Thursday, August 29, 2013

Are you Prepared?

Martha Stokes CMT teaches you how to prepare for the most active trading season...

MetaStock® SPRS Series - Week 134 – August 30, 2013 - MetaStock Spatial Pattern Recognition Skills Series  written by Martha Stokes CMT

September through February are the busiest and most active trading months of the year, with heaviest trading volumes and higher energy.  Even though August appears to be quiet on the surface, there is a huge amount of activity just below the slumping Index action. If retail traders only watch the indexes they miss all of the underlying activity in August, which gives vital information about what to expect for trading in September and forward.
Explorations that are customized to follow the indexes, do not track what is crucial to successful trading. Without this information retail traders are utterly reliant upon less than 10% of the listed stocks, and NONE of the Exchange Traded Derivatives which at this time is 1,395 ETFs. The NASDAQ currently has 2,663 listings, the NYSE has 4,632, AMEX 438, and OTCBB 1,076.
The S&P500, Dow, and NASDAQ only represent 630 companies. 
 


The remaining 9,574 trading instruments on the exchanges represent a far larger body of stocks that do not always follow the lead of the indexes. In fact of you were to study this huge group of stocks and ETFs, you would discover that often times these lead the indexes. This is because they expose the direction and sentiment of the giant funds. They reveal the Sell Side institutions and Buy Side institutions and their interest or lack of interest, their accumulation or their distribution in and out of sectors and industries, and whether they are going to move into large cap or are vested in smaller cap stocks.
All of this information is available IF you use Explorations that are defined to track the institutions both Sell Side and Buy Side, and where they are placing money and where they are rotating. This activity is not seen on the indexes. It can only be studied by using Explorations designed to expose what is going on with the vast majority of stocks and ETFs that are not listed on indexes.
If you are a TechniTrader® Student using our Advanced Tools specifically designed for MetaStock, you have all the Explorations you need to study the underlying market beneath the major indexes in relation to how the indexes are performing.  In addition you also have specific Explorations for your trading styles such as Swing or Position trading, price levels, strategies, and quiet accumulation tracking bottoming or topping action. 
The goal of trading should be to streamline your trading process so that you spend more time trading and less time trying to find stocks to trade.  This means understanding the market conditions so that you can select the right stocks for the current trading conditions, the correct strategies to use based on which market participants are in control of price at that time, and the overall sentiment of the underlying securities because these lead the market action most of the time.
If you are still using the 3 major indexes as your guide to trading you are missing a huge chunk of critical information. This can be one of the reasons for chronic losses, whipsaw trades, and disappointing net profits.  Upgrade your trading process by incorporating not only the 3 major indexes, but also the analysis of the bulk of the market which are the underlying securities not listed on the 3 big indexes.
For more information regarding Explorations that are defined to track the institutions both Sell Side and Buy Side, sign in to watch a free TechniTrader - MetaStock Webinar "Explorations: Beyond the Basics" CLICK HERE or http://goo.gl/bhE7F3
Trade wisely,
Martha Stokes CMT

Member of Market Technicians Association
Master Rated Technical Analyst for Decisions Unlimited, Inc.
Instructor and Developer of TechniTrader® Stock Market Courses
For additional training visit http://technitrader.com
This Stock Discussion and Training Lesson is sponsored by TechniTrader.com
MetaStock® Partner

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