Stock falls on profit taking?

deaddog said:
That's what moves price, supply and demand. Yet there is a whole industry built around telling a story because investors want to know why?

Imagine a CNBC talking head coming out and saying that the price of this companies stock fell today because no one wanted to buy at yesterdays price and if you wanted to sell you had to offer a lower price to find a buyer.
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Generally, financial media is absolute shit except in providing quick access to information. Explaining why something happened is not in their forte so don't look to them for answers.

Knowing why something is happening is an informed insight that can be a trading opportunity. The people who typically attempt to analyze the situation to find the insight are typically referred to as professional investors, and it's pretty clear that the quality of their skill is not much better than average. Though the top firms maintain a significant advantage over others.

A pattern you might recognize is that those top firms tend to hire people with econometric, sell-side, or research backgrounds. That gives you clues as to what sorts of analytical methods would be required in order to extract an edge from information. Long story short, don't rely on financial media to give you many true insights -- just use them for information.

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As for me stock falls not only on profit taking. Firstly some people start taking profit, and after that greed influences on others, they are afraid of falling price.
So taking profit looks like first snowflake.
 
all hedge funds underperform the market because they hire these educated eggheads. We know that a education causes you to become too scared to trade.

A high school dropout swinging nikkei futures at night will do much better than those informed investors.

longandshort said:
Generally, financial media is absolute shit except in providing quick access to information. Explaining why something happened is not in their forte so don't look to them for answers.

Knowing why something is happening is an informed insight that can be a trading opportunity. The people who typically attempt to analyze the situation to find the insight are typically referred to as professional investors, and it's pretty clear that the quality of their skill is not much better than average. Though the top firms maintain a significant advantage over others.

A pattern you might recognize is that those top firms tend to hire people with econometric, sell-side, or research backgrounds. That gives you clues as to what sorts of analytical methods would be required in order to extract an edge from information. Long story short, don't rely on financial media to give you many true insights -- just use them for information.

Equity Financial Analyst - US Career (point72.com)
Careers - Workday (myworkdayjobs.com)
Intern, Macro Analyst (myworkdayjobs.com)
Global Equities, Investment Associate - Citadel
More...
 
How come no one seldom says market rose on profit taking? You bet I sell short/hedged in swing trading along with long swing stocks.

Volume over lack of volume pushes stocks one direction or another, then the story comes out after the fact, but automation don't need stories.

Trader picks wrong direction, learn to hedge.

Trading 10k is far easier to make 300% with good trader, so so much harder with couple hundred million.
 
longandshort said:
A pattern you might recognize is that those top firms tend to hire people with econometric, sell-side, or research backgrounds. That gives you clues as to what sorts of analytical methods would be required in order to extract an edge from information. Long story short, don't rely on financial media to give you many true insights -- just use them for information.
More...
One of the reasons I don't spend a lot of time on economics and fundamentals is because I can't possibly compete with the institutions who hire the best people and have untold dollars to spend on research. Once the institutions decide to act on their research then maybe I can follow along and pick up a few of those profits they are taking.
 
Japan has some very rich younger bedroom traders that started with small accts.

In Sweden there is a retail equity trader closing in on $100M having taken a $30k acct up that high in about 9 years with a long term avg win rate of 25-30%.
 
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deaddog said:
One of the reasons I don't spend a lot of time on economics and fundamentals is because I can't possibly compete with the institutions who hire the best people and have untold dollars to spend on research. Once the institutions decide to act on their research then maybe I can follow along and pick up a few of those profits they are taking.
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Most trades aren't happening in lit exchanges so whatever you are seeing on the chart of volume is lagging. For retail traders, it means not using price as your thesis unless you're trading momentum, in which case it's all about the slope of change (and needs to be managed very actively).
 
longandshort said:
Most trades aren't happening in lit exchanges so whatever you are seeing on the chart of volume is lagging. For retail traders, it means not using price as your thesis unless you're trading momentum, in which case it's all about the slope of change (and needs to be managed very actively).
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I agree that what I'm seeing is lagging. But then isn't all the information you gather. I suppose if you do enough research to know what other traders don't, (I assume that's what the institutions spend their money on) you could have a leading indicator. As an institution, how are you going to capitalize on that information. You have to buy or sell the underlying security. That's hard to hide. Not only from retail traders but from other institutions. Price moving on volume shows up on a chart.

I suppose that by trading price direction I'm trading momentum. Buy a stock that's rising in price and hold it until it stops rising.

Shouldn't all trading accounts be managed very actively?
 
Well right now you’re just guessing that an increase in volume is an institution. How good are your guesses? Probably about 50%. Maybe less. ‍♂️
 
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