Ross When you get into a trade, what are you focusing on I focus on two things I focus on the level two and I focus on the time and sales because I am a tape reader. Here's the problem with focusing just on charts. By the time you see something on a chart, it has already happened. it's already over.

Charts are historical price action, even a one minute chart. So I think of it like this when I'm driving a car I Don't stare in the rear view mirror I look at the road ahead and that's the level two in the time and sales that shows me the ERS currently lined up and that gives me a good indication of where this stock is going. But I check my mirrors because I want to be able to have context of what has just happened and what other people are going to think of it. So if we see a big topping tail, a shooting star, I recognize visually, that's going to be considered a reversal indicator, but it'll be on the level two and the tape that I actually see the reversal starting to happen and that's where I execute my trades.

When I started day trading I didn't intend to be a tape reader, it just sort of evolved for me. But being really good at reading the tape is both a blessing and a curse because one of the things that you'll sometimes notice is when you look at a chart, you'll be like wow, that was such a clean chart. It's like green candle green candle green candle. and then you know you have the red candle and I'll sometimes think wow I should have held that so much longer.

Why did I sell as soon as I did? And this is the problem with being so focused on the tape. when you're so hyperfocused on every order, you know that's on the book and the way these orders are moving around and the spread you can get faked out. So I approached trading when I first got started and and once I started to kind of get my rhythm. it was about hitting base hits.

you know base hit, base hit base hit and using level two helped me better visualize as volume was coming in that we were likely to get a breakout. So what does that mean? Well let's say I see a stock approaching $50 a share and it comes up to $49.90 It sort of TAPS that level. it then pulls back, it comes back up again it pulls back I'm starting to see on the level two the orders that are sitting at $49.90 or at $50 a share. you see them in a way that's different than charts on a chart.

You see the candles but you don't see the orders. So what I look at then is if the stock starts to, if the price starts to squeeze up and we're seeing lots of green on the tape I think this is going to break that $50 level and I press the buy button sometimes to anticipate that breakout. Now if I was relying just on charts I wouldn't be buying until we actually break that level or I might wait for the break and then wait for the retest. but then I missed that whole first leg and so if it breaks 50 and goes right to 51 in an instant, that's a dollar a share.

and I'm telling you I see this again and again and again. So the better you are at reading the tape, the better. You can capture these little opportunities, but you will have times where you end up getting faked out. you know it comes up to 51 or whatever the case is and you see a really big seller and then you think oh man, I got to get out and you get out.

it drops down a little bit, it comes back up and then the seller gets bought up and it keeps going higher. and then when you look back at the chart all you see are you know, three four green candles in a row and you're like why did I sell there and it's because using the tape really go goes hand inand with being a base hit Trader or being a scalp Trader taking really quick trades, getting in at a half dollar, getting out, getting in at a whole dollar, getting back out and for a lot of beginner Traders This is a great way of building consistency because it's a lot easier to predict what a stock is going to do over the next five minutes or over the next minute than over the next 30 40 minutes, hours, or two hours or or certainly days. So the more you're zoomed in on on very short time frames, the easier it is to get faked out again. I Think for me because I built my career.

my Foundation is on hitting base hits on very short time frames. it just, you know, kind of like it just molded me into being a tape reader. now because a lot of tape readers are very fast Traders and very aggressive traders in a hot Market They can certainly do very well, but it's important to know that their biggest weakness and this is true for me, is that losses can outsize winners. So you can have a negative profit loss ratio because you're taking lots of small little base hit trades.

But inevitably, you'll have that trade where you get in at 49 90 it goes to 50 and then it flushes and you get that jack knife move where it pops up and drops right back down. And so one of the things I've learned is that tape reading is a lot more difficult on certain types of stocks. Trying to do trying to read the tape on an indic like the S&P 500 trying to read the tape on Commodities like natural gas or gold trying to read the tape on a large cap stock like Apple or Tesla it is very difficult. Why is that? Well, there's a couple reasons.

Those are markets where you have a lot of algorithmic uh, trading systems that are competing against each other trying to cut in front of each other. You know, fake people out do all these different types of things and that creates more Just chop General chop. You also have instit institutional Traders moving in and out of their their positions and that creates big flushes and big pops which are not as a result of technical analysis but just simply because someone said hey, sell 50,000 shares and boom they put the order through. So I have found that tape reading consistently works better on the right type of stock to trade.

What's the right type of stock to trade it's going to be be a stock that number one is up at least 10% Number Two typically is priced between 2 and 20. Number three has five times relative volume or higher. Number Four has a news Catalyst Number Five has a float of under 20 million shares. These are the stocks where we see really big moves and these are the stocks where even a base hit can be 5, 8, 10% and there's a lot more opportunity for profit.

And it's a spot where I find tape reading to really Excel So Reading the tape on small caps for me is really the sweet spot But I'll also say that if you're trying to read the tape on a stock that has no volume regardless of relative volume, just no volume. period. Well, there's nothing to read right? The car is not moving, so we need the car moving. we need to see volume in order to start reading the tape.

and I find that when I'm really dialed in I feel like I'm in a flow state I'm just I'm seeing the dip. I'm pressing the buy button, it popping, it's popping back up I'm taking profit. then I'm adding on a micro pullback for a breakout and it's like it all just starts happening. So what I encourage you to do if you want to try to become a tape reader and get better at this, is just keep practicing every single day that you're practicing reading the tape by trading, even if it's in a simulator, you're gaining experience and that experience is what creates educated intuition.

So keep sticking with it.