Many good traders lose money because of tape-reading incompetence. After all, the markets are little more than a set of numbers and their rate of change over time. Watching how these numbers interact offers traders a precise method for short-term prediction. It works because the flow of the tape reveals the crowd's intentions.

Technical analysis alone won't make you a profitable trader. You still need to learn the fine art of reading the tape. That could be a shock after all of the time you've spent studying the charts and probing the indicators. Of course you can continue to trade without the tape, but you do so at your own risk.

Charts often paint pretty pictures that trigger perfectly wrong signals, but the tape never lies. This goes back to the old admonition to trade what you see, not what you believe. Once you learn how to read the tape, it becomes much harder to get fooled by the whipsaws that are tossing other traders around.

The bottom line is that price and volume provide most of the information needed to play the markets successfully. The flow of buying and selling pressure reveals forces that remain hidden on the charts and in the news flow. It reflects the real activities of market players, as opposed to the smoke and mirrors being offered to the public.

Mastering the ticker tape is tough, because there's no definitive book or formula on the subject. It can only be learned through long periods of personal observation. But once you develop your tape-reading skills, you'll have a lifetime advantage over other traders, because you're accessing the hidden pulse of the markets.

Here are 15 tricks to learning the secrets of the ticker tape.

1. Start your education by memorizing key levels on your favorite charts. Then watch the tape closely when price approaches these pivot points. Record your observations and see if you can predict reversals before the crowd does.

2. Most tape signals help you anticipate the unexpected. For example, a bull trap is set when volume dries up for no reason after a breakout. The tape reader has the advantage, because this occurs long before a reversal shows up on the chart.

3. Study the tape with one eye on the clock, because swings tend to occur in predictable cycles. For example, watch for the "third bar reversal" about 11 minutes into the new day. Follow the tape in whatever direction price moves at the open, then see if momentum fades at the critical time.

4. Interpret the crowd's excitement level with an average volume reading next to the real-time volume on your watch list. Look for stocks that trade well above their average volume, because this is where the real action will be for the day.

5. Look for divergences between market sentiment and the tape flow. Are interested buyers holding up prices in the middle of a broad selloff? Or do the rally fires fizzle when everything else is moving higher?

6. Ask if price action matches your expectations. Look for buyers at breakout levels and sellers at breakdown levels. When they don't show up, stand aside or fade the move. Don't be patient. Contrarians step in immediately when the crowd doesn't appear at price pivots.

7. Market makers and specialists use knowledge of the order book to move markets in whatever direction yields the greatest volume. They routinely manipulate crowd emotions against order flow to shake weak hands out of positions.

8. Use Nasdaq Level II as a contrary indicator. Its purpose is to fool the public into making bad decisions. The best feedback from this tool comes when you see a few shares hold a market up or down for extended periods. It means someone important is hiding a large order.

9. Ignore the players who are lined up on either side of the spread, and track only the depth of their interest through many tiers. Pay attention to whoever steps in to fill the gap when the spread opens more than a few cents. That's the highly motivated player who will most likely move the market.

10. Get out of the way when NYSE specialists show big size on one side of the market. They intend to push price through many tiers until their orders gets filled. Alternatively, scalpers can trade with size until it works out of the system.

11. Use the opening price principle. The opening tick on the SP 500 futures remains a pivot number through the entire session. Draw a line across it to remind yourself where it is. Then use opening price breakouts, breakdowns and reversals as trading signals.

12. Closely watch the relationship between current price and the daily range. A stock that holds high within its range has hidden strength, while a stock that holds low has hidden weakness.

13. Interpreting the bid/ask spread requires a different skill-set than reading price. Keep in mind that most spread movement is pure noise. Watch for those few times when the spread widens and price surges farther on fewer shares. That's where directional signals will appear.

14. Follow the professionals in quiet times and the public in wild times. Insiders push price in the direction that sets up their accounts for the most gain, but they lose control of the tape when the public enters the market in force.

15. Keep one eye on market breadth and exchange tick, and the other on the ticker tape. Interrelationships between these forces generate convergence and divergence that predict market direction.