there's one common skill that virtually all of our 50 plus professional Traders have they know how to read the tape this is a skill that's rarely taught to Independent Traders but in this video you'll see a great example of how one of our prot Traders use tape reading to find and pounce on a great scalping opportunity I'm Mike Bella Fury and we're a proprietary trading firm in New York City with numerous highly successful Traders almost all of whom started their trading careers with all of us at SMB hope you find this channel to be a
wonderful place for you to learn and grow as a [Music] Trader once you understand the the Catalyst setup and then the trades that you're looking for reading the tape provides a tremendous amount of opportunity to enhance that edge not just in identifying better reasons to get in or your reasons to sell um but by identifying the probabilities as they're constantly shifting within the trade so I'm very excited to do this today um I really hope that that we can get back into a routine of doing these on a weekly basis multiple times a week um
because there's so much value in this and and I know that that people think reading the tape is hard and it doesn't add a lot of value and and you know it's it's something that has a lot of mysticism around it it's just amazing when these opportunities fall into your lap right yeah and it's almost it's almost like eerily obvious and and for me personally when I see stuff on the tape sometimes I'm like it can't be that easy yeah but like it kind of winds up being that easy a lot and probably because of
all the Reps that we get in this stuff and because we've taken the time to dedicate ourselves to it but I'm super excited to get into this example so if you can set the context for for us um you know the Catalyst to setup and then the trade that was presented to you and then we can get into the tape so this is when Peggy in October early October I want to say it was the 10th um it had it was a sub dollar stock that on day one went right up to like 130 it
closed that and then over the next two days uh gapped up held gapped up held uh this one ended up going from 75 cents to $7 this was a day this was a day two trade on it uh honestly I forget what the Catalyst was I wasn't prepared with the Catalyst on this one yeah and that's okay I mean knowing that it's a day two that's important one thing to think about would be potentially as we're talking about Catalyst scoring this a catalyst that you might run into so if it's a catalyst that's a 10
out of 10 positive or like a six out of 10 negative you know like those are vared trades that you look for and it's not the purpose of what we're doing here today because this is about tape but it's just a best practice moving forward and the reason is is because you'll find these catalysts and the value of them shifting so much over time yeah so you'll have we talked about it at the 11: a.m. today you'll have a negative eight out of 10 catalysts or a very neutral catalyst that'll have a ridiculously bullish result
you'll have a very bearish Catalyst that or very bullish Catalyst that will have a neutral to to incredibly bearish result and times um understanding just having a running Narrative of how the market is is interpretating different interpreting different price action is really valuable so yeah I had it I had the setup cat straight in my DRC but three in the tape I I forgot to revie that one yeah so this Tri I actually was one that I was small long and I end up flipping short because of what you saw in the tape uh the
long not really so much the tape but the short that I to was the shorts like the main trade this is I just have like a small long that I no you flip from from being long because of this being a day two to a short based on what you saw on the tape great okay cool I'm excited if you want to learn three real world setups that our professional Traders use including the simple but highly effective setup that we teach all of our new Traders and the setup that turned one of our Traders into
a seven fig big money earner check out the free online trade Workshop that we're currently running this is a 100% free intensive Workshop where you're going to learn more in a couple of hours than from years of online education so don't miss it uh so this one had a strong opening drive from about two to $3 which was um a pretty significant move I on the pullback it was above vwap we coming right into this support that was around 260 so this is where I looked at for a quick long scalp up uh there was
a 269 um bidder which was where I took the trade off of yeah see where I take it on the next pullback all right so I start bidding in some here risking right under this 269 or it was like 265 but had this 269 bidder that was there this was added some more in on the pop so was long long 500 was the most that I took on this scout just because I wasn't the most confident in this one it wasn't something I was willing to put on too much risk on and it's something that
we talked about again in the in the 11 a today and we've talked about more is is you want to adjust your sizing based on your confidence in the in the Catalyst the setup in the trade and so if you're you know even if this is an eight out of 10 if it's really you know on your risk profile for the day right if this is a setup that you're developing you know really an eight is actually like a five right because you're you're kind of toning it down depending on your opportunity set of the
day it doesn't mean you're checking out but it just means you're lowering your personal stop on the day how much you're willing to risk in each trade that's one thing that I felt this past month that I did a lot better compared to previous months was exponential sizing on different setups yeah which was it's crazy how much of a game changer that is when you really score a setup out of it and then put the appropriate risk to it yeah so what are you seeing with the tape here yeah yeah this I'm trying to fast
