In freely traded markets, buyers and sellers meet in the marketplace and post bids and offers. These indications to buy or sell are continuously modified and updated to establish a common value for the instrument.

A common method of attempting to gauge the strength of this activity is to watch time and sales prints as trades are posted. This method of visual analysis has traditionally been known as tape reading.

However, this decision-making approach is extremely subjective. Also, if you step away from the screen and stop viewing market activity, you will lose your frame of reference and need time to get back up to speed. Traders would benefit from an alternative method that quantifies this kind of visual knowledge process.