Apparently, it's incredibly hard to find a depiction of how stocks move, and why they move the way they do. It took me a long time to attain this understanding. This has been the most valuable tool that I've learned in chart reading, and I have no idea why all these books don't explain this. Maybe, the authors really do not understand?
Comments
TheLark
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Nice post Infinite, I wish I had a resource like this when I was first starting out
JamesPowell
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you are right, about books and authors etc. Google Sam Seiden and supply and demand based trading. Markets move for one reason and one reason only and that is actual unfilled orders. All those candles show us pretty much opposite of what we really need to see. They show us filled orders and filled orders mean nothing to us. Its the un-filled orders that matter and if you learn to recognize where banks and institutions unfilled real buy and sell orders are the rest is easy. There are two kinds of traders. Us and them. Us is the retail traders and them are the banks and institutions. You dont know me from Adam's house cat but for the sake of curiosity Google Sam Seiden and supply and demand based trading. Oh, there is another guy, friend of mine fact. Goes by handle of Maximum lots. Google Maximumlots.com. Its a free websight. Teaches you what Sam will only Max is free with not string attached. Uses these charts too, that's how i found them. Tell him Lamar said Hi.
timwest
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Well said JamesPowell, the market always goes to the level where the most volume will trade. That's how I learned it. I'm surprised it doesn't show up in the books you have read. It's a principle that has been around a long time, but it is worth repeating often. It's not "us" against "them" but rather just figuring out which way the market has the easiest way of going.
JamesPowell
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@timwest, hey man. Yes the market goes to where the most volume will trade and that will be the buy and sell orders of institutional players. That is where the various exchanges make their money, filling giant orders. I use the phrase us against them in reference to us as retail traders. 95% of us are the ones who take the opposite sides of those institutions. Not every time but frequently those big orders can be spotted on our charts. The market trades between these buy and sell zones if you will. The difficult part is learning to spot these zones on our charts. Then its a matter of placing our bets.
timwest
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Excellent. I look forward to your trade ideas. It's nice to know that we are speaking the same language! I've worked both sides of the street, buy side and sell side and for small traders and big traders, so I'm indifferent about "us" vs "them" as I've been on all the teams and it isn't easy no matter which team you are on. I dealt with the best traders at the best hedge funds in the world and they are just as in need of good trades as anyone. I think the difference is they know when they have a good trade on and they maximize that profit. They cut their losers very well. Thanks for the reply.