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What is tape reading ??

  #21 (permalink)

Toronto canada
Posts: 9 since Jul 2015
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Price can move without orders being executed. And since order execution is the only thing the T&S shows, that's one way it can be deceiving. Another way it can be deceiving is when we focus more on order execution then price, for example, when huge buy orders are bashing the long side, and price doesn't move for awhile and a ton of volume is traded in a small range, we may think "Ah hah! Absorption! This is a logical time and place to short!" so we put our short position on, but those large buy orders do not let up and Price eventually breaks our level and stops us out.

Bottom line, it's not possible to experience any of these problems when focusing strictly on Price Action (the bars printing on our chart). These are just a few ways traders can be easily tricked by the T&S, and there's many more. These are the kinds of things I'm referring to when I say Price doesn't lie, and why I wouldn't personally think of Price Action and Time and Sales being the same.

I would disagree with your logic. Price action has to do with actual sales so the tape is price action. The bar is just this price action, time and sales, limited to a particular time frame. Price cannot move without orders being executed, it is the execution of an order which signals a price move. I look at it as price action is execution then there is movement or not which is the result of that price action. Price action or executed trades is the effort and movement is the result. It really does not matter how you define things as long as it makes sense to you. But for me time and sales has information in it that candles or the book do not. Although candles and time sales both show price action, in time and sales there is detail which is available no other place. But you still need candles to see the big picture and where and when to look for the detail. Time and sales is a precision instrument for order entry.

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