Improve Your Trade Accuracy Without Using A Stock Screener
This secret does not involve using a stock screener. In fact, this one simple stock trading secret indisputably proves you can greatly improve your trade accuracy in every single market condition.
A retired institutional investor told me this secret years ago. The amazing thing is that this simple secret still works today. My accuracy now hovers around 80% thanks to this secret. I use it every week and I'm going to show you how you can use it every week as well.
I'm sure you have heard the cliche "two minds are better than one". I have redefined that term: "2 Professional Brains Can Crete What 89,697,618 Unprofessional Minds Can't"
There is more than 85 million traders in the U.S. alone and yet none of them have discovered the secret I'm about to tell you. Is this because most traders are ignorant? No it is not. The reason is that institutional investors have a range of tools that give them better insight into the market and in spotting trends before the average trader.
The secret is called the Weekend Effect. The Weekend Effect can be summarized like this: trading action is lower on Friday and Monday and returns are lower on Monday.
Miller did a study in 1988 that proved that returns are usually negative on Monday. Miller's research seems to suggest that the reason behind this is individual investor trading. In a second study, Lakonishok and Maberly (1990) and Abraham and Ikenberry (1994) used what is known as odd-lot trading as a measurement for individual investor trading patterns and found evidence consistent with the Miller hypothesis.
Trading activity is less on Friday for large-lot trades which is why the volume tends to be lower on this day. So institutional traders will zero out their trades on Thursday or Friday. Institutional traders don't like going into the weekend news cycle with any open positions.
Monday has lower trading volume than any other day of the week. Small, individual traders have more sell orders on Monday than any other day of the week. If small-size trades show individual investor activity and large-size trades show institutional investors then both types of investors play a key role in Monday being a negative return day. The individual traders contribute through their trading while institutional traders contribute through their withdrawal of liquidity on the proceeding Thursday or Friday. Institutional traders contribute by their absence on Friday and Monday, which reduces liquidity.
Your odds of making money on your trades are better on Tuesday through Thursday. You will discover your trading accuracy greatly improves when you go long a stock on Tuesday and sell on Thursday.
Now that you know markets have a habit of dipping on early Monday trading, do not sell your stock too early based on Monday morning trading activity. Remember, Monday's have the greatest number of head fakes to the downside. - 23199
A retired institutional investor told me this secret years ago. The amazing thing is that this simple secret still works today. My accuracy now hovers around 80% thanks to this secret. I use it every week and I'm going to show you how you can use it every week as well.
I'm sure you have heard the cliche "two minds are better than one". I have redefined that term: "2 Professional Brains Can Crete What 89,697,618 Unprofessional Minds Can't"
There is more than 85 million traders in the U.S. alone and yet none of them have discovered the secret I'm about to tell you. Is this because most traders are ignorant? No it is not. The reason is that institutional investors have a range of tools that give them better insight into the market and in spotting trends before the average trader.
The secret is called the Weekend Effect. The Weekend Effect can be summarized like this: trading action is lower on Friday and Monday and returns are lower on Monday.
Miller did a study in 1988 that proved that returns are usually negative on Monday. Miller's research seems to suggest that the reason behind this is individual investor trading. In a second study, Lakonishok and Maberly (1990) and Abraham and Ikenberry (1994) used what is known as odd-lot trading as a measurement for individual investor trading patterns and found evidence consistent with the Miller hypothesis.
Trading activity is less on Friday for large-lot trades which is why the volume tends to be lower on this day. So institutional traders will zero out their trades on Thursday or Friday. Institutional traders don't like going into the weekend news cycle with any open positions.
Monday has lower trading volume than any other day of the week. Small, individual traders have more sell orders on Monday than any other day of the week. If small-size trades show individual investor activity and large-size trades show institutional investors then both types of investors play a key role in Monday being a negative return day. The individual traders contribute through their trading while institutional traders contribute through their withdrawal of liquidity on the proceeding Thursday or Friday. Institutional traders contribute by their absence on Friday and Monday, which reduces liquidity.
Your odds of making money on your trades are better on Tuesday through Thursday. You will discover your trading accuracy greatly improves when you go long a stock on Tuesday and sell on Thursday.
Now that you know markets have a habit of dipping on early Monday trading, do not sell your stock too early based on Monday morning trading activity. Remember, Monday's have the greatest number of head fakes to the downside. - 23199
About the Author:
Written by Lance Jepsen. I hope your stock trading accuracy totally improves after reading this article. For more secret stock trading tips go to stock screener
posted by X - Men @ 1:43 AM
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