Friday, February 27, 2015

022715 MSWeekly - How To Trade Stocks Profitably For Beginners

How To Trade Stocks Profitably For Beginners
Market Participant Groups Form Trendline Patterns
Most individual investors and retail traders do not realize that they have a huge advantage over the professional side of the market. This is due to the constraints, restrictions, rules, and regulations the professional side must comply with on an ongoing basis. It is also due to the fact that 80% of the professionals still do not use Technical Analysis.
Stock charts are the graphical representation of what the Market Participant Groups who use fundamentals understand about a stock and its company at that time.
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There are nine primary Market Participant Groups, and each group buys the stock at a different time during the up, down or sideways price action. Over a year or longer time period different Market Participant Groups will be highly active, or not buying the stock at all. When one or two groups are heavily buying or selling a stock, it is called “controlling the stock price.”  Each group controls price in a specific way, creating easy to identify trendline patterns. When an individual investor or retail trader identifies who is in control they will know how to trade the stock, which trading style and strategy will work best, when to enter the stock, how long to hold the stock, and when to exit the stock.
In the chart example below it is very obvious immediately how precise and consistent the sideways pattern is over time. What is also noticeable are the gaps that follow the sideways pattern.




Sideways price action that is precise like this means that the buyers are dominant. They have a huge amount of capital reserves, buy with a controlled bracketed order that contains price within a narrow range, and eliminates momentum action and volatility. There is also an incremental pattern in the sideways action. Each sideways pattern prior to the gap or run up is nearly equal in time duration.
This is the pattern that giant Buy Side Institutions create, when they use Dark Pool Alternative Trading System ATS platforms to slowly accumulate millions of shares of stock. The more giant funds that buy the stock, the more consistent the Platform pattern will be. Dark Pools are buying in incrementally over time and controlling price during their accumulation phase.
Once the Dark Pools have completed their buying for that price level, it is obvious that High Frequency Traders HFTs automated orders trigger driving price up. High Frequency Traders can also make mistakes, as shown in the middle chart window with the TT Volume Bars extreme red spike which indicates an attempt to sell down the stock during accumulation. Smaller funds always chase HFT action. Often retail traders also chase HFT action too not understanding the Market Participant Group cycle, and how it affects the trend and trendline patterns that form over time.
The stock was under heavy accumulation at the time the HFT triggered order attempted to sell down. Since the giant funds have massive capital bases and a controlled order to buy incrementally, their orders overwhelmed the HFT sell short orders rapidly and the stock continued to move up many months afterwards.
Summary
Learning to identify who is controlling price at any given time reveals a huge amount of information that is not available in retail news, guru recommendations, friends, or co-workers opinions about stock trading.
To be consistently successful individual investors and retail traders must learn and understand the Market Participant Group Cycle, and how that affects the stock trend over time. When this methodology is used, success at investing and trading will improve rapidly and consistently.
Trade Wisely,
Martha Stokes CMT
www.TechniTrader.com


Instructor & Developer of TechniTrader Stock and Option Courses
This weekly stock discussion is sponsored by TechniTrader.com a MetaStock® Partner

©2015 Decisions Unlimited, Inc. dba TechniTrader. All rights reserved.
TechniTrader is also a registered trademark of Decisions Unlimited, Inc.

Disclaimer: All statements are the opinions of TechniTrader, its instructors and/or employees, and are not to be construed as anything more than an opinion. TechniTrader is not a broker or an investment advisor; it is strictly an educational service. There is risk in trading financial assets and derivatives. Due diligence is required for any investment. It should not be assumed that the methods or techniques presented cannot result in losses. Examples presented are for educational purposes only.


Tuesday, February 24, 2015

Top Market Timer looks at First Solar

From the desk of Mark Leibovit:

First Solar was a dramatic and powerful example of the Leibovit Volume Reversal (tm) at work.
A VR was posted on the weekly charts back on January 26, accompanied by a confirming 5/3/3/ Stochastic for those of you play the near-term.

On the daily chart, a series (count them - 5) VRs were formed from January 21 forward, the most recent one was formed on February 20.  VRtrader.com Platinum subscribers 'rang the register' on FSLR following the huge upside gap.

Monday, February 23, 2015

[Video] Top Market Timer Mark Leibovit looks at Fire Eye...

This morning we are looking at the recent trading action in Fire-Eye (FEYE) both on a daily and weekly chart.  Recall, the Leibovit VR is available on a one-month free trial and is presented in three versions:  VR Sequential (shows all VRs), VR Directional (filters out repetitive VRs) and VR 2-day (anticipated follow-through for 2 days following a VR - negative or positive).

On the daily chart, please note the strong correlation with the Positive VRs over the past several months.  As you may remember, I try to tie in a momentum indicator - here a 5/3/3 Stochastic, i.e., a rising stochastic helps confirm a Positive VR where a declining stochastic helps confirm a Negative VR.

A Positive VR was formed on February 11 along with a confirming rising stochastic well ahead of the 27% advance that followed in a matter of six days.  There was one Negative VR formed on January 6th, which we intentionally ignored due to a rising stochastic.