to the par but what's interesting to me is okay what should be h i look at the chart right so I'm starting with the chart and then I'm drilling down to the tape and I'm looking at the chart and I'm like why is it taking it so long to break out right right like like that reversal off the low it shouldn't take this long to break out 100% And also I mean you see this we had a resistance line right here which is starting to form somewhat of support 275 bitter stepping up into this level
yeah pretty close to yeah you see how big the bit is right here on the H huge huge size there why can't they run it away from there that's it felt like when I was in this long after a while I was like this feels like a little sketchy in the long right like because if that thing drops this thing's dropping right after it well even that they're showing that much size yeah it's almost like the uh it's almost like the smmt example from the other day yeah where they had that like $1.2 million offer
they were making the tape seemed like it was really thick the whole time yeah kept rewarding shorts for every time it kept pulling back pulling back and as soon as they dropped that 1.2 million offer it just went right up into a hall it's it's really interesting right like like we're we're using the price action or the tape in this case as as a narrative vehicle right so like the fact that we had that size why can't it just like run away from that price right that seemed weird yeah it should run it should literally
like like just Sprint away from that price because if you're short you should be so afraid of that that size it's not just afraid of that size like oh man I got to get out of my position but more like okay if they step this thing up at all and they actually are going to keep walking it up this thing's going to go way up but the fact that it doesn't even respond is the most interesting thing I me it went away but they're still holding the 275 level yeah it's not with that amount of
unnecessary size yeah it's almost like they like they like wanted to get it chased up and then yeah they were enticing Longs into it on this one yeah yeah enticing is a good word a good a good descriptive word there because it did feel like they were enticing longs to to to get involved so yep so on this pushup this is where I started scalping out of the long yeah um was it the discomfort in the way that the price action was because I look at the chart and I'm like oh that's you know this
is what you want to see you want to see the long but like when we when we've been watching the tape that just feels sketchier it feels like this is an opportunity to to take some profits versus opportunity to kind of hold for more the the tape was definitely a big part of it for that one but also just like the feel of how slow it was yes when it like this thing with all that size there especially after it started basing over that resistance like I was expecting this thing to start taking off yeah
it just felt like way too it felt like it was taking way too long Y and that little clock going off in your head right yeah yeah um so we had that one and then 15 57 was yeah 57 oh so it looks like we had that little move and then it failed but we don't have a trigger really to get short no well so that's the thing on this is that this this bid right here drops and I never took a short on this because I didn't it wasn't something I was really confident because
yeah it could have dropped but it wasn't some like a top setup that I was really comfortable with but I taken I'll show you like where I take the short but that's that's the point that that I think is really imperative to make sure that we're making is we're just building a narrative out we're not adjusting our position sizing immediately we're not like man that long didn't work I'm hitting it short now I bet it'll work on the short side because we actually don't have the information for that no what we do is what we
have the information for is that didn't feel right to the upside but it doesn't mean it's going to go lower it just you know is information and then we can let that that tape give us more information as we go along and that bidder is interesting but I I would agree with you you don't have enough information to say if this bid drops it's going to go way lower like that's just not it's just not true y so again obviously huge size there drops as soon as it drops this thing comes down with it but
again we didn't have that much information to really take it yeah it just gets more interesting now that's all yeah well after I saw that right there that's what really started to entice me into a short I wanted to wait for it to repop up or show signs of another short because that right there with all that size Dro in was a sign to me that potential short is going to come up but it it's a sign that you could have something it doesn't mean that you can just hit it right there and it'll work
it's a sign that you're going to have something though you know exactly yeah it's like if you were it's I don't know do you ever have you ever gone fishing like with with a bobber oh yeah yeah yeah so like when you're fishing with a bobber when the bobber starts going up and down you don't have something yeah you it's a sign that you might have something but if your bobber starts wiggling at all and you just start reeling it in you're going to lose what you had y but if you're like oh I might
have something here and you kind of approach it with a little bit of of finesse you can walk into something really good so yeah once the bobber goes under then you know you got something then you know you got something yeah um so I was nibbling in some short here on this pop up yep still holding above vwap though so do want to be somewhat cautious but in my eyes as long as it's still under this this candle that happen where that bid drop it's not quite a long and I would still be favoring a
