a 10c trade the same as a 1c trade. It simply counts the trades coming into the market
o Very simple indicator
o Three colors: red/yellow/green
§ Red = slow
§ Yellow = medium
§ Green = Fast
o My focus is not so much the color, but the disposition (rising or falling)
§ Rising Speed = im looking for a trade
§ Rising Speed = hold my trade and look for more profit (let it run)
§ Falling Speed = im avoiding a trade
§ Falling speed = im taking profit or looking for a price reversal
o What does rising speed really mean?
o More people are participating at that price level
o Speed slows down = fewer traders = less interest in this lower price = price will rise again very soon.
o Speed rises = more traders = they agree with rising prices = prices will rise
– What do I mean by looking for the 2nd push, when we need more confirmation?
– Sometimes support and resistance is too difficult to break, and when we do finally break it, it often comes back to stop us out
– Im looking for 2 pushes through overhead resistance/support below to qualify entry on a specific higher risk trade.
– White on the time and sales, am I watching price or the volume? Both
o White background = trades at the HOD/LOD
o White text = trade between the bid and ask
o Watch the video on the blog about tape reading for more info on how we use them
– Swing trading with this method
– Same patterns, the same rules, and the same trade management
– The only difference is the timeframe we use.
– Rather than using 4/13/21, use the 21/34/55/89/Daily, Weekly, etc.
