Tape Reading 101 Book PDF

JOSE
CASANOVA
Tape Reading 101

Introduction To Reading The Tape

www.josecasanova.com

Tape Reading 101 Josecasanova.com + Tim Ungacta
Introduction

What is tape reading?
Tape reading is the art of studying pure price action in real-‐time, based on the data fields in the
Level II box. Using the tape you are able to gauge player’s psychology and imbalances in supply
and demand to formulate trades. Tape reading is a leading indicator because it analyzes
current: bids, offers, and volume transacted at a given price (collectively known as “order flow”)
as they happen, unlike charts and studies, which are derivatives calculated from order flow data
and displayed after the fact. Bids, Offers, and actual transactions are what happen NOW.
Charts, MACD, RSI, are created later. They are the history of price action.
Because you see the characteristics of buying and selling as it happens, developing this skill will
improve your entries and exits, minimizing your risk and maximizing your reward by allowing
you to catch larger moves using smaller stops. Tape reading is a tool that will put you ahead of
many other traders who think technical analysis is the only skill they should know, giving you
access to more plays that charts simply don’t show you. With tape reading you will be able to
determine where the stock is going to move 70% of the time.
Why is tape reading important?
Because it gives you an edge, an additional tool to improve your entries, exits, and trade
management. Back before charts were actively used, most intraday traders would trade by
using their skills of reading the tape, and reading the tape only. There were no charts or
indicators for them to use. The last thing tape reading gives you an edge to combat the
algorithms and HFTs prevalent in today's trading environment.
What can you see on the tape that you can’t see on the charts?
Bar/Candlestick charts depict a range of price action defined by the open price, range, and close
price, over a specific interval of time, or in the case of tick charts the price action over a
specified number of transactions. What the individual bars don't tell you is how bids and offers
acted at a given price, or the specific volume transacted at a price, within the time-‐frame (or
transaction count in the case of tick charts) of the individual bar. By reading the tape you can
see the active buyers and sellers and see what levels they are participating at by watching the
supply and demand they seek. You can follow a certain buyer and recognize the pattern in
which he is accumulating the stock. The same goes for sellers. With tape reading you can feel
how the market is taking your orders and have a sense as to whether a certain stock is weak or
strong. For example: if a stock looks weak on the chart but it is very difficult for your bid to get
BIDHITTER HOLDINGS, LLC

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hit then that is a clue that there is not that much selling happening, so the stock might not be
that weak after all… but more on this later. Finally, charts are showing you past data... granted
charts are valuable, but when you mix tape reading and technical analysis you will have an edge
many intraday traders do not possess.
How tape reading is an art and not a science
Tape reading is not a science. It is not like learning how to do an experiment, and then being
able to repeat the experiment with success ad infinitum. Because trading is a probability driven
activity, and different stocks have different “personalities,” tape reading is something you learn
over long periods of observation and personal experience. The more you watch the tape, the
more you will be able to identify certain patterns. The basics of tape reading are very simple,
but after you understand the foundation of tape reading you will only get better over time.
How does tape reading affect efficiency with entries and exits?
We defined the difference between the tape and charts in an earlier question. The granularity
of real-‐time data on the tape, because it allows you to analyze “intra” bar data. It also allows
you to choose entries and exits, with finer granularity. You don't have to wait until the next bar
on the chart to make a decision, which could both reduce your profit potential and increase
your stop risk. Here is an example of using the tape to get long at a great entry:

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In this chart, you can see that GMCR gapped up big on news over the weekend. By using just
the charts, your entry would have been long at $34.15 when it broke the high or even $33.96
when it broke the mini range. By using the tape to find an entry you would have noticed there
was a held bid and accumulation around the $33.50 level. You could have gone long at $33.51
with a stop at $33.44 (or when the bid dropped and offer held below 50c). That would have
been a great entry and tighter risk using the tape instead of getting long at $34.15 or $33.96
risking about 50 cents. Also, your risk reward ratio is heavily skewed in your favor using the
tape.
How does tape reading lower risk?
A good example is the one above on GMCR. By using the tape you can spot accumulation (held
bids) or distribution (held offers) and go long (just above a held bid) or go short (just under a
held offer), using a break of the held level as your stop. If you are looking to buy in an uptrend,
or add to your position, but do not want to chase you can look for a held bid to get in, and the
subsequent failure of the held bid to get out, keeping you from taking on unnecessary risk.
Below is an example of lowering your risk while finding great entries and exits:

ASTM was in play after a trading halt, and subsequent re-‐opening, moving down sharply, we
don’t usually play stocks that are/were halted but this presented a great risk reward situation
to enter a trade. Although ASTM is a cheap stock (we don’t usually trade sub $10 stocks either)
there was a great opportunity to trade it. ASTM opened up after the halt and dropped sharply.
We looked for a great entry to short while keeping our risk low. ASTM bounced and started to
hold an offer around $3.60. Also, when the offer was being held another big offer showed up.
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You can't see that on the chart, but you can, if you know what you are looking for, see it on the
tape. We got short and waited for the offer to get filled to get out. Our risk was about 3c if we
saw the order decrement quickly we would have hit it also and not waited for it to get filled.
Some of the order got filled but not quickly then the stock dropped. The stock kept dropping
and the offer kept stepping lower. Finally the remainder of the order was filled around $3.15
where we exited. Not a bad trade risking a few pennies to make about 45 cents.
How does skill at tape reading improve understanding chart patterns?
Tape reading will improve your understanding chart patterns because you will be able to see
the supply and demand dynamic in real time. A prime example of this is GMCR from above.
GMCR showed some technical support and you saw there was accumulation on the tape, a
great set up to get long while keeping your risk tight. Also, with tape reading if a stock reaches a
significant long term technical level you can spot on the tape how it’s reacting to it and play it
from there, all by seeing what the buyers and sellers are doing real time.
How do you improve tape reading skills?
Improving your tape reading skills will take time. You will only get better by watching the tape.
You will understand and see more things on the tape 3 months from now than you will see
today. To help accelerate the learning curve you can watch video recording of your trades or
watch video tape from the Bidhitter.com library of trading tapes. It is easier to spot something
on the tape when you are not in a trade and the market is closed. As I said before, the best
thing to do to speed up the improvement process is to screen record your trades, and then
review them after the close when you are not under the stress of the trading market, and to tap
into the Bidhitter.com video library of recordings.
Trading the open with only reading the tape
Trading the open with just charts is difficult because actionable levels for the day have yet to be
defined. Granted, you have previous technical levels from other days and time-‐frames but your
edge on the open will most likely be on the tape. Intraday traders make most of their money on
the open and the close because those are the times when the market and individual stocks
move the most and have the most volume during the day.
By knowing the Market Maker box you can find key levels, almost predicting where the chart
will go, and find good entries for longer-‐term trades.
With the Market Maker box you will be able to find key levels where significant volume has
been done and trade off those levels while keep your risk tight. If a certain level has done a
significant amount of volume and doesn’t break it, then you have spotted a great entry to trade

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with a core while scalping around it to lower your risk and make some quick chops when you
spot them on the tape.

