TechniTrader "Use Dark Pool Chart Patterns for Higher Profits" by Martha Stokes CMT

Calculate the Cost of Trading when Determining Profits


To use Dark Pools Chart Patterns for higher profits, is an area of Technical Analysis that has not made its way into most stock market books, articles, and information available on the internet. The reason why Dark Pool technical patterns aka footprints are not yet part of the Technical Analysis standard of teaching, is that these are NEW chart candlestick patterns.

Dark Pools did not exist in the 1980’s, 1990’s, or early 2000’s decades. These are relatively new trading venues for the giant Institutions who demanded obscurity, due to the rise of the High Frequency Trading Firms in the mid 2000 decade after the switch from fractions to decimals. Basically High Frequency Trading Firms morphed out of the Small Order Execution System Bandits, during the rouge Floor Traders era.

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Nearly all large and giant lots are transacted nowadays on the hidden Alternative Trading System venues called Dark Pools, which are used by giant Institutions. However what can not be hidden, is their easy to identify candlestick footprints on stock charts.
There are many different types of Dark Pool footprints that the giant Institutions leave on charts, due to their preferred professional order types.

One of the more common candlestick footprints happening is the “Basing Bottom Formation,” which is a brand new type of bottom. In order to use Dark Pool Chart Patterns for higher profits, the key element in this pattern is to identify the Dark Pool Quiet Accumulation and enter early before the stock runs up.

See a chart example below of a Basing Bottom Formation caused by Institutions buying using Dark Pools.
chart example with dark pool buy zones - technitrader

However, early entry can be problematic if a trader is using Price and Time Indicators, as well as both Momentum and Price Oscillators. You may get an early crossover, but then the stock moves sideways up and down in a choppy pattern which causes whipsaw exits and losses. 

Another problem getting in early is that many Retail Traders wait and wait for signals from Momentum Indicators, which gets them into the stock very late in the run. This means instead of a high profit trade, the Retail Trader takes a meager profit. The Retail Traders Market Participant Group includes those who have learned to trade from home.


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True profit is one big part of trading that most Retail Traders fail to include in their profit evaluation. How to calculate the true cost of your trading is considering more than just the cost of Charting Software, Broker fees and charges, and possibly subscriptions to Newsletters.
To accurately calculate whether a trade is profitable or not, you must also include ALL of the normal business expenses for Trading as a Business. 

Trading as a Business includes the following:

1. You MUST pay yourself something for your time. How much could you make an hour, working for a corporation in your field of expertise or your degree? That is the minimum amount you should use as a base for trading expense as an hourly wage.

2. You must also include the average losses. You must take an average of your losses each month and divide it into your trades per month, and subtract that loss from your profits of every profitable trade.

3. Other expenses include your computer, printer, and other hardware depreciation. 

4. In addition there is the office space in your home, electricity, internet, phone, and office expenses such as paper, pens, and journals. 

5. Finally add up the cost of time attending webinars, the reading articles, and also if you pay a paper trading simulator fee.

Summary

If you did an accurate calculation of your true trading costs, you would find that taking a .25 cent profit on a 100-1000 share trade is not at all profitable. You are actuality losing money every time you trade. So learning how to enter a stock trade earlier based on recognizing a Dark Pool Buy Zone™ is crucial, and can turn your trading into a career.

TechniTrader is "The Gold Standard in Stock Market Education." Go to the TechniTrader.com Learning Center and watch a wide variety of webinars, to experience for yourself the excellence of TechniTrader education.

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Followers may request a specific article topic for this blog by emailing: info@technitrader.com

Trade Wisely,

Martha Stokes CMT
TechniTrader technical analysis using a MetaStock chart, courtesy of Innovative Market Analysis, LLC dba MetaStock

Chartered Market Technician
Instructor & Developer of TechniTrader Stock and Option Courses
TechniTrader DVDS with every course.

This weekly stock discussion is sponsored by TechniTrader.com a MetaStock® Partner

©2016-2017 Decisions Unlimited, Inc. dba TechniTrader. All rights reserved. 
TechniTrader is also a registered trademark of Decisions Unlimited, Inc.
Disclaimer: All statements are the opinions of TechniTrader, its instructors and/or employees, and are not to be construed as anything more than an opinion. TechniTrader is not a broker or an investment advisor; it is strictly an educational service. There is risk in trading financial assets and derivatives. Due diligence is required for any investment. It should not be assumed that the methods or techniques presented cannot result in losses. Examples presented are for educational purposes only. 

