Foreword
Do you know what the Time & Sales is? Time & Sales is always an indispensable tool while day trading. Knowing how to utilize it will increase the winning percentage when you are day trading. In this article, I will walk you through what it is, how to read it, and show you how to use it.
(TradeZero Pro Platform is used to illustrate the tape for this article.)
What is Time & Sales (Tape)?
Time & Sales is the record list of all filled orders in the market. Information of orders are listed on the tape, for example, order time, size, price, etc.
Color of orders could be customize in the setting.
Personal preference:
Green : Order with the price that goes through higher than the ask
Red : Order with the price that goes through lower than the bid
Time & Sales Record = Stock Price On Charts?
You may probably be curious about how the stock price is recorded in charts. As previously mentioned, the Time & Sales is a record list that shows all recently filled orders in the market. These recently filled orders in the Time& Sales will be computed by computers, and they will give out a stock price base on the price of the most recent trade. The stock price is then plotted over time in a chart
Why sometimes the stock price spikes and drop back in a second?
Sometimes, you may see the stock price spikes in a second and drop back to its original price. This happens when an order is filled with an order price much higher than the current stock price. The Time& Sales records the transaction and sends it to those trading systems. The stock price is then computed and plotted on a chart with a higher price. It drops afterward when another order is filled with a lower order price / original stock price.
How to use Time & Sales?
When we are jumping into the market on an apex point, we could confirm whether the breakout would occur or not when many buy orders are going through before or at that price.
Apart from that, a big sell-off could be predicted when the Time & Sales are all in Red.
(Usually, the price will drop instantly when the Tape is all in red.)
If you want to find out more about breakout or sell-off confirmation with the tape, here is an article and a video produced by Ross Cameron, a professional day trader. He explains how it works in the video and the article.
Final thought
Making good use of the Time & Sales would ensure you become an experienced and consistently profitable day trader.
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