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Level I & II Box

Level I & II Box
When talking about “reading the tape” we are talking about the Level I and II box. The Level II
box shows us who is willing to bid and who is willing to offer with how much and at what price.
Level I
Above is a screen shot of a Level I and II box also known as the market maker box. Highlighted
in white is the ticker of the stock you are looking at and next to it (if you are in a position) is the
number of shares you have and your average price. Below that, highlighted in grey, is the Level I
box. This shows the, from top row going from left to right, last price the stock traded at (LAST),
the price change since the day before (CHG), the amount of size the last price was traded at
(SIZE). On the second row shows the highest the stock has traded for that day, or high of the
day (HI), the price where the stock opened (OPEN), and the amount of volume the stock has

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traded so far on the day (VOL). In the row below that shows the lowest the stock has traded for
that day or low of the day (LO), the price the stock previous closed (CLOSE), the amount of
shares your tier size is set to (TIER). Finally on the last row it shows the percentage change since
the day before (CHG%) and the last portion of the row shows the spread of the stock, or the
difference between the bid and the ask/offer (SPR).
Level II
Below the Level I box is the level II. On the left side of the Level II box are the bids and on the
right the offers. The bids are always on the left and the offers are always on right. The bids
shows the best price people are willing to buy at and the offers are the best price people are
willing to sell at. Highlighted in light green are the bids. The bids are always stacked from the
best price people are willing to buy at the top, and the lower prices people are willing to buy
are below them. Below the best price ($35.88) are called the underlying bids. On both the bids
and the offers, they are shown from left to right as SIZE, ECN, and PRICE. For example, on the
bids, it shows 7 arca 35.88. This means that there are 700 shares on ARCA at $35.88. Below that
are the different ECNs and the different size on them at what price. The same goes for the
offers. The best offer shows 11 arca 35.91. This means that there are 1,000 shares on ARCA at
$35.91. The underlying bids are from 1 edgx 35.86 and below. The underlying offers are from 8
bats 35.95 and above. This means once all of the shares at $35.88 are filled the next best price
people are willing to buy at is 35.86. The same goes with the offers that once the offers at
$35.91 filled; the next best price people are willing to sell at is $35.95. You should always keep
an eye on the underlying offers and bids when looking to get in a position. This helps you know
your REAL RISK. How many bids underlie your long entry determine how easy it will be for you
to exit should you be stopped out. The greater the number of underlying bids, the easier it will
be to exit your position. The same goes for the depth of offers should you be short. Always
know your real risk and possible/realistic exits before you get into a position. Also, by using the
information of the underlying bids you can tell how strong or weak a stock is. If there are more
underlying bids for a good amount of size then this might indicate that the stock will trade
higher from its price. Finally, the underlying bids and offers are all relative to the stock. This
means that they have to be significantly different from the other bids and offers to stand out.
Time and Sales
On the right side of the Level II box you will see the prints. These are the actual transactions.
The prints are highlighted in a purple box on the image above. The prints tell the price and the
size of each transaction. They are in the colors of green, white and red. A print in red means
the stock traded on the bid, a print in green shows that the stock traded on the offer, and a
print in white indicates a trade between the bid and the offer (inside market). White prints are
common for stocks that have larger spreads, people “chiseling” (or putting in an order half a

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penny higher than bid or lower than offer), or if the stock has a tight spread it can be an
algorithm or hidden buyer/seller. A common mistake for most new traders is to think that if the
stock is printing red then it’s being sold and if it’s being printed in green then it must buying.
Remember, for every buyer there is a seller and vice versa. In the image above GMCR the last
print was $35.91 5 on the offer. This means that someone paid the offer for 500 shares on
GMCR. Finally, on the example below you will see two prints that are highlighted in green. This
means those prints were paid through the offer. This goes the same for the bid if it is
highlighted in red. You shouldn’t pay much attention to the highlight prints for now. The
through prints can just be someone using a market order. The only time to focus on the
through (highlighted) prints is when a stock is moving very quickly in either direction and the
buyers/sellers just want to get rid/get more of their stock.


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With the example above fill out this quiz below:
1. What is the ticker is on the box?
2. What was the last price it traded at?
3. What is the net change of the stock? (both dollar and percentage wise)
4. What was the open? The close? High? Low? Spread?
5. What is the spread of the stock?
6. Was the stock last traded on the bid or the offer?
7. How much volume (on the prints) was done at 161.22?
8. What is the next underlying bid if 161.22 get taken out? Next underlying offer if 161.23
gets taken out?
9. What ECNs are on the bid and offer and for how much size?
10. How much volume has the stock done so far?
11. What price was the stock last print in the inside market? (between the bid and the offer)

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Answers for prints
1. What is the ticker is on the box?
a. Gs, Goldman sachs
2. What was the last price it traded at?
a. 161.23
3. What is the net change of the stock? (both dollar and percentage wise)
a. $-‐5.44, -‐3.26%
4. What was the open? The close? High? Low? Spread?
a. 164.30 open, 166.67 close, 164.38 high, 158.45 low, 1 penny spread
5. What is the spread of the stock?
a. 1 penny
6. Was the stock last traded on the bid or the offer?
a. offer
7. How much volume (on the prints) was done at 161.22?
a. 2,300 shares
8. What is the next underlying bid if 161.22 get taken out? Next underlying offer if 161.23
gets taken out?
a. 161.21 bid, 161.25 offer
9. What ECNs are on the bid and offer and for how much size?
a. 500 arca 161.22 and 200 nasdaq 161.22 bid, 200 arca 161.23 and 200 nyse
10. How much volume has the stock done so far?
a. 10.7 million shares
11. What price was the stock last print in the inside market? (between the bid and the offer)
a. 161.22

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Prints
Prints

What are prints, where are they located on the box, and how are they apart of “the tape”?
Prints are the price at which the stock is currently trading, simple enough right? They show you
if the stock is currently being traded on the bid or on the offer (ask).They are located on the
right side of the box as shown in the image above. The prints are what the old school traders
(back in the early 1900s) used to determine the strength and weakness of a stock. They are the
electronic “tape.” Obviously we have better technology now, but the same theory applies.
With the prints you will be able to see the strength or weakness of the stock and at what prices

