Tape Reading

AAA

DEFINITION of 'Tape Reading'

An old investing technique used by day traders to analyze the price and volume of a particular stock in order to execute profitable trades. Tape reading involves evaluating the size of stock orders, order speed, order price, and order condition (at ask, at bid, between ask and bid) to identify trends in trading behavior by insiders, professionals and the general public. These trends help a trader recognize good times to buy or sell.

INVESTOPEDIA EXPLAINS 'Tape Reading'

The term gets its name from the old method of displaying trade, bid and ask information on paper printed by ticker tape machines (today, it is displayed electronically). Investors read the tape numbers to create an unemotional analysis and capitalize on the behavior of the market. This technique can be profitable whether the market is bullish or bearish.

RELATED TERMS
  1. Ticker Tape

    A computerized device that relays financial information to investors ...
  2. Order

    An investor's instructions to a broker or brokerage firm to purchase ...
  3. Painting The Tape

    A form of market manipulation whereby market players attempt ...
  4. Consolidated Tape

    An electronic program that provides continuous, real-time data ...
  5. Ask

    The price a seller is willing to accept for a security, also ...
  6. Bid

    1. An offer made by an investor, a trader or a dealer to buy ...
Related Articles
  1. Understanding The Ticker Tape
    Investing Basics

    Understanding The Ticker Tape

  2. Translating Ticker Talk
    Options & Futures

    Translating Ticker Talk

  3. The History Of Information Machines
    Fundamental Analysis

    The History Of Information Machines

  4. Technical Analysis Strategies for Beginners
    Trading Strategies

    Technical Analysis Strategies for Beginners

Hot Definitions
  1. Halloween Strategy

    An investment technique in which an investor sells stocks before May 1 and refrains from reinvesting in the stock market ...
  2. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  3. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  4. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  5. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  6. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
Trading Center