Tape Reading
Tape reading is an old technique that day traders used to analyze the price and volume of a given stock. From roughly the 1860s through the 1960s, stock prices were transmitted over telegraph lines on ticker tape that included a ticker symbol, price, and volume. These technologies were phased out in the 1960s with the rise of personal computers and electronic communication networks (ECNs).
Definition: Tape reading is an old technique used by day traders to analyze the price and volume of a given stock. It involves observing changes in stock codes, prices, and volumes to make trading decisions.
Origin: Tape reading technology began to be used around 1860, when stock prices were transmitted via telegraph lines and recorded on tapes. Over time, this technology was replaced by personal computers and electronic communication networks (ECNs) in the 1960s.
Categories and Characteristics: Tape reading is mainly divided into two categories: manual tape reading and automatic tape reading. Manual tape reading requires traders to personally observe and record data, suitable for early trading environments. Automatic tape reading uses mechanical devices or early computer systems to record and analyze data, which is more efficient. The advantage of manual tape reading is its high flexibility, but it is prone to errors; automatic tape reading is more accurate but relies on the stability of the equipment.
Specific Cases: 1. In the late 19th century, traders at the New York Stock Exchange used tape reading technology to analyze stock price fluctuations and make buy and sell decisions. 2. In the early 20th century, traders at the London Stock Exchange also used similar technology to judge market trends by observing data on tapes.
Common Questions: 1. Is tape reading technology still applicable? Answer: With the development of modern technology, tape reading has been replaced by more advanced electronic trading systems. 2. What are the main disadvantages of tape reading? Answer: The main disadvantages are slow data transmission, prone to errors, and requiring a lot of manpower.