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there are buyers/sellers. Combining the prints, level II, charts, and the futures (or sector etfs)
can show price inefficiencies to exploit.
What is a red print? A green print? A white print?
If the print is red then it means the stock is trading at the bid. If the print is green then the stock
is trading on the offer. Finally, if the print is white, then the stock transacts between the bid and
the offer. White prints on tight spread stocks are usually for hidden buyers/sellers and/or
algorithms, in the image above you see the last print (its shows the most recent transaction at
the top) was Z 62.83 1 in white. Therefore it traded between the bid and the offer (it was
probably 62.835) for 100 shares on the ARCA or BATS ecn. Below that was Z 62.83 1. This means
that the print before the last one was traded on the bid for 100 shares at 62.83 on arca or bats
(Z exchange on prints can be arca or bats). Decoding the ECN from the prints is not that important,
just keep track of the letters to keep it simple.
Through Prints
Usually market orders, through prints are the highlighted prints that transact above or below
the best bid/offer. They are relatively unimportant.
Prints move to fast and I can’t read them, what do I do?
This is OK. Sometimes prints will be moving too quickly to keep track and cleanly read the tape.
Over time you will become better and faster at reading the prints. Also, stocks with high volume
usually print really fast and are difficult to read. The perfect example for this is the SPY ETF,
which tracks the S&P and usually trades at least 150 million shares per day. Your best bet is not
to try to read the tape on ETFs but stick to readable, in play stocks that trade anywhere from 1
million shares to 20 million shares per day.
Using prints as an indicator
Prints show you at what price and at what size the stock transacts. Volume and price patterns
are created through the prints, defining important levels from which to structure your trades.
Printing repeating on the bid, printing repeating on the offer
If you are watching the prints and see that the stock keeps printing on the bid at lower prices
than this is a sign of weakness. Also, if you are watching the prints and see that the stock keeps
printing on the offer at higher prices then this is a sign of strength. If you see the stock
constantly printing on the offer then that means someone really wants the stock, they’re
aggressive enough to pay the offer and spread to get the stock because they want right now.

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They’re not willing to bid for the stock hoping and waiting to get hit on the bid. This isn’t always
the case but sometimes it is, with experience you will differentiate when it is or isn’t.
Big prints
When a stock prints 100 shares and 200 shares and 100 shares at a certain price (lets say $50)
then you might see a print for 100,000 shares at the same price ($50). This is considered a big
print. Big prints are usually institutions and institutions most of the time dictate the order flow
since they have more money than you. This is a clue to what they are doing; you should pay
attention and remember it. That print of 100,000 shares at $50 is now an important price. If the
stock keeps trading at $50 and the bids hold then this is a sign of strength, if the bids drop then
the stock is probably going to trade lower. You should watch the prints and see how they react
to that price and size. Big prints are all relative to the amount of volume traded and how many
shares each print has been printing. A big print is usually a print that sticks out compared to the
other 100 shares prints and the current volume traded.

Before: Big print in LLY at $39.46

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After: LLY traded higher

Big prints in P near the low

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P trades higher
Big print then big print higher
A stock is trading at $50 and the stock has a big print of 100,000 shares then trades higher and
you see a big print for 125,000 at $50.25 this indicates it will likely trade higher. The big print
and big print higher indicate institutional buying. This is a bullish indicator. If you see a big
print, then a big print higher on a down trending stock then this might present a great
opportunity to get long the stock. It doesn’t mean trying to catch the bottom hoping for a big
print and big print higher or mean that you should get long in a down trend. Getting long a
down trending stock is not always the best play, but if there is a big print then big print higher,
you see bids holding and it breaks it down trend line then this should be an excellent to get
long. The opposite is also true, if you see a big print then a big print lower; it signals that the
stock is weak and probably going to trade lower.
Speed
Each stock trades with a certain rhythm and pattern, your job as a trader is to recognize it. You
should recognize how often and repeatedly the stock prints and at what speed. When a stock is
quickly printing on the offer and then prints faster, that is bullish. The buyers are getting more
aggressive and are paying for the stock. It may be about to break out if it’s at a level of
resistance or that they have a buy order than is about to get filled. Another thing you should

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notice is that if an offer steps down and gets taken immediately, this might mean that there is
demand at that certain price. If you see that an offer steps down, lifts and see it quickly printing
on the offer then the stock is strong and the offer is being taken immediately. The buyer is
willing to buy any stock on the offer which means they aggressively want it. If a stock slows its
printing then it may not be in play at the moment, and you should move on.
Volume
Watching, noticing, and remembering how much volume is done at certain prices is important
when reading the prints. When an unusual amount of volume is done at a certain price then
this level becomes important around which you can structure trades. A rule of thumb is the
more volume that is done at a certain price the bigger the move that is expected once price
moves away from that level. Remember, the volume is all relative to how much the stock has
traded, how much you expected to trade at that level via level II, and how much volume is done
around the level. Also remember that just because a stock does extensive volume at a certain
price and trades up a few pennies doesn’t mean you should be long. Combine the level with the
charts and what the box/tape has been telling you. Here is an example: if a stock trades
300,000 shares between a 10 cent range then the stock breaks the range, you might expect a
move of about 25 cents, but if the stock trades about 3,000,000 shares between that 10 cent
range then you should expect at least a 1 point move when the range breaks (this doesn’t mean
you should be stubborn and wait for a point if the stock doesn’t do it). The amount of volume
had done at certain levels give you an idea of how much a stock might move away from the
level.
Hidden buyers/sellers
If the bid is at $50.10 and the offer is at $50.20 but you notice prints $50.12 (white prints to be
exact since they’re between the bid and the offer) continuously then this is an example of a
hidden buyer. You should pay attention to this and gather information about it. If you notice
that the offers step down to $50.18 and they get taken immediately then this means the buyer
is willing to buy at whatever price you are selling at and it is a bullish signal. This will present a
great risk/reward setup. The opposite is the same for sellers.

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Nflx had a hidden buyer in the $66.50 area

Hidden buyer accumulating and then it trades higher

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Pot had a hidden buyer in the $40 area

Pot trades higher

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Rig had a hidden buyer in the $42 area

RIG trades higher

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Big buyer/seller with a refreshing ECN
If the bid is at $50 and the offer is $50.10 and you see a bunch of prints at $50 and the buyer
doesn’t drop then this is an example of a big buyer. We watch the prints and notice how much
he is buying, if he buys a ton and doesn’t drop then this is a good entry to get long, with you
exit if he drops. This will present great risk/reward setups. If you see BATS on the bid at $30 and
they’re showing you 100 shares (or anything less than 1000) and you notice a bunch of prints at
30 then this is an example of a refreshing ECN. The buyer is hiding his size and is trying to
accumulate a sizable amount of stock. You want to get long here at the price (getting long on
the bid on a different ECN) or a penny above it, while your risk is if he drops the bid. You should
follow the refreshing ECN. Also, sometimes there will be a big buyer at a certain price, for
example $50, just accumulating on the bid and refreshing. Sometimes they will drop the bid 5
cents and raise the bid back to $50. You should always hit out of the stock because it hit your
exit but you can always get back in while putting your risk at the low of that recent drop.
Big buyer/seller drops or lifts
When we notice that there is a big buyer or seller and we are in the opposite side of the trade
then we exit the position assuming that the stock will go against us. For example: if you are long
AMZN and notice a big seller then you exit the position thinking it’s going to go down. If the
seller lifts then it is a good time to get long since they are done selling, the same goes if a big
buyer drops. Remember, this isn’t only one reason to get in the trade, you have to have all the
other indicators pointing in your favor (technical’s and tape).

