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HOW TO READ THE STOCK TAPE The general opinion prevails with the public, especially among traders outside New York City , that the proper way to read the tape is to stand at the ticker and watch every quotation as it comes out. Nothing is more erroneous. Expert tape readers are very few and far between. It is a study of a lifetime. While the tape shows the trend of the market, there are so many minor changes and quick reversals that the average man can not tell whether the big trend has turned or whether it is only a minor change that will last a few hours, a few days, or a few weeks before the main trend is resumed again. TD Sequential countdown | Intraday Charts If a trader goes into a broker's office to watch the tape, he will find anywhere from two or three to a dozen traders standing around the ticker, all talking from time to time and expressing their opinions or what they hear on different stocks. He must also listen to the gossip that comes over the news ticker, floating rumors from the street, and information about buyers and sellers that comes from the floor. With all of these disturbances, there is not one man in a million that can concentrate enough to tell anything about what stocks are going to do. Besides, if he is able to pick stock a winner, and starts to buy or sell, he will be influenced by what someone says who is standing around the ticker and the result is that he will not act at the right time. Then it is impossible to beat the market by tape reading in a broker's office. No matter how strong a man's will power may be, he is influenced, consciously or unconsciously, by what he hears or sees, and his actions or executions are interfered with accordingly. This is the reason why a few big traders, like Liver-more, have a private office with a ticker, where they can be away from all outside influences and watch the tape, form their impressions, and act on them without being influenced by things they do not want to hear. But only traders who have a very large amount of money and can devote all of their time to the market and tape reading can afford to have an office and a ticker where they can study the tape alone without interference. The average man cannot afford this. Investor Lesson 16 - What Is The Price Of Becoming Rich Then it is necessary to know how to read the tape without seeing it, or without watching it all the time. Stock market movements of importance, i.e., the long swings, require weeks and sometimes months to get ready, or for accumulation and distribution to be completed. There is always plenty of time to buy or sell one or two days after a big move gets under way. Therefore it is not necessary to watch the tape every day, or every hour, in order to determine what stocks are going to do. It can be readjust as easy and better after the market closes. The tape is simply a record of prices, and if you have this record of high and low prices made during the day, you can form your judgments from it. stock trading advice ~ stock invest |
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