Greed is what comes into play each time gold and silver set up as a bullish trade. I'm looking for a breakout, not to call a bottom. There is far too much bravado about not hedging in retail investing. Sector Selection and Trading Strategies 6pm ET CLICK HERE FOR INVITE AND TO REGISTER. Tape reading prior to the advent of the modern computer age was done literally by watching the trades posted on a roll of paper known as a ticker tape.

The huge technological jump in electronics during the s and 70s allowed for that ticker tape to be posted as the electronic tape we see today on financial television, most times at the bottom of the television screen. With thousands of stocks trading a billion or so shares every day tape reading in that old fashion way today is impossible to be reported quickly and efficiently.

Thus the art of reading analyzing the ticker tape analysis has morphed into data mining and analyzing the vast amount of numbers displayed on financial websites such as Yahoo! Finance as well as that shown on financial television. When I was on the trading floor in the 80s to early 90s we floor traders used what was called a trading monitor in order to read the tape.

That monitor was a very large television-like screen on which was listed about 40 stocks in stock symbol form.

Only the stock symbols, the last trades and the net changes of those last trades were shown on that monitor. The screen was placed about 10 feet above our pit so anyone could see the screen from the back of the pit. My head was cocked upward most of the day as I intently stared and analyzed what was seen on that big, very important, screen.

For me the art of tape reading had morphed into the art of reading a trading monitor without getting a sore neck. The other large, in size and script, monitors I intently watched, if not much more so, were the dynamically scrolling Wall Street Journal newswire and the Reuters newswire. Very little information presented on both of those news sources slipped past me. When I saw news on these screens that I thought was important enough to be a stock price changer, I would instantly shift my focus to the trading monitor to see if the market agreed with that analysis.

Back then a New York minute was in relative time, the same as it is today as per news and the market's reactions to the news. Once news was made public the trader was in the starting gate waiting for any reactions to the news. Options being stocks on steroids, if not leveraged grenades with their pins removed, being at the ready for a possible trade was standard operating procedure in military terms--S.

Quick and accurate data analysis created the trader's edge. It is still so today! Once I began to notice changes in stock prices in either direction due to data being analyzed I had to decide if stock market contagion in either direction was quickly forthcoming or not. The immediate question begged was to hold current positions and thus continue that risk, or adjust those positions.

Uncertainty due to lack of both preparedness and lack of experience was just as deadly. Proper analysis of the cause of the price changes were quite rewarding.

Tape Reading

The process remains such today. Never forget that when trading options the underlying stock, ETF, etc. It is imperative to analyze the underlying first, and then shift the analysis to its options market. Your ability to read the modern tape, using your own effective critical path, will determine your options trading results.

The edge today relative to what the edge was in the day of ticker tape reading lies in the art of knowing what to read and thus analyze in addition to getting the work done correctly so those conclusions can make you money. Thus you need to have a disciplined approach to the analysis. Information is only the path to power. It is not the actual power. What is the actual power is the accurate analysis of that information as it relates to stock, bond, and option values.

In other words get on the path to GIGO garbage in, garbage out and the best you will divine is the right answers to the wrong questions being asked. The modern art of reading the tape begins with knowing: Part 2 will cover these three key elements as they pertain to the modern art of reading the tape. OptionsProfits can be followed on Twitter at twitter. Action Alerts PLUS is a registered trademark of TheStreet, Inc.

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Jim Cramer's Best Stocks for Most Recent Trade Alert. Subscribe Access insights and guidance from our Wall Street pros. Find the product that's right for you. Part 1 Skip Raschke. Apr 11, Here's the Key to Trading Gold and Silver Greed is what comes into play each time gold and silver set up as a bullish trade. Jun 5, 2: May 22, 2: Refuse to Hedge and You'll Step on a Mine There is far too much bravado about not hedging in retail investing.

May 15, 2: Mar 15, 2: Cowen Sees Delays to Apple's iPhone 8 Due to Fingerprint Sensor Issues. Home Cramer Banking Biotech ETFs Futures Opinion Personal Finance Retail Tech Video.

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