TechniTrader Education "Understanding Momentum Run Action" by Martha Stokes CMT

How to Use MetaStock Indicators During Momentum Price Action for Higher Profits


Most Retail Traders exit runs too early, losing most of their profits from a Momentum Run. Indicators that reveal weakening or stronger patterns in runs, can help Traders hold during brief episodes of resting days or mild profit taking, allowing for much higher Return On Investment for that trade.


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Two MetaStock indicators that help Traders during a Momentum Run are the TechniTrader Volume Accumulation TTVA Indicator and the TechniTrader Flow of Funds TTFF Indicator.

The TechniTrader Volume Accumulation TTVA Indicator is a center line Volume Oscillator, and is shown in the middle chart window of the example chart below. It is designed to show when Dark Pool accumulation starts, as well as when the run is starting to lose momentum energy before profit taking or reversal.

The TechniTrader Flow of Funds TTFF Indicator is shown in the bottom chart window of the example chart below and provides additional information as to how much activity is coming from the giant Buy Side Institutions, as opposed to just Retail Traders or Independent Investors.

The combination of these two indicators helps Swing Traders make better hold and exit decisions resulting in lower risk, less stress, and higher profits for each trade. 

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When a Trader can increase the profits of every trade made it increases their monthly income, reduces the risk of choosing weaker stock picks just to have something to trade, and helps to gain confidence while developing the skills of trading.

Regardless of which MetaStock trading system or strategy you employ to find stocks to trade, finalizing the selection using Leading Hybrid Indicators will dramatically reduce weak trades that net losses, and will increase profits with stronger picks that run more points. 

TechniTrader is "The Gold Standard in Stock Market Education." Go to the TechniTrader.com Learning Center and watch The Basics of the Stock Market for New Investors and Beginning Traders Webinar Lessons, to experience for yourself the excellence of TechniTrader education.

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The chart example below shows a very common Momentum Run action.

 example showing a common momentum run action - technitrader

This is due to Dark Pool Quiet Accumulation going on by the giant Institutions, which is hidden from those trading on the Exchanges, Electronic Communication Networks, and other venues. When giant Institutions accumulate they are removing vast quantities of liquidity aka stocks available from the market, and this in turn creates the Momentum Runs out of a bottom low.

In the chart example see the first long green arrow indicating where the TechniTrader Volume Accumulation TTVA Indicator signaled early that a Dark Pool Buy Zone™ was triggered, and then the stock drops to its final low. By knowing in advance that Dark Pools have commenced accumulation even while the stock makes a lower low, allows Swing Traders to prepare for the sudden upside Momentum Runs that follow.

The TechniTrader Flow of Funds TTFF Indicator tells the Trader that this is a few giant Buy Side Institutions bargain hunting to invest funds, and that Smaller Funds are not yet aware of their giant lot buying on the Dark Pool Alternative Trading System venues. The stock bolts upward when Professional Traders discover the accumulation, barely pausing at the initial Dark Pool Buy Zone.

TechniTrader is "The Gold Standard in Stock Market Education." Go to the TechniTrader.com Learning Center and watch a wide variety of webinars, to experience for yourself the excellence of TechniTrader education.

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It then continues to run up into resistance before profit taking occurs, which stalls price but does not cause a major price collapse. Runs of this type can be very lucrative for a Technical Trader who understands the dynamics behind this price action. Learning to use Accumulation, Large Lot, and Flow of Funds Indicators is crucial to successful Swing Trading. 

Summary

Price patterns are important, but what is even more critical to track is WHEN and WHERE the giant Buy Side Institutions who control trillions of assets, start their bargain hunting buying activity.

Followers may request a specific article topic for this blog by emailing: info@technitrader.com

Trade Wisely,

Martha Stokes CMT


TechniTrader technical analysis using a MetaStock chart, courtesy of Innovative Market Analysis, LLC dba MetaStock


Chartered Market Technician
Instructor & Developer of TechniTrader Stock and Option Courses
TechniTrader DVDS with every course.

This weekly stock discussion is sponsored by TechniTrader.com a MetaStock® Partner

©2016-2017 Decisions Unlimited, Inc. dba TechniTrader. All rights reserved. 
TechniTrader is also a registered trademark of Decisions Unlimited, Inc.

Disclaimer: All statements are the opinions of TechniTrader, its instructors and/or employees, and are not to be construed as anything more than an opinion. TechniTrader is not a broker or an investment advisor; it is strictly an educational service. There is risk in trading financial assets and derivatives. Due diligence is required for any investment. It should not be assumed that the methods or techniques presented cannot result in losses. Examples presented are for educational purposes only.