Secret Discovery Spits Money Out Of Stocks Like A Broken ATM!
The closing price is not equal to the opening price when it comes to trading in the stock market. You need to know that the closing price is much more important than the opening price. You are about to discover a little known truth that will have the stock market shooting out money like a broken ATM!
Let us just dive right into this.
The final consensus of value in a stock is reflected in its closing price. When people get off work, this is the price they look at. When they print their daily charts after market close, this is the price they see. The closing price is really important when it comes to the futures market. The settlement of trading accounts in the futures market depends on the closing price.
Institutional and professional traders will trade throughout the day. Their behavior is as follows. At the opening, they take advantage of opening prices by selling high openings and buying low openings. They then close out of those positions as the trading day goes on. What they do day in and day out is to trade against market extremes, also called fading. They are betting on a return to normalcy in any given market. When a stock price reaches a new high and then buy side volume falls, they sell and push the market down. When a stock price reaches a new low and then sell side volume falls, they buy and push the market up.
Amateur traders like you and I behave very differently. Amateurs like us usually trade at market open and then drop off as the day progresses. Most amateurs have to go to work and so they trade on the west coast at market open before work. They don't check the trade again until after work when they get home. Even traders on the east coast will sneak in a buy or sell at market open while at work and then not check their trading account again until the end of the day. At market close, the participants who are still trading are mostly professional traders.
Knowing this is a huge advantage! Why? Because it means that closing prices reflect the opinions of professionals. Look at any chart, and you will see how often the opening and closing ticks are at the opposite ends of a price bar. This is because amateurs and professionals tend to be on the opposite sides of trades. You want to trade with the professionals, not against them.
You should consider closing out your long position if the stock you are trading opens and then goes up near its day's high but drops the rest of the day and closes near its day's low. What this tells you is that professionals are fading against your position and so you need to get out. - 23199
Let us just dive right into this.
The final consensus of value in a stock is reflected in its closing price. When people get off work, this is the price they look at. When they print their daily charts after market close, this is the price they see. The closing price is really important when it comes to the futures market. The settlement of trading accounts in the futures market depends on the closing price.
Institutional and professional traders will trade throughout the day. Their behavior is as follows. At the opening, they take advantage of opening prices by selling high openings and buying low openings. They then close out of those positions as the trading day goes on. What they do day in and day out is to trade against market extremes, also called fading. They are betting on a return to normalcy in any given market. When a stock price reaches a new high and then buy side volume falls, they sell and push the market down. When a stock price reaches a new low and then sell side volume falls, they buy and push the market up.
Amateur traders like you and I behave very differently. Amateurs like us usually trade at market open and then drop off as the day progresses. Most amateurs have to go to work and so they trade on the west coast at market open before work. They don't check the trade again until after work when they get home. Even traders on the east coast will sneak in a buy or sell at market open while at work and then not check their trading account again until the end of the day. At market close, the participants who are still trading are mostly professional traders.
Knowing this is a huge advantage! Why? Because it means that closing prices reflect the opinions of professionals. Look at any chart, and you will see how often the opening and closing ticks are at the opposite ends of a price bar. This is because amateurs and professionals tend to be on the opposite sides of trades. You want to trade with the professionals, not against them.
You should consider closing out your long position if the stock you are trading opens and then goes up near its day's high but drops the rest of the day and closes near its day's low. What this tells you is that professionals are fading against your position and so you need to get out. - 23199
About the Author:
I hope you make a ton of money in the stock market after reading this article. For more of Lance Jepsen's free stock trading advice please visit stock market
posted by X - Men @ 11:20 AM
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