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Buyer was holding the RIG at $42.70

Buyer drops and RIG trades lower
Probabilities
Trading is a game of probabilities. On any given trade the indicators can be wrong. Therefore, to
increase the probability of success on any given trade, the more indicators in your favor, the
greater the likelihood of success. You may still enter a trade if all indicators are not in your
favor, but you must then reduce your position size to counter the increased risk.
Using prints and level II together
By using the level II to see the characteristics of stock at the bid and offer, while seeing how
much is printed at a given price, you can gauge supply and demand, as well as identify hidden
buyers and sellers. Using them together you can identify high probability entries that you might
not be able to see on the charts. By using the level II and prints you will see if there is a buy
order or sell order (via the ECN, trading pattern and prints), follow those orders, see when
they are finished and make a chop by doing so. That is something you won’t be able to see on
the charts. Gauging volume and supply and demand allows to size properly based on the
underlying bids/offers to reduce slippage. Finally, by using tape reading to your advantage you
will be able to see the algorithms/HFTs and combat against them.

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What different prints means and what are some bullish and bearish prints
The table below provides examples of print characteristics to help define the strength of a
stock.
(Reminder: 1 ARCA = 100 shares on ARCA, 10 ARCA = 1k shares on ARCA, 100 ARCA = 10k on
ARCA. Whatever the number is multiply it by 100 and that is how many shares. Single digits =
hundred(s) which can be 100-‐900. Double digits = thousand(s) which can be 1000-‐9900. Triple
digits = ten thousand(s) which can be 10,000-‐99,900 and so on)
The bid shows 10 ARCA and prints 60k on the bid at the same price and holds Bullish
The offer shows 10 ARCA and prints 60k on the offer at the same price and holds Bearish
The bid shows 70 ARCA, prints 9k on the bid, and refreshes Bullish
The offer shows 70 ARCA, prints 9k on the offer, and refreshes Bearish
The bid shows 70 ARCA, prints 7k on the bid, and then the bid steps higher Bullish
The offer shows 70 ARCA, prints 7k on the offer, and then the offer steps lower Bearish
The offer shows 70 ARCA, prints 7k on the offer, and then the bid steps higher Bullish
The bid shows 70 ARCA, prints 7k on the bid, and then the offer steps lower Bearish
The bid shows 5 ARCA, prints 7k on the bid, drops, then rebids at the same price Bullish
The offer shows 5 ARCA, prints 7k on the offer, lifts, then steps down to the same Bearish
price
The bid shows 60 ARCA, prints 6k on the bid, drops, and the offer steps down Bearish
lower than the previous bid
The bids get hit quickly and drop, moving the price lower Bearish
The offers get taken quickly and lift moving the price higher Bullish
The stock is quickly taking the offers and taking the offers and taking offers higher Bullish
and then will not take the next offer and slows overall but
bearish for
that price
The bid gets hit and holds and steps up and gets hit and holds and steps up higher Bullish
and gets hit and holds higher and steps up higher and then gets hit and drops overall but
bearish for
that price
Big print and the next prints are higher Bullish
Big print and the next prints are lower Bearish
Big prints and big prints higher Bullish
Big prints and big prints lower Bearish
The bids are tested and holds Bullish
The offer is tested and holds Bearish


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Bidding, Offering, Overlapping, and Sweeping

Bidding, Offering (limit order), Overlapping, and Sweeping

The green box on the top left of the left image shows BID 1,000 DANG, which means you are
bidding for 1,000 shares for DANG. The image on the right shows the red box on the top left,
displaying OFFER 1,000 DANG, which means you are offering 1,000 shares of DANG.
What is a bid? What is an offer?
A bid is a limit order representing the highest price at which people are willing to buy the stock.
An offer is a limit order representing the lowest price at which people are willing to sell the
stock. Proficiency employing limit orders.
Is a skill that will save you money over your trading career? By bidding and offering you provide
liquidity in a stock, lowering your commission through the ecn rebate mechanism. Employing
limit orders helps develop patience and discipline, allowing you to get the best possible entry
price. You should always bid or offer on wider spread stocks, you don’t necessarily have to
place your bid at the bidding price but instead between the market. The same goes with
offering. You should bid or offer when the stock isn’t going to move very quickly.

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What is sweeping?
Sweeping is when you want to get in or out of a stock immediately. The difference between
sweeping and a market order is that it will limit the price where you will get filled up to a
certain amount. Instead of sending out an order to fill all of your shares at the market price it
will limit you to an adjustable, pre-‐set amount (eg: $.10 above/below the offer/bid). For
example: if you had 1,000 shares of ABC stock long and wanted to get rid of it (hit the bids)
using a market order then you might get filled anywhere from .1 to 15 cents away from the
market price depending liquidity (amount and price of underlying bids/offers). The more
illiquid it is, the more you will move the price. If you use the sweep key then it will only fill you
up to 10 cents on the amount of stock that is available. This might not fill your full order within
10 cents (sweeping), but it’s better to get some of your order filled up to 10 cents and have
more control over your exit than getting filled farther away than you expected. This is useful
because some algorithms are able to identify market orders and pull their orders just to fill you
lower. Perhaps you want to get long a stock when you see a huge offer decrementing expecting
a break out. If you sweep at the offer but it breaks out and it hasn’t filled your order then you
will get filled all the way up to 10 cents from the offer. This is useful because some stocks tend
to break out 20 cents immediately and if your order wasn’t filled using market before then it
would have filled all the way till it did (market). That is an example of when sweeping is better
than a market order just because you have more control over the price(s) you are getting
compared to market orders. This gives you better control of your risk since you have more control of
your entries. There is no pop up for the sweep key, unlike when you bid or offer. You should
always sweep if you want a stock RIGHT NOW, especially momentum plays.
When to bid/offer vs. sweeping?
Previously we explained what it is to bid/offer and to sweep. Now when do you use them? You
should always try to bid for a stock or offer it out, but sometimes when a stock is moving fast
you will have to sweep to fill your order, which is the same as just paying the offer if your bid
isn’t getting hit or hitting the bids if your offer isn’t getting filled. The times to sweep are when
you want to get the stock right at that moment. Some examples are when the stock is moving
very quickly, when it’s breaking out, or when it’s breaking down. You should always bid or offer
for stock when there is a large spread. Final reminder, you should always try to bid or offer for
stock and the only times not to are when you need to get the stock right at the moment, its
moving very quickly and your bid/offer isn’t getting filled, or when you have a bid/offer and it’s
just not filling your or people are jumping in front of you. Using your judgment you’ll know
when to bid/offer or sweep.

