Wall Street Insider Reveals Stock Market Trick That Spits Out Money!
The closing price is more important than the opening price. Knowing this can give you a serious advantage over most other traders. I'm going to show you how to pull profits out of this truth like money being spit at you from a broken ATM machine!
Let's begin.
The closing price reflects the final consensus of value for the day. This is the price most people look at when they get off work or when they print their daily charts at the end of the day. It is especially important in the futures markets, because the settlement of trading accounts depends on it.
Professional traders trade throughout the day. Early in the day they take advantage of opening prices, selling high openings and buying low openings, and then unwinding those positions as the day goes on. Their normal mode of operations is to fade"trade against"market extremes and for the return to normalcy. When prices reach a new high and stall, professionals sell, nudging the market down. When prices stabilize after a fall, they buy, helping the market rally.
Amateur and non-professional traders have very different trading patterns than those of professional and institutional traders. Amateur traders make up the majority of market participants at market open. As the day goes on, they slowly subside until all that is left at the end of the trading day are professional and institutional traders. Most amateur traders put on a trade at market open, before work, and then don't check it again until after market close.
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.
Let's say a stock you are long in goes up to its day's high at market open and then drops the rest of the day and finally closes near its day's low. You need to close out of your short term position. Why? Because this gives you a signal that professional traders are fading against your long position. - 23162
Let's begin.
The closing price reflects the final consensus of value for the day. This is the price most people look at when they get off work or when they print their daily charts at the end of the day. It is especially important in the futures markets, because the settlement of trading accounts depends on it.
Professional traders trade throughout the day. Early in the day they take advantage of opening prices, selling high openings and buying low openings, and then unwinding those positions as the day goes on. Their normal mode of operations is to fade"trade against"market extremes and for the return to normalcy. When prices reach a new high and stall, professionals sell, nudging the market down. When prices stabilize after a fall, they buy, helping the market rally.
Amateur and non-professional traders have very different trading patterns than those of professional and institutional traders. Amateur traders make up the majority of market participants at market open. As the day goes on, they slowly subside until all that is left at the end of the trading day are professional and institutional traders. Most amateur traders put on a trade at market open, before work, and then don't check it again until after market close.
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.
Let's say a stock you are long in goes up to its day's high at market open and then drops the rest of the day and finally closes near its day's low. You need to close out of your short term position. Why? Because this gives you a signal that professional traders are fading against your long position. - 23162
About the Author:
I hope you make a ton of cash in stock trading after reading this article. For more of Lance Jepsen's free inner circle trading secrets go to stock market
posted by X - Men @ 6:08 AM
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