Tape Speed: Measuring Market Velocity
It's 9:30 AM on a volatile futures session. Your algorithm just executed a scalp at the exact moment the tape showed a surge in aggressive buying volume...
It's 9:30 AM on a volatile futures session. Your algorithm just executed a scalp at the exact moment the tape showed a surge in aggressive buying volume, capturing 12 ticks before the market reversed. Meanwhile, manual traders are still trying to decipher the charts as the opportunity disappears. Tape Reading is the real-time analysis of trade executions to understand market sentiment and order flow. It involves monitoring the Time & Sales feed to identify buying and selling pressure before price movements fully reflect in charts. This technique dates back to the days of physical ticker tapes but has evolved into digital order book analysis for modern traders. Market Velocity is the rate at which trades occur in relation to volume, indicating the intensity of market activity. It helps traders identify momentum shifts before they become visible on price charts. This metric reveals whether buyers or sellers are dominating the market in real time. Tape Speed is a metric that measures the number of trades or ticks per unit of time, revealing the pace of market activity. It's a key component of tape reading for scalpers seeking to capture micro-movements in fast markets.