Tape Reading

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Definition of 'Tape Reading'

Tape reading is a technical analysis method used to analyze the market by looking at the trading activity on the tape. Tape readers believe that the tape contains all the information needed to make a trade, and they try to interpret the tape to find patterns and trends.

There are a few different ways to read the tape. One way is to look at the volume of trading. If the volume is high, it indicates that there is a lot of interest in the stock, and this could be a sign that the price is about to move up. If the volume is low, it indicates that there is not much interest in the stock, and this could be a sign that the price is about to move down.

Another way to read the tape is to look at the price movements. If the price is moving up in a series of small steps, it indicates that there is a lot of support for the stock, and this could be a sign that the price is about to continue to move up. If the price is moving down in a series of small steps, it indicates that there is a lot of resistance for the stock, and this could be a sign that the price is about to continue to move down.

Tape reading can be a difficult skill to learn, but it can be a very effective way to make money in the stock market. If you are interested in learning more about tape reading, there are a number of resources available online and in libraries.

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