tape reading:

- entry or exit in Volume spike at ToS
- every new low confirms the continuation of the trend and should be shorted
- every new high confirms the continuation of the trend and should be longed
- trading is about the trend, traders getting killed by trying to pick the tops or bottoms

- in trending, buy high and sell higher, or sell low and buy lower
- within the range, buy low and sell high ... but as soon as the range is broken, switch to trend trading


- capitulation: fast selling on sharply increased volume which usually indicates the end of selling and offers a reasonable expectation of reverse -- still need to see the bounce attempts

- A relatively big volume increase on the price advance with shallow volume on the reaction indiates a continuing uptrend

- Volume drying up on a short-lived rally indicates a continuing downtrend

- don't know how far the trend will go, take profit at table

- faster first and then exhausted selling into a support is a reason to bid it with tight stop!


After trend, market could be stuck in a range:
this range trade didn't allow much for conviction on direction bias until see some clues --- like:
1 Are highs higher or lows lower for the moves within this range?
2 is the volume increasong or decreasing on advances or retreats

Confidence levels

if you are feeling confused or in a down period, taking full profits to get used to the felling of profits is better, and if you are feeling well, scaling out is better because the stock is moving in your direction and you want to stay with your confidence.

in my own words, when confidence is low, take every bit of profit as I can.


Three important things we use every day, even if we don't understand why:

1 technical analysis helps to define the structure
2 tape-reading principles help to define the entry and exit points (price/volume relationships)
3 Exit strategies help to pull us through flat or negative periods and move better during positive periods