Mastering Tape Reading: Combine Price Action and Volume

Mastering Tape Reading: Combine Price Action and Volume
Finally! Tape reading explained. Reading the tape combines price action and volume, and how they create stock trading opportunities.
This is tape reading trading strategy is advanced trading education that you ought to know.
Tape reading exclusively with price action is an incomplete picture. So I discuss how to determine reversals in both momentum moves and when longer term order flow has changed.
Introduction (0:00 - 1:02)
Introduces the topic of tape reading and how to combine it with volume analysis.
Importance of Volume in Technical Analysis (1:02 - 3:50)
Explains the significance of volume in identifying true support/resistance levels.
Provides the analogy of coat sales at different price points.
Combining Price Action and Volume Analysis (3:50 - 5:35)
Emphasizes the importance of considering both price action and volume.
Discusses the concept of "real price" and the need to consider volume.
Fuel, Exhaustion, Accumulation, and Distribution (5:35 - 10:25)
Defines and explains the concepts of fuel, exhaustion, accumulation, and distribution.
Highlights the importance of recognizing these patterns for better trading decisions.
Example: DKNG Distribution Call (10:25 - 12:55)
Provides an example of identifying distribution in DKNG and the subsequent price action.
Considerations in the Current Market Environment (12:55 - 14:00)
Acknowledges the impact of the COVID-19 stimulus package on market dynamics.
Example: Exhaustion Patterns (14:00 - 16:30)
Illustrates examples of exhaustion patterns in DOCU, SPOT, and NKLA.
Example: Accumulation in CRWD (16:30 - 17:50)
Demonstrates an example of identifying accumulation in CRWD and its subsequent price movement.
Example: Potential Distribution in FSLR and OSTK (17:50 - 21:05)
Discusses potential distribution patterns in FSLR and OSTK, emphasizing the need for confirmation.
Conclusion and Key Takeaways (21:05 - 22:50)
Summarizes the importance of combining price action and volume analysis.
Highlights the advantages of being a "tape reader" over a "chart reader."
Importance of Volume in Technical Analysis:
Learn the crucial role of volume in technical analysis and how it can reveal the true support/resistance levels. Discover the "coat sales" analogy that illustrates why considering volume is essential for accurate price level identification and trading decisions.
Combining Price Action and Volume Analysis:
Unlock the power of combining price action and volume analysis for better trading outcomes. Understand the concept of "real price" and why relying solely on chart patterns without considering volume can lead to missed opportunities or costly mistakes.
Fuel, Exhaustion, Accumulation, and Distribution:
Master the art of recognizing fuel, exhaustion, accumulation, and distribution patterns in stocks. Learn how these volume-based indicators can signal potential reversals, momentum exhaustion, and smart money involvement, enabling you to make more informed trading decisions.
Example: DKNG Distribution Call:
See a real-world example of how tape reading and volume analysis identified distribution in DKNG, allowing for a timely trading call and profit preservation. Discover the power of recognizing changing dynamics before the majority of the market.
Example: Exhaustion Patterns:
Witness practical examples of exhaustion patterns in stocks like DOCU, SPOT, and NKLA. Learn how to spot these telltale signs of momentum exhaustion and use them to lock in profits or adjust your trading strategy accordingly.
Example: Accumulation in CRWD:
Explore an insightful case study of accumulation in CRWD, where volume spikes and support levels revealed smart money involvement. Gain insights into identifying and capitalizing on such accumulation patterns for potential reversals and upside moves.
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[@skybox-fs6dv]

I came here looking for Time and Sales explanation based upon the title of the video. Instead, I got something else. I enjoyed and appreciate the insight. I've been using volume as one of two indicators and I've now successfully traded 12 out of 14 trades. I've documented each transaction to go back and re-read and learn what I did. Watching what you explained confirms that I'm on the right track. But I was still looking for Time and Sales to up the ante on the trading insight.😃😃😃

[@christophertone9566]

fantastic video! huge thumbs up! there's so many beginner video explaining the basics but not too many advanced videos. so thank you!!

[@StockTradingPro]

Glad it was helpful!

[@markj-uk]

Fantastic - Thank you so much!

[@StockTradingPro]

Glad you liked it!

[@thegoldenboy294]

isnt this what volume profile is used for?

[@kinyuamwangi3595]

following with pen and paper.

[@charlies8201]

I know this is two years ago. Pete, I watch every day you post something. But my question is which is the more important the thousand coats sold or the 50 coats sold.

[@StockTradingPro]

Hey Charlie, thanks for watching.

[@jwlew818]

why do some charting systems show a different view of the D/W/M candlesticks than the ones you show. shouldn't they all be the same relatively?

[@StockTradingPro]

good question, do you have an example

[@jwlew818]

@@StockTradingPro i was using yahoo compared to the one you use in your video examples.

[@CMMCMXCV]

I know you’re a tape guy but would you see value in using the VWAP line to find stronger resistance/supports? Thanks for the video Pete! Always bringing that tangible value

[@StockTradingPro]

this is what works for me. thank you for the idea

[@CMMCMXCV]

Stock Trading Pro cheers!

[@edwinbab3205]

How can find different strategy for different.mkt condition

[@StockTradingPro]

strategies don't change, how you use them does. Especially adjusting initial position size.

[@edwinbab3205]

@@StockTradingPro how learn different strategy for different mrkt condition

[@mattm5333]

Hey man, thanks for the great advice look forward to future videos if you're ever looking to take on a young apprentice let me know haha, cheers!

[@fosterchild4523]

This is the EXACT pattern ($DKNG) that I day trade every single day. It has the same shape over and over. A nice bullish move up, a pullback where volume falls significantly, then, as the stock breaks out of the pullback, volume increases.....these are longs thinking that they are buying at the beginning of the next leg up......but when conditions are right, they are actually getting trapped...........I put a "sell stop" under the low of those high volume candles. If the price continues to move up, I am rarely triggered into a short, but if those high volume moves up are weak longs, as soon as the price falls under the low of one of those big volume candles, all of those longs are trapped......they get scared easily and bail quickly. This pattern will result in either a deeper correction or a full blown reversal. Flip this pattern upside down and it's exactly the same for a long.

[@StockTradingPro]

Good stuff, keep up the good work

[@victorregal1385]

Kid