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How does bidding and offering lower your cost? How does sweeping raise your cost?
Bidding and offering lowers your cost in two ways. First, when you provide liquidity to the
market you receive a rebate per share. This means that you will be sitting on the offer or bid
waiting to get filled and in turn providing the market with liquidity. Another way it lowers your
cost is you get better prices because you are setting the price where you want to get the stock.
Instead of sweeping and might get slippage of a few cents you will be able to get the price you
want. Over time these pennies will add up in your trading career. The way sweeping raises your
costs are that you are taking liquidity from the market so you will be charged a little extra in
commissions per share. Another way you will raise your cost sweeping is by not getting the best
prices that you want when you sweep. Granted, most of the time you will get whatever the
offer is, but sometimes there will be slippage.
Buying on the bid or selling on the offer on different ECNS and using hidden orders
Sometimes when you are trying to get filled on a certain ECN you might not get filled. The best
way to go about this is to use a different ECN, sweep or hide your order. A hidden order is
exactly what it seems, an order that is hidden. Hiding your orders is beneficial when you do not
want the algorithms or other traders to see your order. When there is a held bid or offer and
you are not able to get filled at the price on the same ECN that is refreshing then you should
probably sweep, step in front of that order, or use a different ECN on that same price. The way
orders are filled are FIFO, which means first in first out so if there is a huge order at a certain
price then you will have to step in front of it or get a different ECN in order to get filled.
What is overlapping?
Overlapping is when you put your offer below the bid by a certain amount to hit the bids/offers
down/up to a certain price to fill your order. You will also overlap when you have to flip a
position. It is pretty much the same as the sweep key but with more control. You would over
lap to make sure you get filled and take all the visible orders stock available up to a certain price
that you set. Final reminder, overlapping will fill you up to a certain price that you set and try to
fill you up to that price with all the stock that is available. Below is an example of overlapping
bids and overlapping offers. The image on the left shows a buy of 1,000 shares up to $33.55.
Granted, the order should get filled up to 54 cents just by looking at the level II if you were to
overlap right at that moment. The image on the right shows an order to hit the bids for 1,000
shares all the way down to $37.40, but just by looking at the level II your order should get filled
by $37.48.

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Things to consider when sweeping or bidding/offering
You should always consider the pros and the cons when you are deciding whether to bid/offer
or sweep. Listed below are some questions you should ask yourself when doing so:
§ What is your risk if you do not take the offer? Hit the bids?
§ How easy is the stock to buy on the bid? Sell on the offer?
§ What effect will placing a bid have on the stock? Placing an offer?
§ What is your trading style?
Listed below are some examples of what you should do in certain scenarios:
Note: The examples go both ways and you should have multiple indicators in your favor when
trading certain scenarios.
§ If the stock has fallen quickly and there are no bids
o Throw in your own bid if the down move slows and keep a tight stop
§ If the stock has fallen quickly and there are bids
o Get in front of the bid with your own bid
§ If the stock has a down move and there is a refreshing ECN

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o Get in front of the ECN with your own bid or match the bid with a different ECN
§ If the stock is in a range and breaks out
o Pay the offer when the stock breaks out
§ You are long and the stock climbs quickly
o Try and sell on the offer, but if you can’t get filled then hit the bids
§ The stock climbs and then stops because of a refreshing ECN
o Try and sell just below or at the refreshing ECN on a different ECN
Generating Information by your trades and orders
Each time we place an order we generate information because you are also a part of the stock
and its order flow when you execute a trade. Whenever you put on a trade, there is someone
that sold or bought from you. Each time you place a trade you are gaining information from the
stock. How? Ask these questions:
How quickly do your orders get filled? At what price? Are even getting filled at all at that price?
You must gather all of this information when analyzing a stock.
Sometimes you will notice that you put a bid in and it will get filled quickly. This means that
someone quickly sold to you. Sometimes you will post an offer and you won’t get filled for a
while, or at all. Therefore, no one is willing to buy at that price the speed of which you get your
orders filled shows how urgently people want to get in or out of a stock.
Sometimes you will offer at the offer and the offer will step down. Then you notice if you cancel
the order that the offer goes back to that price. Sometimes you will drop the offer, and again
the stock will move the offer down and then you just hit the bids to get filled. Sometimes you
will see the bid and offer move from where you put in your order. Take note of these changes
in the stock and remember them.
Sometimes you will be long in a momentum move upward. You can generate information by
trying to sell a very small piece of your position on the offer, if you get filled quickly then the
stock might still have more room upward. If you do not, then the stock might be about to slow
down.
Another example: you short in front of a seller. Your plan is to exit the stock if the seller lifts and
you expect about 5 cents of slippage after seeing the underlying offers. Let’s say you are short
in front of the seller, they lift, and you pay out of your stock. You notice that your fill wasn’t 5

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cents away from where the seller was selling, the price you expected to get, but at the same
price the seller was. This is information that you have just generated to show you that the seller
might not be done.
This is all information that you are generating from your trades that you should note. This will
all give you more information about the stock than just the prints and level II. Remember to ask
yourself how easy was it to get filled? How much slippage, if at all, did your exit give you? How
did the bids and offers react to you putting in a bid or offer?