short if it sets up yep it consolidates in this little range for the next like hour but I'm trying to show where it hits 274 it's 274 you see them pop up yeah and rejects right off that pretty hard too you got siid coming over 5,000 9,000 7 [Music] ,000 so on this trade to where I'm adding in I play my stop my mental stop was right above this I want say it was like 76 two cents over two cents over that's it because you know that that level should hold now should hold for sure
and I know also when trading these low floats they like to liquidity hunt you and if you put your stop just even a scent over they'll hit you right out and stuff it down y yeah you get a hunt order for one cent above you'll get stopped out and then it'll come right back down it's happened so many times it's yeah um but they're still holding it above vop which is still something to take note of yep my eyes um I was also short 500 before and then on this down part I was just scalping
some out just to realize some gains through there [Music] um back up to 274 so hold on one second let's let's pause the tape and let's talk about an important concept of what reading the tape is and what it's not right you saw the stuff at 274 mhm and then you saw the attempt at follow through to the downside and that didn't happen reading the tape is not saying 274 is the level I'm not adjusting my position sizing at all because of what I saw in the tape it is not YOLO holding reading the tape
is using the information that's presented to develop a thesis of what could happen in the very short term yeah and then taking action off of that yep well I mean you could see like we had that stuff here but like Alo we holding above view up like we had we had a decently like two or three cent Wick down here too yes but like this level was hold and one thing that I give Dan a lot of credit for is usually when I was trading these things prior I would be getting into my position here
not covering any down here adding back in here but then say that goes over I'm out of it when I could be scalping out this range while keeping a core position up here and it's the difference between trading it as as if the reading the tape was the setup and trading it as if the reading the tape is an element of the trade itself because what you said before is you are trading the entire setup and hoping that you're right on it yeah but if you're moving around in it you're actually just taking the trade
and moving around in that based on the tape itself it's a it's an element of the trade it's not you're not trading the entire setup the setup is still there but you're just taking advantage of the fact that okay it's touching a lot of prices I can wiggle around in this a little bit yeah that's thing like when you can clearly identify a range like this too you might as well be scalping in and out of this it just frees you up from having to feel like I hope I'm right here I really hope I'm
right here yep so again you see that 274 and then you saw 20,000 offer come in 67500 8,000 so there's definitely sellers up in this 274 range yeah and it's a weird price to have sellers at right yeah like they're not showing in the same way it's not like one print is there that won't lift it's just like they're they're kind of hidden yeah there that's to say It's Kind it's kind of like a hidden sellers just waiting in there but this 274 was resistance over here and then resistance here the turn into sport here
so that's why I had that line at 274 there and then the tape also confirmed that price action that was there yeah like yeah when I was in this trade I was just sitting here and I was like 274 like it can't get over 274 at all I was like Hey because we was stuck in this consolidation for so long and I was like d 274 just won't it won't go over it won't go over and again that's information that's telling us there's a resistance level there but but it doesn't mean that it's going to
crack lower yep all it does is it tells us that that okay we can base our risk off of this and we can make trade decisions off of this information moving forward but it doesn't tell us that we can YOLO size or be really aggressive or increase our size or anything like that right there because that's just sort of guessing versus actually trading off of it yeah so on this one we actually get an open lower that kind of flushes down but then kind of got soaked and it comes right back up to 274 what
do you think should happen right there on if that like for me when I was in that one that one was a little uncomfortable like as a little sign of like super uncomfortable yeah like don't size in because it opens up lower than it closed that looks like it's about to flush down and then soaked up so my mind I was saying there's definitely a bunch of shorts who piled in on that thinking that that was the crack which it wasn't so it kind of soaked up so but what should what should happen off of
that for the short no what should happen off of that price action oh oh yeah for this like after that soak happened this thing should get over 274 like there should be very little hesitation right yeah yeah after that so that thing should spray up I agree yeah that that's what's in my mind I'm like making sure that I'm stopping out at 276 right like like that's all I'm thinking about because at that point I'm like this shorts it really should go higher yeah and I need to make sure I'm not going to be being
see it again literally hit 274 so there definitely a hidden seller up there who was protecting that level yeah comes in with 10 10,000 5,000 5,000 the spray happens around here but again yeah you're right after that that candle right there this thing should be spraying up right now I mean it should be 283 285 like like without hesitation like yeah so at 600 added two more after that reject again because that one should have sprayed up it's exactly right it should have sprayed up and it didn't started getting tight up here in this range
