Dark Pool Quiet Accumulation Builds Stock Bottoms
During Trading Range Market Conditions when several industries are in their own Bear Market while other industries are continuing a Bull Market, determining when a stock has reached a final low or near the final low is critical for Swing Traders.They typically will be selling short into a bottom and then switching to buying long with Momentum Trading, as a stock hits the final low and moves with momentum or velocity action out of the extreme low in one of the new bottoming formations in the Stock Market.
Go watch the Swing Trading Training Video and learn about precision entries and exits, and how to use leading indicators to enter before price moves.
The chart example below is an excellent example of price trending down and then starting a base.
The new Basing Bottoming Formation begins after a big gap down caused by High Frequency Trading. The High Frequency Trading volume is easy to identify on daily view charts so long as the Volume Bars are not truncated. This high volume appears twice as High Frequency Traders gap the stock and run it down, but immediately the stock forms a Hurdle Candlestick Pattern reversal signal.
Unknown
to the High
Frequency Traders which are computer triggered millisecond orders, this stock dropped
into a Dark Pool Buy Zone™ which then triggered giant Institutional Time
Weighted Average Price style orders. These types of orders buy into a
stock incrementally, maintaining a bracketed price range and minimizing the
impact of their buying on Volume and Price.
TechniTrader
Quiet Accumulation TTQA is designed to track Dark Pool accumulation,
distribution, and rotation patterns as it determines which side of the trade
the large lot triggered.
Although
this stock base has a low of 75.0 it drops slightly further, as accumulation
eases ahead of the earnings season as is typical for Dark Pool accumulation
patterns in a new bottoming formation.
Then
a huge white candle forms. Intraday shows End of Day Professional Traders
moving in ahead of news, and High
Frequency Traders triggering after market opens. This pushed
price back up to near the high of the Buy Zone for the Dark Pools. Now the
stock is consolidating due to giant Institutions using Dark Pools and
controlling price as they accumulate more shares.
Summary
It
is no longer enough just to see a crossover or candle signal to enter a stock.
With 80% of all activity on the professional side, understanding who is
controlling price helps Retail Traders prepare for how price will behave in the
near term.
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In this instance, it was important to recognize the underlying influence on price by the giant Institutions using Dark Pools who controlled price as they accumulated creating a new bottoming formation. By recognizing the Dark Pools footprint Traders can be ready for the sudden Shift of Sentiment™ on the TTQA indicator for the Professional Traders buying, that often precedes a huge run or gap caused by High Frequency Traders trigger orders. This allows for more accurate entries and more consistent trading results.
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and learn how to optimize MACD, what
signals are most reliable, and combination indicators to improve MACD for higher
profits.
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In this instance, it was important to recognize the underlying influence on price by the giant Institutions using Dark Pools who controlled price as they accumulated creating a new bottoming formation. By recognizing the Dark Pools footprint Traders can be ready for the sudden Shift of Sentiment™ on the TTQA indicator for the Professional Traders buying, that often precedes a huge run or gap caused by High Frequency Traders trigger orders. This allows for more accurate entries and more consistent trading results.
Retail
Traders need to learn the NEW Bottoming Formations in the Stock Market, how to
use Leading Indicators based on quantity and lot size, and the new Shift of
Sentiment candlestick patterns that reveal who is controlling price. Price
behaves totally different when various Market Participant Groups are in control
and dominating price action, for example Dark Pools rarely move price much.
Go to
the Learning Center and watch training webinars Velocity Swing
Trading with High Frequency Trader Momentum, Trade Management Planner, High
Frequency Trader Action, and Explorations Beyond the Basics of MetaStock.
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MetaStock Tools - TechniTrader custom chart templates with the hybrid indicators shown and discussed in this article are available for MetaStock users. To learn more Click HERE
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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
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