Don Bright of Bright Trading
Since you asked...Confused about some aspect of trading? Professional trader Don Bright of Bright Trading, an equity trading corporation, answers a few of your questions.
READING THE TAPE
You often mention "reading the tape" in your articles. What do you mean by that? Please explain. Also, what trading software do you recommend? Thanks for your help.
- Moses Mannaa, via e-mail
Reading the tape is probably the single most important talent traders
can develop. Each trader has a dedicated ticker that shows every trade
on each individual stock (one tape for each security). After you know the
players and the things to look for on the tape, you can successfully identify
short sellers (extremely valuable!), institutional buying, company buyback
programs, and so on. This is a learned talent that floor traders have used
for decades.
Now, about software. I try not to recommend any specific software program in this column. Truthfully, if you have paid your exchange fees (which gives you access to real real-time quotes) and have any one of a dozen programs, you should be fine. People tend to put too much value on the various programs out there when many are virtually identical. A new Ford or a new Chevy? It makes little difference. The most successful traders never use most of the available bells and whistles.
ONLINE TRADING
Where can I find the laws that govern online trading? Thanks.
- Alex M. Chen, via e-mailIf you are asking about trading online as a retail customer of a brokerage firm, then you should discuss the rules outlined in your contract with your broker. Retail traders are limited in what they can and cannot do by the brokerage firm they use, as well as by their market access.
... Continued in the July 2001 issue of Technical Analysis of STOCKS & COMMODITIES magazine.
Don Bright is a principal with Bright Trading (www.stocktrading.com), a professional equity trading corporation with offices around the United States. E-mail your questions for Bright to Editor@traders.com, with the subject line directed to "Don Bright Question."
Excerpted from an article originally published in the July 2001 issue of Technical Analysis of STOCKS & COMMODITIES magazine. All rights reserved. © Copyright 2001, Technical Analysis, Inc.
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