Do you guys rely on the business channels such as CNBC and others for trade ideas ?
- Thread starter etradeqeko
- Start date
Practically, all information is already reflected in the stockcharts. When insiders sell or buy their companies shares, it takes 3 days before it gets reported to the SEC. Chasing after it is old news! When they release news to the retail investors and traders, the big money investors and hedge funds have long taken up positions in the stockmarket. Big money investors and hedge funds are the market. Retail investors and traders do not have enough monies to move any stock for that matter!
Hi Smallfil,
Do charts also contain the information when big investors and insiders buy or sell ? Or are these transactions done outside the exchanges and directly between investors such that the info is not reflected on the charts.
Thank you
There is the so called dark pools that do not appear during the day and added later on. Not sure how that works to be honest. I would hazard a guess that those trades would be added to the volume transacted for that day. Look at the volume spikes when a stock breaks out of a trading range and goes higher. Who is buying at those levels which price wise is higher? Retail investors and traders even if you add up their total monies will never match the deep pockets of the big investors and hedge funds! As retail investors and traders, we do not have the hundreds of millions to drive share prices higher!
All stocks go thru Phases. Phase 1 (Accumulation), Phase 2 (Mark Up), Phase 3 (Distribution) then, Phase 4 (Mark Down) then, Phase 1 starts over. Now as to your question where do the big investors, hedge funds, big traders buying? Common sense will tell you it is in Phase 1 (Accumulation) when share prices have bottomed out after a decline and now prices are going sideways. This is a sweet spot because prices are very cheap, it is in a trading range so, prices will not run up right away. So, they can buy slowly and establish their positions. Buying millions of dollars shares cannot be done all at once otherwise, the price will spike and make the share prices very expensive in short order. Big investors can still be buying in Phase 2 because prices are still relatively, cheap and the buying will encourage retail investors and traders to jump in and buy shares when they see it starting to move higher. Phase 3 is the market top where it stops going higher but, moves sideways. Exercise caution because big investors and traders will be selling their shares and cashing out their profits. Next is the Phase 4 or Mark Down. You do not want to be in this Phase 4 buying because the stock price is now on a price decline. Time to short it!
Thank you Smallfil. Do these concepts apply Futures as well ? Or only to stocks .
Do futures contracts happen outside exchange and if yes, Will such outside one's impact exchange in the way outside stick transactions impact stock exchange ?
I never use any business channel. They are only reporting what my charts already printed, plus stuff that may never happen, plus some half-baked or overheard theory as to why prices went this way or that way.
The only input any newsflow has into my trading might be working out if I should stay in cash around central bank interest rate announcements, NFPR's etc. These can generate enough volatility that even if you have the eventual direction right, price oscillations hit all stops.
The only input any newsflow has into my trading might be working out if I should stay in cash around central bank interest rate announcements, NFPR's etc. These can generate enough volatility that even if you have the eventual direction right, price oscillations hit all stops.
It's entertaining to listen to the heads on CNBC explain the movement on any given day. If we're going up they will say "there's just so much confidence right now and X sector is storming ahead...so bullish for stocks...heading up from here". Retailers will buy that.
The next day we are down... "No reason to put capital to work here as fear reigns over X issue and investors should seek safe havens. So much to be concerned about, there's this thing and that thing and maybe all these other things." Retailers sell that.
And the next day we are storming up again...
The next day we are down... "No reason to put capital to work here as fear reigns over X issue and investors should seek safe havens. So much to be concerned about, there's this thing and that thing and maybe all these other things." Retailers sell that.
And the next day we are storming up again...
It would probably, apply to futures as well as commodities have charts too don't they? I do not trade futures because the leverage is very large and trading futures is very risky for retail traders. Not sure if they have options on futures. If that is the case, it may be better to trade the options. The huge leverage on futures can wipe out your account! Stock options by comparison, there is leverage but, your risk is limited to the cost of the premium you paid and not a penny more! If you are wrong, you can also, get out and save the residual value of your option for the next trade.