Finschool By 5paisa

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Day traders employed the antiquated method of tape reading to look at the worth and volume of a specific asset. Stock prices were communicated over telegraph lines on ticker tape that included a ticker symbol, price, and volume from round the 1860s through the 1960s. thanks to the event of private computers and transmission networks within the 1960s, these technologies were phased out (ECNs).

Using ticker tape, the ticker symbol, price, and volume of a stock were transmitted across telegraph lines.

Even though tape reading became less popular within the 1960s, electronic traders now employ comparable tactics and often use many of the identical words.

Modern tape reading involves examining electronic order books to see the potential direction of a stock price. These order books include non-executed deals, unlike stock tickers, which offers a greater amount of knowledge into the market at any given time. as an example, a trader may notice from the order book of a security that there are numerous significant limits sell orders at a selected index. this might mean that at these levels, the stock will face severe resistance. In contrast, if there are sizable limit buy orders placed below the going rate, this might suggest strong support at a specific price point and offer a trader the reassurance to shop for knowing there’s a floor.

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