too yes and then I was thinking that spray right there on how tight it's starting to get up in this this range yes where do you think this could go if it breaks to the downside I was saying that when I was trading this I was thinking this is such a seems like it's so long enticing in here that if this thing does flush it in my mind was going to be just like any any other of these lowf float big flushes that come down like a one candle that sprays down 25 30 cents yeah
that could happen it could unwind slowly there could be something distinct that changes those are all potential outcomes that occur particularly out of that situation where we had the rebid as aggressively as it was and it's almost like there's there's like this last ditch effort from the buyers right they were like no no no we're not going to let this fall we're going to chase it up and then the sellers were just like thank you I'll keep selling right here and the seller hasn't had to step down but like you know it just feels like
there's like just this there's going to be a move and it's going to be a nasty move and once it starts you don't want to fight it you want to be you want to be on the right side of that train yeah and for a lot of these too I mean if it's one of those slow sort of breakdowns I like to with tape's confirming to scale into those but when it has that flush down candle immediately like you see I'll start to cover in but so tape starts to really speed up but you don't
know you know we can put our position on right especially after that like dip and and and and kind of rebid yeah as soon as that doesn't break higher that's where we put our position on because we don't know how it's going to unwind yeah we just know that oh that 274 seller should have been cleared based on that price action and they couldn't clear them so that's a really really good level and I'll put the trade on and let's see what happens and if it moves fast yeah you need to cover some If It
Moves slow exactly like you said okay now I'm going to scale into this I'm going to size into it as it goes in my favor right you're thinking through these things as they're happening you're not saying this is my position I'm standing right here and I hope it works you're listening to what the tape starts telling you and and and keeps telling you yeah so on this drop right here too I did Cover some cuz on the way felt like it was getting soaked back up again yeah but it again didn't push that much higher
but it felt like it was getting soaked up there again you're using the opportunity yeah that's perfect kep playing the range playing the range yeah I did think that that was the breakdown it's this one but again though on that on this candle here yeah the tape did start to speed up so are all first come in like it looked like that was going to be the candle it did and it wasn't which is why I did cover some because that that felt like that was going to be the pole and it comes back up
then that's just another trap of some shorts right there again every time you get that speed in the tape right you see you see the the time and sales pick up right it's not just the level two on the left it's the time and sales kind of just to the right of that every that's the speed of the tape right because the level two is always going to bounce around a little bit as new participants come in and they can change their offers but the speed of the prints that's that's going to tell you okay
this should start to work but you need to see that speed continue and if it doesn't you have to cover some yeah 100% and that's a little bit of that timing game that that we can play but you know we know that the sellers at 274 so we don't have to be perfect yeah we just know that if we start to see what we think should lead to something and it doesn't we do need to take risk off we do need to take risk down a little bit and then look for something that's a little
more real the speed on the tape is super interesting though that's that's a good factor to pick up on but there you can see it start to pick up pick up yep there you go quick drop yeah thre out some bids there the speed the speed never slowed down it actually sped up too which is very interesting and then the volume coming in as well you see how late the volume isn't coming in though right if you're like the speed of the tape picked up and then the volume didn't pick up until later so if
you're trading it on volume alone versus trading it on the tape you're missing that trade or you're or you're having to take undue risk in that trade yep so I got when this dropped I had some bids out at vop and then I saw a little bit left on then when it cracked out I covered some more just because on the flush down here I see them like a bunch of times especially on something on a daily that's clearly front side is when they on an intraday chart like a one minute chart have like a
strong morning push and then they have these flush downs but they stay above vwap that's like what the real traps are because as a short you're saying oh this is a flush this is a flush as long as they keep it over view up and keep and then they start grinding it higher higher that's like where the real short trap I challenge you to do to think about one thing in this though what's that you had so many checks in your favor because of the time that it couldn't lift above that level that yes I
