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Wipe trade is a term that institutions use when they buy large parts or the complete top level
of the order book if it only consists of small change so that there is virtually no danger that any
of the counterparties is knowing anything that they don't. Like one mops the floor they just wipe
off the small change (the wiped trades).
Regarding tape reading: If you take a look at e.g. Velez/Capra books of the millennium, they
already show many of the tools that have trickled down to retail software in the meantime.
But as always the professional leaders like Blackrock, Bridgewater, Goldman Sachs etc. have
established other and more sophisticated techniques long ago. So it appears cute when retail
traders regularly show up at algo battles with bow and arrow.
How can they see the level composition? I thought it's forbidden.
If they can, is there a possibility that "change" is indeed a big order divided into small orders by some algo mechanism? In this case to buy it could be a mistake...
But still we know (do we?) that there are people who consistently make money. Maybe that's because of proper risk management and self-control?
That's why statistical methods, machine learning etc. exist - they generate e.g. an ex ante slippage estimate
of order flow behavior and only execute if the estimate is close to zero. A human trader can't even blink in the
meantime. Since ex ante is only an estimate, ex post they will also be wrong from time to time - but extremely
rarely compared with retail sheep that try to compete in the same arena.
Ad good trading: @Big Mike has stressed that point a million times in his posts: An important step in the
development of a trader is the insight that good trading doesn't depend on indicators or on any other
methods that are hyped by brokers, software vendors and the like.
Regarding statistical methods, machine learning etc. much depends on how familiar you are with math.
If you are looking for some introductory reading, imho Wiley's "For Dummies" are fine + inexpensive.
Statistics For Dummies + Workbook
R For Dummies
Machine Learning For Dummies
All of them have bibliographies for further on- and offline reading and you will also find many threads
here which cover these topics - but which are sometimes difficult to understand if a trader doesn't have
the necessary foreknowledge.
Regarding good trading, seasoned traders like @Big Mike, @Inletcap, @kevinkdog, Okina (rip), @tigertrader
- in alphabetical order and just to mention a few - are surely worth reading and show very different styles and
insights.
A funny start for determining your position regarding current basic professional requirements in the
industry is: 150 Most Frequently Asked Questions on Quant Interviews
From time to time people from leading quantitative hedge funds publish academic articles.
They have a double intention: discussing state-of-the-art topics and finding talents.
10-20 years from now we will presumably find some of that in the retail standard
For many traders that is presumably true - esp for those who are undercapitalized, unwilling to work as hard
as in any other demanding job, and/or trying to compete manually in areas where algos dominate.
Avoiding errors like these, you will already have a headstart over 90% of the retail crowd.