Filthy Rich Trader Comes Clean and Shares His Secret
Are you ready to learn a sure-fire system for generating quick and easy cash flow from the stock market?
This money pulling indicator is used by billion dollar hedge fund traders like Steve Cohen who's firm has average over 40% a year!
Some 40 traders work under him. He is the king of tracking the volume of any given stock or market.
Volume is one of the most overlooked indicators by amateur traders.
This article and lesson is about how to READ volume correctly. Don't be arrogant. Even if you think you know everything there is to know about volume, you owe it to yourself to read this article and make sure you know how to use volume to super-charge your stock market profits.
Think of each tick in the volume as a temporary meeting of two minds: a seller and a buyer. Shares or contracts that have exchanged hands are measured by volume. Volume is usually represented by a histogram bar. The volume reveals secret motives and psychology of bear traders as well as bulls. Increasing volume verifies trends while decreasing volume questions the longevity of the current trend.
In a sell off, increasing volume into the move tells you that panic has firmly settled in as traders scramble for the exit. If you look carefully, you'll also see newbies jumping in as they bet the market is going to reverse. Keep in mind that in order for a sell order to execute, someone has to be a buyer. Every trade has these two sides. Jumping in to buy in a downtrend is known as trying to catch a falling knife. Most often it is a bad idea. Never bet against the wisdom of the crowd. Let some other newbie put on that trade. When all the sellers have exited the stock, the volume on the downside falls off as the downward move begins to run out of steam.
During an uptrend, look for rising volume. Rising volume in an uptrend means that greed has firmly gripped the crowd that is trading the stock. More and more greedy traders will dog pile into the stock. Selling into an uptrend should only be done if your profit thesis has been fulfilled. When fear begins to replace the greed, the volume on the upside begins to fall as the upward move runs out of steam.
Volume goes beyond just telling the conviction of a current trend, it gives you several clues.
If the volume spikes on a single day, it often means that a new trend is about to start, especially if it happens on a breakout from a previous trading range. If the volume spikes 300 percent or more above the average it often means that market hysteria has set in. This occurs when fearful bears decide that a downward move has broken key support and rush in to sell short or when bulls decide that an uptrend is for real on a resistance break and rush in to buy.
A divergence between volume and price usually means that a stock is at a turning point.
If price rises while volume falls, it is a signal that the uptrend is not attracting very much interest. If price falls to a new low and volume falls at the same time, it is a signal that the downtrend is not attracting very much interest and an upside reversal is likely. Price is more important than volume but a master traders knows how to analyze volume in order to gauge the psychology of market participants. - 23222
This money pulling indicator is used by billion dollar hedge fund traders like Steve Cohen who's firm has average over 40% a year!
Some 40 traders work under him. He is the king of tracking the volume of any given stock or market.
Volume is one of the most overlooked indicators by amateur traders.
This article and lesson is about how to READ volume correctly. Don't be arrogant. Even if you think you know everything there is to know about volume, you owe it to yourself to read this article and make sure you know how to use volume to super-charge your stock market profits.
Think of each tick in the volume as a temporary meeting of two minds: a seller and a buyer. Shares or contracts that have exchanged hands are measured by volume. Volume is usually represented by a histogram bar. The volume reveals secret motives and psychology of bear traders as well as bulls. Increasing volume verifies trends while decreasing volume questions the longevity of the current trend.
In a sell off, increasing volume into the move tells you that panic has firmly settled in as traders scramble for the exit. If you look carefully, you'll also see newbies jumping in as they bet the market is going to reverse. Keep in mind that in order for a sell order to execute, someone has to be a buyer. Every trade has these two sides. Jumping in to buy in a downtrend is known as trying to catch a falling knife. Most often it is a bad idea. Never bet against the wisdom of the crowd. Let some other newbie put on that trade. When all the sellers have exited the stock, the volume on the downside falls off as the downward move begins to run out of steam.
During an uptrend, look for rising volume. Rising volume in an uptrend means that greed has firmly gripped the crowd that is trading the stock. More and more greedy traders will dog pile into the stock. Selling into an uptrend should only be done if your profit thesis has been fulfilled. When fear begins to replace the greed, the volume on the upside begins to fall as the upward move runs out of steam.
Volume goes beyond just telling the conviction of a current trend, it gives you several clues.
If the volume spikes on a single day, it often means that a new trend is about to start, especially if it happens on a breakout from a previous trading range. If the volume spikes 300 percent or more above the average it often means that market hysteria has set in. This occurs when fearful bears decide that a downward move has broken key support and rush in to sell short or when bulls decide that an uptrend is for real on a resistance break and rush in to buy.
A divergence between volume and price usually means that a stock is at a turning point.
If price rises while volume falls, it is a signal that the uptrend is not attracting very much interest. If price falls to a new low and volume falls at the same time, it is a signal that the downtrend is not attracting very much interest and an upside reversal is likely. Price is more important than volume but a master traders knows how to analyze volume in order to gauge the psychology of market participants. - 23222
About the Author:
By Shawn Tilman. I hope this article helps you better your trading and make a ton of money. For more FREE master stock trading tips and advice go to stock market
posted by X - Men @ 2:15 AM
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