Tape Reading & Stock Trading (part 2)

By proper mental qualifications we do not mean the mere ability to take a trading loss, define the trend, or to execute some other move characteristic of the professional trader. I refer to the active or dormant qualities in his make-up.

For example: The power to force himself into the right mental attitude before trading; to control his emotions: fear, anxiety, elation, recklessness; and to train his mind into obedience so that it recognizes but one master - the tape. These qualities are as vital as natural ability, or what is called the sixth sense in trading. Some people are born musicians, others seemingly void of musical taste, develop themselves until they become virtuosos.

It is the WILL, the strength of discipline and character in a man or woman which makes them a mediocre or successful at trading, "a loser" or "a winner."

Jacob Field is another exponent of tape reading. Those who knew "Jakey" when he began his Wall Street trading career, noted his ability to read the tape and follow the trend. His talent for trading was doubtless born in him; time and experience have proven and intensified it. Whatever awards James R. Keene won as operator or syndicate manager, do not detract from his reputation as a tape reader as well.

His scrutiny of the tape was so intense that he appeared to be in a trance while his mental processes were being worked out. He seemed to analyze prices, volumes and fluctuations down to the finest imaginable point. It was then his practice to telephone to the floor of the stock trading exchange to ascertain the character of the buying or selling and with this auxiliary information complete his judgment and make his trading commitments. At his death Mr. Keene stood on the pinnacle of fame as a tape reader, his daily presence at the ticker hearing testimony that the work paid and paid well.

You might be urged to say: "Yes, but these are rare examples. The average man or woman never makes a success of day trading by reading moment by moment transactions of the market." Right you are! The average man or woman seldom makes a success of anything! That is true of trading stocks, business endeavors or even hobbies!

Success in trading usually results from years of painstaking effort and absolute concentration upon the subject. It requires the devotion of one's whole time and attention to - the tape. He should have no other business or profession. "A man cannot serve two masters," and the tape is a tyrant.

One cannot become a tape reader by giving the ticker absent treatment; nor by running into his broker's office after lunch, or seeing "how the trading market closed" from his evening newspaper.

He cannot study this art from the far end of a telephone wire. He should spend twenty-seven hours a week or more at a trading ticker, and many more hours away from it studying his mistakes and finding the "why" of his losses.

If tape reading were an exact science, one would simply have to assemble the factors, carry out the operations indicated, and find themselves trading accordingly. But the factors influencing the market are infinite in their number and character, as well as in their effect upon the trading market, and to attempt the construction of a tape reading formula would seem to be futile.