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How to learn to "read the Tape" aka Volume Foot Print / Delta chart.


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How to learn to "read the Tape" aka Volume Foot Print / Delta chart.

  #1 (permalink)
 Meklon 
New York, USA
 
Experience: Advanced
Platform: Sierra Chart
Trading: RTY, ES, YM, NQ, CL, NG, GC, HG
Posts: 61 since Oct 2016
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Thanks Received: 197

Hello forum,

I am not new to trading but only recently have discovered the great scope of information hiding in the ability to "read the tape" - understanding the volume delta and foot print charts. There are many companies and software packages available and I have done an extensive research to evaluate and compare them. However, what I am still missing is a good place to learn on HOW TO READ the foot print chart and understand what exactly taking place behind the curtain. Is there a generic crash course somewhere that a trader new to the concept of "reading the tape" could study to understand the fundamentals on how to interpret the Bid vs Ask volume information and basic strategy for decision making based on this data? Again, I have done a lot of leg work already, I do understand the concept and meaning of buy / sell imbalances, positive / negative Delta, single prints, etc. but where can I find the basic knowledge on how to integrate this knowledge into decision-making process when to ENTER or EXIT the trade?

Any help would be greatly appreciated!!!

Thanks,

Mek.

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  #3 (permalink)
 
xplorer's Avatar
 xplorer 
London UK
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hi there @Meklon

Not sure when you say 'tape reading' whether you refer to interpreting the information coming from a 'ladder' or Depth of Market but if you do, the 2 places I usually recommend people to look first and foremost are the Jigsaw Trading free course video set and John Grady's NoBSTrading website.

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  #4 (permalink)
 
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 mmaker 
Toronto Canada
 
Experience: Intermediate
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Meklon View Post
Hello forum,

I am not new to trading but only recently have discovered the great scope of information hiding in the ability to "read the tape" - understanding the volume delta and foot print charts. There are many companies and software packages available and I have done an extensive research to evaluate and compare them. However, what I am still missing is a good place to learn on HOW TO READ the foot print chart and understand what exactly taking place behind the curtain. Is there a generic crash course somewhere that a trader new to the concept of "reading the tape" could study to understand the fundamentals on how to interpret the Bid vs Ask volume information and basic strategy for decision making based on this data? Again, I have done a lot of leg work already, I do understand the concept and meaning of buy / sell imbalances, positive / negative Delta, single prints, etc. but where can I find the basic knowledge on how to integrate this knowledge into decision-making process when to ENTER or EXIT the trade?

Any help would be greatly appreciated!!!

Thanks,

Mek.

Reading the tape was possible back in the day before the exchange broke the 100 lots into 1's and 2 lots.

You could actually watch a big house walk price down, while daytraders who thought they were beating a big bid to the punch would place a higher bid above the big bid, only to watch the floor drop out a few minutes later. Rinse wash and repeat. An hour later price is much lower.

Since they broke up the tape it is pretty hard to see this with the naked eye and so several tools have been devised to see this and other activities. Volume profile, Footprint, consolidated tape are some of these tools.

Bookmap is another and DT has a response to bookmap.

How people use these tools to make trading decisions are as numerous as there are fingerprints since no two people trade the same.

The basic knowledge you seek is what people pay for taking courses or spend hours scouring the net for clues imho. You will see what others do but you have to find what works for your personality.

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  #5 (permalink)
 
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 Silvester17 
Columbus, OH
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Meklon View Post
Hello forum,

I am not new to trading but only recently have discovered the great scope of information hiding in the ability to "read the tape" - understanding the volume delta and foot print charts. There are many companies and software packages available and I have done an extensive research to evaluate and compare them. However, what I am still missing is a good place to learn on HOW TO READ the foot print chart and understand what exactly taking place behind the curtain. Is there a generic crash course somewhere that a trader new to the concept of "reading the tape" could study to understand the fundamentals on how to interpret the Bid vs Ask volume information and basic strategy for decision making based on this data? Again, I have done a lot of leg work already, I do understand the concept and meaning of buy / sell imbalances, positive / negative Delta, single prints, etc. but where can I find the basic knowledge on how to integrate this knowledge into decision-making process when to ENTER or EXIT the trade?

Any help would be greatly appreciated!!!

Thanks,

Mek.

hi @Meklon,

if you're using ninjatrader or sierra charts, a fantastic tool is the GomOrderFlowPro indicator by @gomi. an overview and also some examples on how to use it can be found here:



as far as education, the best place is of course market delta (the founder of footprint):

https://marketdelta.com/

here're a few more useful links from market delta:

- top webinars

https://marketdelta.com/videos/reading-order-flow-made-easy-introducing-the-volume-imbalance-footprint/

https://marketdelta.com/videos/reading-order-flow-the-path-to-better-entries-and-exits-part-1/

https://marketdelta.com/videos/reading-order-flow-the-path-to-better-entries-and-exits-part-2/

- top downloads

https://www.marketdelta.com/wp-content/uploads/2016/10/Learning-to-Read-the-Footprint-Chart.pdf

https://www.marketdelta.com/wp-content/uploads/2016/10/footprint-anatomy.pdf

https://www.marketdelta.com/wp-content/uploads/2016/10/MarketDelta-Strategy-Guide.pdf

good luck!!

