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  • Saturday, September 17, 2005

    Trades For Friday 9/16/05/ More Tape Reading

    I did have a couple of trades on Friday though I spent most of my time watching the tape and taking care of other things.My first trade was a short on NEW off the 11:20am 5 minute candle,I couldn't of timed that entry better.I entered short at 41.50 as they were taking out all the bids and I was able to hit an ARCA (thank you arca for being a buyer there).My first exit left little to be desired at 41.40,then I captured a little more at 41.27 to cover the entire position. My second trade in NEW was another perfect entry long at 41.25.I was watching every print as orders would try to come down only to get cleared away so I went long with the big buyer(or short covering,who really knows).Then I made a big mistake I put out an offer at 41.35 and all these orders came in behind me and went up and cleared out my offer for a .10 cent profit,only to watch it trade up even more to about 41.70.The point is my exit was way to early,I had a great entry,big buyers coming in and a stock ready to squeeze the heck out of the shorts on a volatile options expiration day.I really should have captured the bigger move on that one.The tape reading did pay off for the day though and I will be paying more attention to it in the coming weeks,and also to enhancing my exits.
    Unfortunately I cannot show the tape reading as it happens,but I can do my best to explain my thinking process on my trades throughout these next few weeks.My main thinking on these two trades was that the prints off the tape said it all when the bids were all getting hit and orders moved down it was time to go short and when that selling subsided and they held a certain level for a few bars it was time to go long as every order that tried to come down on the stock would just get printed.Of course you don't want to be the first one testing it out, you do want to watch a little first,but at the same time you don't want to wait so long that it becomes obvious to the entire group that may be watching the stock as you will miss a lot of the move.I think the idea is to wait long enough where you can see what is happening and strike at that moment right before everyone else catches on, and I believe this can be done consistently.I realize that was pretty basic thinking and I will try to get more in detail in the future, but for now that's all my tired brain can muster up.Good Trading!


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