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Big Bids and Big Offers

Big Bids
What are Big Bids and why are they important?
A big bid is exactly what it name says. It is a bid that is unusually larger than the normal bids
that are routinely shown. Represent institutional size. These are important to watch and to
keep note of because these are institutional orders and you want to follow what institutions are
doing. Remember, institutions are the big money and are the guys that move stock prices.
When a stock is showing 100 shares on the bid and 300 shares on the underlying bid below that
then this is usually normal, small sized bids. Let’s say that you see a bid below that flash for
200,000 shares then this is a bid to watch. So what does it mean when there are 200,000 shares
on the bid and 100 on the offer? It means that the stock will probably trade higher because
there is greater demand for stock at a given level then there is supply. Remember to keep note
of these bids and to remember the levels at which they occurred.
If this big bid gets filled and holds then that means the stock will probably trade higher. If it
drops, then it is probably weak. You should also notice what happens to the stock when the big
bid is placed.
What do you do when there is a big bid?
When you see a big bid hold then you usually want to step in front of that bid to go long, exiting
if it starts to decrement (or decrement quickly) or drops. Also, keep in mind your real risk and
what the underlying bids are doing. When a big bid drops then there will likely be more slippage
than if a regular bid drops. When there is more size on the bids than there are offers then it
usually indicates that the stock should trade higher.
What does a Big bid look like on the Level II?
Big bids are very easy and simple to spot on the Level II. They stick out like a sore thumb. If you
see a few bids for 100 shares then one bid for 100,000 then that is the big bid. It would look like
this:
1 NYSE 30.20
2 arca 30.19
1000 nsdq 30.18

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2 edgx 30.16
In the example above, the big bid is at $30.18 showing 100,000 shares in size while the other
bids are showing 100 and 200 shares. Like I previously stated, this is easy to spot and should be
noted when spotted.

Tan had a big bid at 28.50 on NYSE

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BBY had a big bid at 25.35

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GMCR had a big bid at 51

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CHK had a big bid at 28.95
Flash orders
Flash orders are when big bids are flashed at a price and disappear. This usually happens when
the order is hidden but sometimes shows or if they want to see what happens to the stock
when a big bid is being placed. These orders can sometimes be fake so you would have to keep
track of the prints to see what happens at that price it flashed at. Keep note of these prices and
note the size of the flash bids. It is the same thing as a big bid except it is just flashing in the
level II. Watch and take notes how the stock reacts to these flash orders.

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Big Offers

CAT shows a big offer at $113.07 of 48,200 shares
What are Big Offers and why are they important?
A big offer is exactly what it name says. It is an offer that is way bigger than the normal offers
that are shown and represent institutional size. These are important to watch and to keep note
of because these are institutional orders and you want to follow what institutions are doing.
Remember, institutions are the big money and are the guys that move stock prices.
When a stock is showing 200 shares on the offer and 100 shares on the underlying offer above
that then this is usually normal, small sized offers. Let’s say that you see an offer above that or

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flash for 100,000 shares then this is an offer to watch and keep note of. So what does it mean
when there are 100,000 shares on the offer and 200 on the bid? It means that the stock will
probably trade lower. Remember to keep note of these offers and to remember the levels of
where they are at.
If this big offer gets filled and holds then that means the stock will probably trade lower. If it
lifts, then it is probably strong. You should also notice what happens to the stock when the big
offer is placed. Finally, a big offer is when there is an offer that is noticeably bigger than all of
the other offers, usually over 10,000 shares in size, but remember that all of this is relative to
what the other offers have been showing and the volume in the stock.
What do you do when there is a Big offer?
When you see a big offer then you usually want to step in front of that offer and exit if it starts
to decrement (or decrement quickly) or lifts. Also, keep in mind your real risk and what the
underlying offers are doing. When a big offer lifts then there will be more slippage than if a
regular offer lifts and you should factor that into your trading. When there is more size on the
offers than there are bids then it usually indicates that the stock should trade lower. When you
see these big offers you usually want to get in front of them by 1 cent because you will probably
not get filled at the same price of the big offer due to FIFO, first orders in first orders out, which
means the first order at that price will get filled. Finally, the exit of these big offers would be if it
starts to decrement (or decrement quickly) or lifts.

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FTNT shows a big offer at $25.15 of 98,300 shares
What does a Big offer look like on the Level II?
Big offers are very easy and simple to spot on the Level II. They stick out like a sore thumb. If
you see a few offers for 200 shares then one offer for 50,000 then that is the big offer. It would
look like this:
2 arca 40.40
500 NYSE 40.41

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1 nsdq 40.42
In the example above, the big offer is at $40.41 showing 50,000 shares in size while the other
offers are showing 100 and 200 shares. Like I previously stated, this is easy to spot and should
be noted when spotted.
Flash orders
Flash orders are when big offers are flashed at a price and disappear. This usually happens
when the order is hidden but sometimes shows or if they want to see what happens to the
stock when a big offer is being placed. These orders can sometimes be fake so you would have
to keep track of the prints to see what happens at that price it flashed at. Keep note of these
prices and note the size of the flash offers. It is the same thing as a big offer except it is just
flashing in the level II. Watch and take note how the stock reacts to these flash orders.
Big Orders stepping down/up
Sometimes when there is a big order on the bid or offer it will just stay there and wait to get
filled. Sometimes these orders will step up in price or down in order to get filled. When you see
a big order you usually want to step in front of it, follow the order and exit if it lifts/drops or
decrements. This is a simple trade that can be very profitable.
When you spot a big bid you usually want to step in front of it and exit if it drops or decrements
quickly. Sometimes that big bid will get hit for some stock and the stock will trade higher.
Sometimes that big bid will step up on the bid by a few cents in order to get filled. You want to
step in front of these orders and follow them until they get filled. Once they get filled you exit.
Simple right?
When a big bid continues to get hit for size you have to take note of how quickly it did and at
what prices. You usually want to follow these big bids and exit if they drop/decrement. When a
big bid is filled and drops then you usually want to be out of your long position (maybe enter
short?) because it indicates that the stock was just hit for size and will probably trade lower.
The same thing goes with big offers. You usually want to step in front of them and follow them
until it lifts or decrements. You want to follow these orders because it is what the institutions
are doing and they dictate where the stock is going to go. If there is a big offer, gets hit for
some size, then steps down, then that means the seller wants to get rid of the stock even if it’s
at lower prices. If the big offer then gets filled and lifts then you should exit your short position
(maybe enter long?) because it shows that there is more demand for that stock at that level.

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What is Decrementing?
Decrementing is when a bid or offer is reduced in size. This usually happens when the bid or
offer is getting filled and the level II is representing that in real time. The faster a bid or offer is
decrementing then the more important it is. You should take note of this and trade off of this
information.

Before

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After
What do you do when a Big Bid/Offer decrements?
When a big order decrements then you should think about exiting the position, if you are
trading in front of that big order. If it is decrementing quickly then you should really consider
exiting the position because the chances of the order dropping/lifting are high. When a big bid
decrements or decrements quickly, you should consider exiting your long position or consider
entering a short position. Remember that all of your other indicators should line up for a higher
probability trade. The same goes with a big offer. If the big offer starts to decrement, or
decrement quickly, then you should considering exiting your short position or consider getting
long.