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  #6 (permalink)
 Meklon 
New York, USA
 
Experience: Advanced
Platform: Sierra Chart
Trading: RTY, ES, YM, NQ, CL, NG, GC, HG
Posts: 61 since Oct 2016
Thanks Given: 53
Thanks Received: 197

Hello Guys,

Thank you all very much for responding to my very generic question with some specifics, I appreciate it!

Yes, I was referring to the information that trader can obtain from the Volume Foot Print chart and the Delta numbers associated with it. NOT the Price ladder and NOT the DOM. In my humble opinion the Depth Of Market lists only passive orders which can be "pulled" or changed any time while the Volume Foot Print chart and Delta list the orders that were executed and clearly show if there was a significant change in the BUY or SELL activity by institutions. Taking that information in combination with other factors such as Market Context / TPO and learning how to interpret it is what I am looking for.

I am aware of many companies that offering software add-ons for NT and Sierra Charts which help to decipher this information in more readable format, but very few of them (if any) actually teach you how to interpret it and apply in the trading. For example, NOFT-Traders seem to have a very nice an colorful package for which they charge an arm and a leg (I believe around $5000 +) but is it really worth it? I would rather use something simpler as long as I know and understand how to read the action presented by the Volume Foot Print and Delta charts.

Also, I was not aware that GomOrderFlowPro indicator by @gomi is available for Sierra Charts. Does any one have an experience running it on Sierra?

Again, thank you all for all your help and the links provided!

Regards,

Mek.

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  #7 (permalink)
yawaniga
chennai/india
 
Posts: 155 since Sep 2015
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Meklon View Post
Hello Guys,

Thank you all very much for responding to my very generic question with some specifics, I appreciate it!

Yes, I was referring to the information that trader can obtain from the Volume Foot Print chart and the Delta numbers associated with it. NOT the Price ladder and NOT the DOM. In my humble opinion the Depth Of Market lists only passive orders which can be "pulled" or changed any time while the Volume Foot Print chart and Delta list the orders that were executed and clearly show if there was a significant change in the BUY or SELL activity by institutions. Taking that information in combination with other factors such as Market Context / TPO and learning how to interpret it is what I am looking for.

I am aware of many companies that offering software add-ons for NT and Sierra Charts which help to decipher this information in more readable format, but very few of them (if any) actually teach you how to interpret it and apply in the trading. For example, NOFT-Traders seem to have a very nice an colorful package for which they charge an arm and a leg (I believe around $5000 +) but is it really worth it? I would rather use something simpler as long as I know and understand how to read the action presented by the Volume Foot Print and Delta charts.

Also, I was not aware that GomOrderFlowPro indicator by @gomi is available for Sierra Charts. Does any one have an experience running it on Sierra?

Again, thank you all for all your help and the links provided!

Regards,

Mek.

using GomOrderFlowPro for NT Version, hope the core concept is same whatever platform differs. Its worth to try,
BTW check orderflows.com there's some video course offered by this vendor.

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  #8 (permalink)
yawaniga
chennai/india
 
Posts: 155 since Sep 2015
Thanks Given: 111
Thanks Received: 149


mmaker View Post

The basic knowledge you seek is what people pay for taking courses or spend hours scouring the net for clues imho. You will see what others do but you have to find what works for your personality.

This's the honest reply. i follow the set up based on the above quote.

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  #9 (permalink)
 Meklon 
New York, USA
 
Experience: Advanced
Platform: Sierra Chart
Trading: RTY, ES, YM, NQ, CL, NG, GC, HG
Posts: 61 since Oct 2016
Thanks Given: 53
Thanks Received: 197


yawaniga View Post
using GomOrderFlowPro for NT Version, hope the core concept is same whatever platform differs. Its worth to try,
BTW check orderflows.com there's some video course offered by this vendor.

Thank you yawaniga,

I have studied the orderflows.com. The material is quite comprehensive and helpful. Many concepts of the Foot Print and Delta application in trading became quite clear right after this.

Mek.

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  #10 (permalink)
 Meklon 
New York, USA
 
Experience: Advanced
Platform: Sierra Chart
Trading: RTY, ES, YM, NQ, CL, NG, GC, HG
Posts: 61 since Oct 2016
Thanks Given: 53
Thanks Received: 197



Silvester17 View Post
hi @Meklon,

if you're using ninjatrader or sierra charts, a fantastic tool is the GomOrderFlowPro indicator by @gomi. an overview and also some examples on how to use it can be found here:



as far as education, the best place is of course market delta (the founder of footprint):

https://marketdelta.com/

here're a few more useful links from market delta:

- top webinars

https://marketdelta.com/videos/reading-order-flow-made-easy-introducing-the-volume-imbalance-footprint/

https://marketdelta.com/videos/reading-order-flow-the-path-to-better-entries-and-exits-part-1/

https://marketdelta.com/videos/reading-order-flow-the-path-to-better-entries-and-exits-part-2/

- top downloads

https://www.marketdelta.com/wp-content/uploads/2016/10/Learning-to-Read-the-Footprint-Chart.pdf

https://www.marketdelta.com/wp-content/uploads/2016/10/footprint-anatomy.pdf

https://www.marketdelta.com/wp-content/uploads/2016/10/MarketDelta-Strategy-Guide.pdf

good luck!!

Hi Silvester17,

Much appreciate your detailed response! I have initiated the trial of the Gomi indicators and looking forward to setting them up and learning more from the links you have referenced.

Cheers,

Mek.

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