In the world of trading, there are two types of individuals: the Scalper and the Tape Reader. The Scalper is akin to a car without shocks, constantly bouncing over every road bump with a rickety motion, making it difficult to navigate smoothly. On the other hand, the Tape Reader resembles a well-tuned train, gliding steadily along the tracks of the tape, taking cues from the market engine and unaffected by external influences.


To be an ideal Tape Reader, certain qualifications are necessary. Firstly, self-reliance is paramount. Relying on others' advice or opinions can lead to being swayed by countless external factors. A Tape Reader must have the confidence to analyze the market independently and make well-informed decisions.


Secondly, deep knowledge of the market mechanics is crucial. Understanding the history of earnings for traded stocks, financial conditions of relevant companies, the behavior of large operators, and various market types (bull, bear, sideways, trending, etc.) are essential. Additionally, the Tape Reader should gauge the impact of news and rumors and determine the best stocks and moments for trading while comprehending market forces behind them.


Recognizing market swings, inherent price weaknesses or strengths, and understanding the logic behind price movements are essential skills. Identifying turning points in the market and envisioning the exchange floor's activity require keen observation.


Moreover, a Tape Reader must possess nerve and persistence to endure losses during adverse periods. Self-control is necessary to avoid overtrading, and a calm disposition is vital for balanced decision-making at all times.


Creating an environment conducive to concentration is crucial. A secluded space equipped with a ticker, a desk, and a private phone connection to the broker's office can help eliminate distractions from stock tips and gossip prevalent in a broker's office.


The role of news in trading is discussed. While news feeds can be useful for understanding the reasons behind market movements, the true skill of a Tape Reader lies in anticipating future market trends rather than reacting to past news.


In this manual, we aim to provide a practical methodology for Tape Reading, suitable for traders of varying proficiency levels. We will explore essential market factors and techniques used by experts, supported by tape reproductions. Our goal is to create valuable insights and assistance for those engaged in trading, moving away from the hit-or-miss approach.