If you flip to the weekly chart, please also note the strong correlation of rising prices following a Positive VR and lower prices following a Negative VR.  The most recent multi-week move was signaled with the January 12th,  Positive VR.




Happy Trading
Jeffrey Gibby
MetaStock Business Development.

Friday, February 20, 2015

022015 MSWeekly – How Use Bollinger Bands®


Add Volume Indicators For Direction Stock Will Move

Bollinger Bands® have been gaining in popularity in the past couple of years. This is no surprise given the changes in the Market Structure and how price behaves with more of the Exchanges, Dark Pool Alternative Trading Systems ATS, Electronic Communication Networks ECNs and other orders now automated.
Bollinger Bands offer a highly visual method of seeing the compression patterns that occur before breakouts of significant magnitude. This indicator also helps those retail traders and individual investors who are still struggling with Spatial Pattern Recognition Skills™ and have trouble recognizing whether at stock is still trending up or down, or if it has shifted sideways.  The sooner a retail trader can identify a sideways shift the better as sideways patterns require different entries, stop losses, and exit strategies.
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It is important to maintain a good ratio on the candlestick stock chart so that the Bollinger Bands are properly displayed. Many times traders attempt to use too many indicator windows on one template layout. Be sure that the height and width ratios are close to the Golden Mean ratios.
Bollinger Bands make it far easier to determine if a Platform is underway, or if it is a wider sideways, or a Trading Range pattern Market Condition.   
Below is a chart example of a stock that had been in a Trading Range pattern over a few months, then had a High Frequency Trader HFT velocity run. The current compression shows nearly perfect horizontal Bollinger Bands on both the upper and lower band, indicating that price is compressing inward equally from highs and lows. This is a powerful price pattern that is often missed by novice retail traders.
The equal compression means that there is equilibrium between buyers and sellers at that moment, which tends to favor the upside after an HFT driven velocity run. Quiet accumulation is underway with Dark Pool buying going on unnoticed for the moment, as shown in the TTQA indicator in the bottom chart window. Dark Pools control price to create these patterns.
Since this first velocity run was triggered by HFTs, the next move up was likely to also be an HFT gain day. The next few days the stock moves up a little higher and compresses again, then HFTs move the stock up a couple of points in one day as shown in the next chart example below.


The entire sideways action after the first HFT velocity run was a period of quiet accumulation with Dark Pools buying on their Alternative Trading Systems ATS, with the general market exchanges unaware of their activity. Once the word gets out, HFTs automated orders drive price upward. There were two entries before the stock moved on HFT price action, and both offered a low risk entry prior to the big run day.
Summary:
To use Bollinger Bands properly you must incorporate Volume indicators. Bollinger Bands is a Price Channel indicator, so the direction the stock will take is not easily evident to most retail traders. By adding Volume indicators a retail trader has a complete set of data, which provides all the necessary information to determine what direction the stock will move out of the compression pattern.
Many retail traders benefit from adding Bollinger Bands with Volume indicators to their trading rules and parameters.  
Trade Wisely,
Martha Stokes CMT
www.TechniTrader.com


Instructor & Developer of TechniTrader Stock and Option Courses
This weekly stock discussion is sponsored by TechniTrader.com a MetaStock® Partner

©2015 Decisions Unlimited, Inc. dba TechniTrader. All rights reserved.
TechniTrader is also a registered trademark of Decisions Unlimited, Inc.

Disclaimer: All statements are the opinions of TechniTrader, its instructors and/or employees, and are not to be construed as anything more than an opinion. TechniTrader is not a broker or an investment advisor; it is strictly an educational service. There is risk in trading financial assets and derivatives. Due diligence is required for any investment. It should not be assumed that the methods or techniques presented cannot result in losses. Examples presented are for educational purposes only.


Tuesday, February 17, 2015

Are Gun Shares on a Comeback?

From the Desk of Top Market Timer Mark Leibovit:

Gun shares on a comeback! Sturm Ruger (RGR) is a classic example of the kind of investment (trading) situation I look.  Here we see a stock that has decline from the mid 80s to the mid 30s accompanied by negative press regarding future sales (which in my experience may not truly be the case).  Wall Street is notorious for manipulating stocks, in particular driving them down in order to set up buying opportunities.  More on this in my private mentoring programs.  Looking the weekly chart, a Leibovit Positive VR was formed six weeks ago accompanied by a rising 5/3/3 stochastic - to key ingredients to trigger a buy.  In addition, looking the daily charts, two downside gaps - one at 45.09 and one at 56.72 are providing upside magnets to price.

Find out more in this 3 minute video:



Happy Trading,
Jeff Gibby
Metastock.com

Tuesday, February 10, 2015

VR Training video on Cracker Barrel

Award winning trader Mark Leibovit discusses Volume Reversals on Cracker Barrel in this short training video.



Happy Trading

Jeff Gibby

Tuesday, January 20, 2015

Top Gold Trader Talks about Volume Reversals on Smith and Wesson

Mark Leibovit recorded a 2 minute video on trading Smith and Wesson.

You can watch it here:



Happy Trading
Jeffrey Gibby
Business Development Manager