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Sometimes there will be a stock on the verge of a break out. If there is a big offer at the whole
number and it starts to decrement quickly then that can mean the stock is about to break out
and might be a decent spot to enter long. The same goes with a stock that’s about to break
down and there is a big bid. If it decrements, or decrements quickly, then you should consider
exiting your long position or maybe enter short.
Can big bids/offers be fake?
Sometimes big bids/offers can be fake. You will know if they are real when the stock reaches
that level, you start to see prints come through and the bid/offer decrements. You will know
that they are fake if it gets to that price, it disappears, and it trades through that price with no
volume. Traders sometimes put big bids/offers in order to see what the stock does in reaction.
They also put these in these orders to fool other traders or algorithms.

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Held Bids and Held Offers

Held Bids and Held Offers
What are Held Bids and Offers and why are they important?
Held bids and Offers are one of the more used indicators in tape reading. By spotting them you
will be able to identify great risk/reward opportunities. Also, you will be able to spot great
entries where you can literally risk 1 cent. This indicator is very important when reading the
tape because it will present a lot of opportunities that you will not be able to see in the charts.
Also, by spotting these you will find great entries for stocks you want to be in. During the open
not much of the intraday chart has developed, so by spotting a held bid or offer and reading the
tape you will be able to find great risk/reward opportunities, some of which you can’t spot on
the charts. When a stock does a lot of volume at a certain price then we want to know this,
keep track of it and trade around that price because that price is now a level. The more volume
that is done at a certain price the more important the level is. This is very important
information that we should keep track of intraday and trade around. Finally, remember that all
volume is relative. This means that the volume has to be a lot relative to what has been trading
at every price.
What is a Held Bid?
A Held Bid is one of the more used indicators in tape reading. By spotting a Held Bid you will be
able to find a great risk/reward opportunity. A Held Bid is when there is at least 2-‐3 times more
volume traded on the bid than it shows on the Level II or more than you expect and it holds. By
expect, I mean traded relatively more volume than any other price. As previous stated, the
more volume trading at the level and holding the more important it is. This indicator is great to
use at the open and with stocks that are trending up to find great risk/reward opportunities
with high probabilities of panning out. Held bids should always be considered when spotted
whether you are long or short. If you are short already, this might be a reason to cover some or
maybe even add more if the Held Bid drops. Just like the other indicators, you will need more
than just this indicator in your favor to get in the trade. As previously stated, a Held Bid is when
there is at least 2-‐3 times more volume traded on the bid than it shows on the Level II or than
you expect and holds that price. Remember that it is all relative to how much has been trading
at other prices, the more volume traded at that level and holding then the more important it is.
You should also keep in mind the supply and demand dynamics of a held bid. When the Held
Bid drops that means that the sellers are winning aka there is more supply than demand and
the prices should see lower prices. In vice versa, if the bids hold that means the buyers are
getting more aggressive aka there is more demand for stock at that price and it should see

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higher prices. Held bids can refresh and not show the amount of size they are buying or want to
buy.
What do you do when a bid holds? When a bid drops?
When a bid is holding then you should get long. If a bid drops then you should not be long,
possibly short depending how the stock is trading overall and what the other indicators are
saying. It’s that simple! If there is a Held Bid then I should be long, repeat that statement to
yourself 5 times and ingrain that into your brain since it should be instinct to react upon it. The
reason you are getting long the stock is because someone is supporting it at that level. Also, you
should pay attention to when a bid drops. If the bid drops then you no longer have a reason to
be in the stock so you hit out if it (if you are long the stock at the Held Bid). If the bid drops then
you should hit out of the stock, reevaluate, and gather information. Every trade you make gives
you information about a stock, so use it to your advantage. This doesn’t mean that you should
short it, remember that you should have all of your indicators in your favor if you’re looking to
get into a position. If all of your indicators are in your favor and it is looking like the stock is
going to head lower then it would be a good position to add to a short when the Held Bid drops,
or initiate a short position if you are not already in a position. Again, with all the other
indicators in your favor. Buying at the price where a bid is held is good technique for up
trending stocks, it allows you to capture most of the up move while having a small amount of
risk. Finally, keep in mind the supply and demand dynamics of a bid holding and dropping. If the
bid drops then there is more supply, if the bid holds then there is more demand for the stock at
that level.

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DANG held bid and drops, trades lower

DRI keeps holding the bid then dropping

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DRI trades lower
What does a Held Bid look like on the Prints and Level II?
On the Level II and Prints a Held Bid is easy to spot when you are 100% focused and reading the
tape. As previously stated, a Held Bid is when there is at least 2-‐3 times more volume traded on
the bid than it shows on the Level II or more than you expect and holds. By expect I mean
traded more volume than any other price (relative). As previous stated, the more volume
trading at the level and holding the more important it is. A Held Bid should look something like
this (this is a basic example, so use this as the blueprint when looking for Held Bid): Let’s say
LVS just went up from $45 to $45.25 and is in an uptrend. After that quick up move you see that
some bids are hit and starts to pull back a bit. The bid now drops to $45.16 and at that price
there is an NYSE bid for 200 shares in the Level II. You now see a bunch of prints for 100 shares
at $45.16 (more than you expected and more than it has traded relatively to any other price
there), but the bid never drops below that price. That is what you see when there is a Held Bid.
A stock shows a certain amount of stock on the Level II at a certain price and prints at least 2-‐3
times that amount at that same price or at least 2-‐3 times more than you expected it to print at
that price and holds. This means that there is a buyer there buying a lot of stock that he is not
showing. You now notice that there is an underlying bid at $45.15, so the play would be you get
long at $45.16 on a different ECN or long at $45.17 and you get out of the stock if the bid drops
to $45.15.

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CRK is holding the bid at 19. Only showing a little bit of size but trading a lot more than its
showing and has traded at the other prices.

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Before

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After

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What does a Held Bid look like on a chart?
TEVA holds the bid at 52
DANG holds the bid at 30

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CRK holds the bid

CRK holds the bid at 18.50

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CRK trades higher

CRK trades higher

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TXN holds the bid on the open at 28.50, 28.80, and 29.10

TXN trades higher

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RIG holds the bid at 41.85

RIG trades higher

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Pot holds the bid at 39.90 and 39.95

Pot trades higher

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MLM holds the bid and holds higher