agree putting the bids above and right around vwap is the right thing to do when we initiated this trade the first time because what if it would have flashed down you would have gotten gotten some that you want and then back up it's just the time and the number of times that it really should have gone higher and it didn't then I almost want to use that as information and not put those bids out right if I have the bids out just pull them yeah yeah or at least not cover full position take off a
fourth like just just something to check out like honestly the Yeah the more time that goes by and the more times that this has gone up and can't break out the smaller my the smaller amount I'm going to cover less and less and less quickly so like maybe I would have covered 30% on that first wash the first time if it would have gotten down there okay you know lifts and can't lift maybe I'll cover 20% this time okay that you know it tried to lift 274 again and couldn't maybe I'll cover 10% this time
and like obviously my finger on the trigger of like I'll hit out faster but that was more and more information and we're not talking about that much but when you extrapolate it over time you're talking about you know improving your pnl by 10% 15% 20% and if you do that consistently because of you've got more information present it takes you out of that default mode and puts you into the I'm just going to let the stock tell me what it wants to do right um so I end up on this after it flush down obviously
all Longs are underwater yeah um and on these I like to use if I once like a flush like that that goes under I'm use vwap as a as a hard stop but then I like trailing these with the EMA yep for most part like htgm right now flushes under view up and then just holds that EMA like very cleanly yeah um but that's the thing that's interesting is why do you think you you like trading it off the EMA I honestly it's just like it's like a a trailing stop to come with you why
do you think that it's a trailing stop what is the EMA telling you about the participants in the stock after a kill candle or crack like that people are selling it pops um yeah but what maybe more specifically like an EMA right so let's talk about what an EMA is really quickly an em really quickly an EMA is essentially a moving average that throws out the further away variables and weights overweights the the closer variables so in this case a moving average based on price so it's discounting more and more the prior things that happened
and and and and counts at higher level the things that are happening right now so the fact that we have that you can use the EMA and lean against that because it's showing what the participants who are involved in the stock right now are thinking about the price action right right so that's why it becomes a good trailing stop not because it's an EMA but because of what the EMA tells you about the way the participants right now are behaving in that stock right I've had a couple of some of my best trades that I
have is after a kill candle riding the EMAs down yep all right anything else you want to cover on this no no I mean it ends up just kind of riding these EMAs all the way down and I was just scalping out the way down yeah that that's basically the whole no I love the tape I love the speed and the way that you used the price action and the speed to cover on the way down when the speed didn't follow through but then also saw we saw a great example of how the speed on
the tape can tell you so much more particularly when combined with with that that hidden seller that was there that seller just wouldn't lift and that was the information so overall I mean I really like this I think you nine out of 10 I think the one thing that would be different and would make this a 10 out of 10 of of how you used the tape in your trade would have been to make that adjustment with with you know this really should have gone higher yeah exactly and it's a tough thing to do to
get out of that default but that default mind set is is can be a huge help at times but in a situation like this it actually takes away from the opportunity that you were offered yeah so that would be the one change that I I really think maybe focusing in on but everything else was very good so so you're an active Trader not doing as well as you want not doing as well as you deserve and you just can't figure out why you can't become profitable no matter how hard you try well let me show
you why this is your competition the traders in this room this room right here is full of elite Traders some of whom are making seven and even eight figures a year in fact our top guys have made nearly 20 million each in net trading profits in a single year let's head to my office so I can share more so you're probably used to seeing videos of lavish Trader Lifestyles trading gurus trading off of a laptop for an hour a day heck maybe even 15 minutes a day and then them relaxing on some secluded beach for
the rest of the day well all I can tell you is that our Traders train like pro athletes they live and breathe the markets and are continually working on their trading skills because at our firm that's what we found it really takes to make it in this game I'm Mike Bella Fury co-founder and managing partner of S&B Capital One of the world's top proprietary trading firms located in Midtown Manhattan and we're always looking for trading talent to hire and develop and not just to trade inh house on our desk but also to trade from their
own home entirely using our firm's capital and we have numer Traders doing just that allowing them to make upwards of seven figures trading the firm's Capital without risking their own money but to even get a shot at something like that you need to have the right training that's why we're doing a new free online presentation in which we share how you can get an interview with SMB to become an in-house a remote Trader trading firm Capital without risking yours and getting access to all of our firm's coaching and resources and the best part you don't
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