Tape Reading and Market Tactics | By Humphrey B. Neill

BOOK REVIEW

By Cam R

Title: Tape Reading and Market Tactics

Author: Humphrey B. Neill

While going through all the books that are supposedly about tape reading, and there are not very many unfortunately, I happen to come across Tape Reading and Market Tactics by Humphrey Neill. I count myself pretty fortunate to have read this book immediately after reading Studies in Tape Reading by Wyckoff, and in my mind, these are probably the two books you will ever need if you are interested in studying tape reading. Why is that so? Read below to find out.

Packaging - 4/5 (Paperback)

Around B5 size, the book is sturdy and feels pretty heavy for a paperback. It’s likely due to the paper used, which is pretty thick and will definitely hold up well even under constant usage. The cover design is old-school, but pleasant enough. I liked it actually, it looks like a textbook on tape reading, which it pretty much is in a way.

Writing Style - 3/5

Neill traded back in the 1920s, in the same time period as Jesse Livermore, so the writing is of that time period. It is slightly old-school English, but Neill has a gift of explaining things in a simple and easy to grasp manner. No problems here.

Trading Methods (Specifics) - 4/5

He sets out to explain the art of tape reading, and does it in a very systematic way. He explains what speculation is, what tape reading is, and then proceeds to explain exactly how to read the tape with examples. The teachings are clear and he supplements it with appropriate examples to explain the concepts he is getting across.

Here is an example of how he explains the turning points on heavy volume:

“Heavy volume at the end of a move is especially important, inasmuch as it generally indicates a turning-point in the market. In this situation, on the upwards side, we have volume during the advance with continued, increasing activity of transactions at the top without stocks’ making further headway. In other words, our buyer wants more stock and continues to enter order after order; meanwhile, our seller, who previously would sell only on advancing prices, now offers for sale great quantities of stock. For a time there is a tug of war between buyers and sellers, but this extreme activity near and at the top is indicative of a substantial reaction to follow.”

Neill also goes on to explain supports and resistances, as well as the various types of market and their characteristics.

Trading Management (Soft Skills) - 4/5

I like how he gets across the importance of deducing supply and demand from reading the tape, and not letting non-essential stuff cloud the mind.

A snippet of his words.

“The ticker tape is simply a record of human nature passing in review. It is a record giving us the opinions and hopes of thousands of people. We must dismiss from our minds all other facts. Precious few know, or can hope to know, who is buying or selling. We hear that So-and-So is buying; he may also be selling, through another broker. If he wants us to know that he is buying, we should be chary. So, let us disregard hunches and wild conjectures. If he buys and sells, the record of his transactions will be on the tape. We must make our interpretation from the record. So long as we continue to guess who is doing the buying and selling, we shall remain in a sea of confusion. The person who is privileged to know who is buying, does not need the ticker tape.”

And I really like how he explains what the tape actually shows.
A short snippet again below.

“In all that I shall have to say, I warn you that I see on the tape only the results of buyers’ and sellers’ transactions in stocks; mine are not eyes that perceive the occult signs of movements of J.P.Morgan and Company or short sales executed by Jesse Livermore. Mr. Livermore may be buying, or selling; but if the stock advances, and I am “long”, I shall be content.

Inasmuch as I am not well acquainted with any member of J.P. Morgan and Company, or with Mr. Livermore, I am quite certain that they are not interested in me as an individual. However, they are interested in me collectively. Here is what I am driving at: the individual trader tries to find out what some important operator is doing, but he never stops to think that that operator must tell from the action of the stock he is operating in what the public, of which the individual trader is a member, is doing.”

Trading Psychology (Mindset) - 3/5

He does devote a section to what he terms human nature and speculation. Here is what he terms market-poise.

“Market-poise is the result of a sense of mental well-being – confidence in the outcome of a speculative venture which has been entered into calmly, thoughtfully, and deliberately. If it should not work out profitably, as planned, and it is necessary to accept  a small loss, this would not upset us, in as much as we should realize that we had applied our best judgement to the problem. We should appreciate that it is impossible to judge every market commitment correctly. Market-poise is engendered by judgement, rather than by guess-work; by conservatism instead of rash chance-taking; by the willingness to remain on the sidelines when the issues between buyers and sellers is beclouded, rather than by feverishly demanding action at all course.”

Longevity - 3/5

As a guide, or textbook if you will, this is one of the books to go back to when you need refreshing of the basics.

Value - 4/5

For anyone interested in learning the art of tape reading, this is really one book you must read. There are a lot of strange, and frankly nonsensical, notions on trading the market. But thankfully, this book is not one of them. The author must have been a trader, and the concepts of tape reading that he puts across are sensible, logical, and along the lines of what has been also said in Reminiscences of a Stock Operator. It’s less than $10 for a new book, and contains more value than most of the books on tape-reading.

Things to Watch Out For -

The examples of stocks that he cites are dated due to the fact that it’s published during the 1920s, so it’s something to keep in mind while reading the book.

Overall - 4/5

An excellent book on learning how to read the tape. It’s not an easy read for sure, since you probably need to read, think and then assimilate what he has explained about tape reading. But for the core concepts, this book is pretty much a fantastic introduction.

Score Recap:

Packaging - 4/5

Writing Style - 3/5

Trading Methods (Specifics) - 4/5

Trading Management (Soft Skills) - 4/5

Trading Psychology (Mindset) - 3/5

Longevity -3/5

Value - 4/5

Overall - 4/5

Where to Buy:

If you found the above review helpful and want to buy the book, please do consider buying it from my affiliate link below. The prices are competitive, and any purchase goes a long way in supporting this site. Thank you!

       

Related Books
If you are interested in the art of tape reading, be sure to also check out Studies in Tape Reading by Richard Wyckoff. It is also an excellent guide on the art of tape-reading. (Review Here)


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