MLM trades higher

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What is a Held Offer?
A Held Offer is one of the more used indicators in tape reading. By spotting a Held Offer you will
be able to find a great risk/reward opportunity. A Held Offer is when there is at least 2-‐3 times
more volume traded on the offer than it shows on the Level II or more than you expect and
holds. By expect I mean traded more volume than any other price (relative). As previous stated,
the more volume trading at the level and holding the more important it is. This indicator is
great to use at the open and with stocks that are trending up to find great risk/reward
opportunities with high probabilities of panning out. Held offers should always be considered
when spotted whether you are long or short. If you are short already, this might be a reason to
add some or maybe even cover some if the Held Offer lifts. Just like the other indicators, you
will need more than just this indicator in your favor to get in the trade. As previously stated, a
Held Offer is when there is at least 2-‐3 times more volume traded on the offer than it shows on
the Level II or than you expect and holds. Remember that it is all relative to how much has been
trading at other prices, the more volume traded at that level and holding then the more
important it is. You should also keep in mind the supply and demand dynamics of a held offer.
When the Held offer lifts that means that the buyers are winning aka there is more demand
than supply and the prices should see higher prices. In vice versa, if the offer hold that means
the sellers is getting more aggressive aka there is more supply for stock at that price and it
should see lower prices. Held offers can refresh and not show the amount of size they are
selling or want to sell.
What do you do when an offer holds? When an offer lifts?
When an offer is holding then you should get short. If an offer lifts then you should not be
short, possibly long depending how the stock is trading overall and what the other indicators
are saying. It’s that simple! If there is a Held offer then I should be short, repeat that statement
to yourself 5 times and ingrain that into your brain since it should be instinct to react upon it.
The reason you are getting short the stock is because someone is selling it at that level. Also,
you should pay attention to when an offer lifts. If the offer lifts then you no longer have a reason to
be in the stock so you hit out if it (if you are short the stock at the held offer). If the offer lifts then you
should hit out of the stock, reevaluate, and gather information. Every trade you make gives you
information about a stock, so use it to your advantage. . If all of your indicators are in your favor
and it is looking like the stock is going to head higher then it would be a good position to add to
a long when the Held Offer lifts, or initiate a long position if you are not already in a position.
Again, with all the other indicators in your favor. Shorting at the price where an offer is held is
good technique for down trending stocks, it allows you to capture most of the down move
while having a small amount of risk. Finally, keep in mind the supply and demand dynamics of

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an offer holding and lifting. If the offer lifts then there is more demand, if the offer holds then
there is more supply for the stock at that level.
What does a Held offer look like on the Prints and Level II?
On the Level II and Prints a Held Offer is easy to spot when you are 100% focused and reading the
tape. As previously stated, a Held Offer is when there is at least 2-‐3 times more volume traded on
the bid than it shows on the Level II or more than you expect and holds. By expect I mean traded
more volume than any other price (relative). As previous stated, the more volume trading at the
level and holding the more important it is. A Held Offer should look something like this (this is a
basic example, so use this as the blueprint when looking for Held Offer): Let’s say GMCR just went
down from $52 to $51.75 and is in a downtrend. After that quick down move you see that some
offers are hit and starts to pull up a bit. The offer now lifts to $51.86 and at that price there is an
NYSE offer for 200 shares in the Level II. You now see a bunch of prints for 100 shares at $51.86
(more than you expected and more than it has traded relatively to any other price there), but the
offer never lifts above that price. That is what you see when there is a Held Offer. A stock shows a
certain amount of stock on the Level II at a certain price and prints at least 2-‐3 times that amount at
that same price or at least 2-‐3 times more than you expected it to print at that price and holds. This
means that there is a seller there selling a lot of stock that he is not showing. You now notice that
there is an underlying offer at $51.87, so the play would be you get short at $51.86 on a different
ECN or short at $51.85 and you get out of the stock if the offer lifts to $51.86.

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What does a Held Offer look like on a chart?

FMCN holds the offer at 18 and trades lower

FSLR holds the offer at 50.60 and lifts

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FSLR trades higher
HAL holds the offer at 34.28 and 34.20 then briefly trades lower

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HAL holds the offer at 35.65, 35.40 and 35.20 trades lower
MJN holds the offer at 73 and trades lower

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GRPN holds the offer at 30, lifts and briefly trades higher. It then goes back to 30, holds the
offer and trades lower.
What are “good” tape reading stocks?
Stocks that tend to be good tape reading stocks have the following characteristics: are going to
be active during the day and in play. You can tell which stocks these are because they are
moving in the premarket with more volume than usual, gapping up or down, or have news.
These stocks are the ones you should actively be trading because they will present to you high
probability trades and have a cleaner tape to read than non active stocks. Like I said earlier,
these stocks are stocks that have news, are gapping up or down, have a lot of volume, have
tight spreads, and are volatile enough to trade. They can also have a nice technical setup that
will make the stock move. In play stocks are stocks that have fresh news, are gapping up or down,
have a lot of volume, have tight spreads, and are volatile enough to trade.

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How to get better at tape reading
It takes time. Every day that you watch tape adds more experience. Tape reading is not
something you learn over night but something that you continue to learn day by day after you
know the basics and foundation. The more experience you have, the better at tape reading you
will be. There is no ultimate master tape reader status that you will achieve because you can
only get better day by day... even when you think you’re an expert.
Boosting your experience and learning curve
There are a few ways to boost your experience and shorten your learning curve. You can start
by reviewing your daily trading tape, allowing you to review your trades without the emotions
of the moment. Also, at Bidhitter.com we offer a Tape reading video archive of in play stocks.
This is all raw and unedited video of 4 level II boxes with prints and 8 charts, 2 per box. By
watching these videos in your spare time you will shorten the learning curve.
Putting it all together
Now you should know the basics of tape reading, but remember that it is not something you
can learn overnight. You must practice and practice your tape reading stills day in and day out if
you want to improve. You should put all of the “indicators” we talked about above together
when reading the tape. Use the Level II and prints to see what is happening with a stock. Spot
big bids and offers and trade with them along with held bids and offers. Finally, you should also
use tape reading along with charts and market psychology for higher probability trades.

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Tape Reading 101

Why is tape reading important?

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How tape reading is an art and not a science

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How does tape reading lower risk?

How do you improve tape reading skills?

Trading the open with only reading the tape

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Level I & II Box

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Time and Sales

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With the example above fill out this quiz below:

1. What is the ticker is on the box?

2. What was the last price it traded at?

4. What was the open? The close? High? Low? Spread?

5. What is the spread of the stock?

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Answers for prints

1. What is the ticker is on the box?

a. Gs, Goldman sachs

2. What was the last price it traded at?

4. What was the open? The close? High? Low? Spread?

5. What is the spread of the stock?

a. 161.21 bid, 161.25 offer

a. 10.7 million shares

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What is a red print? A green print? A white print?

Using prints as an indicator

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Big print then big print higher

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Big buyer/seller with a refreshing ECN

Big buyer/seller drops or lifts

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Buyer was holding the RIG at $42.70

Using prints and level II together

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Bidding, Offering, Overlapping, and Sweeping

What is a bid? What is an offer?

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What is sweeping?

When to bid/offer vs. sweeping?

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What is overlapping?

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§ What is your trading style?

§ If the stock has fallen quickly and there are bids

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§ If the stock is in a range and breaks out

o Pay the offer when the stock breaks out