The Difference Between Buyers And Sellers

Beginner Stock Market Basics

There are currently 9 Market Participant Groups buying and selling at the same time in the Stock Market. For every stock purchase there is a seller, and for each buy there is a sell. The role of the Market Maker is to balance the buying and selling.

There are huge Pension Funds, medium sized funds, small funds, and tiny funds. There are well managed funds and poorly managed funds. There are Investor groups, Independent Investors who are wealthy, and Independent Investors who are just making ends meet. There is the Odd Lot Investor who buys just a few shares, the Options Traders, and the Futures Traders. There are also the Market Makers, who are the savviest Day Traders on the planet.
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Market Makers are in this to make money for their company, but they must abide by the rules. They typically do not want to ever be holding a position at the end of the day. Their responsibility to the market is to "make a market" by stepping in if there is no buyer or no seller. The rest of the time, they are buying and selling just like any other Professional Trader. If someone places a market order, they can to some extent dictate the price of that order based upon supply and demand.

However the popular notion that Market Makers are "out to get the little guys" is inaccurate. The reality is that most Retail Traders aka "the little guys" who often work from home trading in 100-500 share lots. It would be impractical for the Market Maker to chase such small orders because there would be no profit in it for them. However there is also something far more important that has happened to the Stock Market, and the Market Makers role in the past few years.


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Nowadays most stock orders are routed and executed automatically. It is estimated that about 80% of all transactions are fully automated. These orders originate from many different venues, exchanges, Alternative Trading Systems, Electronic Communication Networks, and foreign markets. This means that your order is matched with the opposite required order to fill but not by a Floor Trader or a Market Maker as was the case in the past, but with a computer program that matches up the orders and fills them automatically. 

Sometimes beginner Investors and Traders place Stop Losses incorrectly, are taken out of the trade and mistakenly think this may have been done by the Market Maker. There are hundreds of millions of shares traded each day, and there are billions of orders placed every day. One 100 share lot order is lost in such volumes.

If you are taken out of a trade due to an incorrect placement of a Stop Loss, it was due to the millions of other traders who are trying to buy or sell that stock. You are for the most part totally unaware of those millions of other traders. It may also be that you are using a Retail Online Broker that fills your order out of their inventory of stock. This occurs frequently with small lot orders placed with brokers that offer extremely low execution fees, and make up the difference with slippage on the spread.

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Another factor that is relatively new to the markets is the High Frequency Trading Firms. These are fully computerized orders that are triggered automatically by an algorithm computer program. These computer based triggers can fire off 60,000 orders each minute.  You need to be aware of what triggers the High Frequency Trading so that you can either avoid them, or enter ahead of their millisecond trading. By Securities and Exchange Commission law, Independent Investors and Retail Traders are not allowed to trade on the millisecond, only on the one minute. This may seem unfair, but it is designed to protect you from extreme speculative trading activity.

Another new trading platform are the Dark Pools, with actually a form of it in existence since the giant Pension Funds were allowed to invest in stocks. A Dark Pool is a venue where giant lot orders are transactions. Giant Institutions buying millions of shares of stock do not want to have High Frequency Trading disturbing price, as they buy in incrementally over a period of many weeks. This massive buying can distort the balance between buyers and sellers if it is not done carefully and properly. 

Be aware of where, when, and how these Dark Pool Investors buy and sell.

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Periodically there is an imbalance between buyers and sellers. When one side overwhelms the market with orders then the Market Maker as is his duty, steps in to "make the market" and either sells stock out of his own inventory or buys stock that is offered for sale. When this occurs, price can move suddenly and in the opposite direction than you expected. That is why you can end up on the wrong side of the trade.

Summary

Often a beginner Investor or Trader rushes training on the simulator with paper trading. Take your time until reaching a 75-80% success rate using the simulator before going live in the market. Learn the 6 different Market Conditions, and correct Stop Loss placement for your Trading Style.
Followers may request a specific article topic for this blog by emailing: info@technitrader.com

Trade Wisely,
Martha Stokes CMT

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

©2016 Decisions Unlimited, Inc. All Rights Reserved.
TechniTrader is the Registered Trademark of Decisions Unlimited, Inc.
Disclaimer: All statements, whether expressed verbally or in writing are the opinions of TechniTrader its instructors and or employees, and are not to be construed as anything more than an opinion. Student/subscribers are responsible for making their own choices and decisions regarding all purchases or sales of stocks or issues. At no time is any stock or issue on any list written or sent to a student/subscriber by TechniTrader and its employees to be construed as a recommendation to buy or sell any stock or issue. TechniTrader is not a broker or an investment advisor, it is strictly an educational service.

Topping Candlestick Pattern Formations for Beginners

List of Original Classic Formations with Detailed Explanations
One of the most important aspects of learning to read stock charts and using Technical Analysis is to remember, that the Market Structure is changing and evolving over time. Sometimes these changes are very slow, other times the evolution is occurring at a rapid pace. In the past 5 years, the pace of change has been accelerating and continues to move at an ever increasing level. Therefore beginner Independent Investors and Retail Traders need to be aware that all of the older books, articles, and information on the internet as well as in bookstores can be studied but also accepted as being outdated.

The Topping Candlestick Pattern Formations that are developing now in the Stock Market reflect the fact that now 70-80% of all the market orders are automated. What this means is that most of the orders are triggered by a computer. Market Makers used to be humans that made the market, by filling orders when there was no counter order. Now most of the Market Maker orders are fully automated.

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Computer generated and matched orders create different technical patterns including topping formations, than human initiated and typed in orders to the market. In addition the increased use of Alternative Trading Systems the giant Buy Side Institutions use creating Dark Pools, High Frequency Trading Firms algorithmic trading, Electronic Communication Networks, and 16 different US stock Exchanges create a far more dynamic Stock Market than what was present just a few years ago.

To start understanding Topping Formations, beginner Independent Investors or Retail Traders must learn The Four Original Classic Topping Candlestick Pattern Formations. Then they must learn the NEW Topping Candlestick Pattern Formations of the automated marketplace. When both are learned, then the Independent Investor or Retail Trader is prepared to use stock charts and Technical Analysis to the fullest advantage and success. The TechniTrader Candlestick Patterns Explained Webinar shows NEW Candlestick Patterns.

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Topping Candlestick Pattern Formations occur when a stock has been moving up for a long period of time, and speculation has entered the price action. Often stock prices will go vertical with huge gains or shrinking candlestick price action, just before a topping pattern begins. Tops often take a long time to form because most Independent Investors and Retail Traders do not want to believe the uptrend is over. Late comers frequently buy a stock that is topping when it "dips" in price, because they are unaware of the fact that the stock has reached the end of its long-term or intermediate-term uptrend and needs to correct and move down.
This late buying causes tops to form over an extended period of time with a variety of topping patterns. Sometimes a top comes swiftly and the price collapses, but usually it takes a while. Regardless of your personal investing or trading style, being able to recognize topping formations early will help you keep more profits by exiting before the stock falls.

The Four Original Classic Topping Candlestick Pattern Formations are the following:

1. Inverted V Top
This is the opposite of a bottoming V stock. The Inverted V Top occurs when a stock has been running up so fast that it does not develop any viable support levels. Instead it suddenly peaks and forms a sheer cliff drop on the other side. These often have gap downs and the runs are so fast downward that they can be tough to catch. Inverted V tops are rare now due to how High Frequency Trader activity controls most topping formations.

2. Double Top 
This is an inverted W or what is usually called an "M Top." This is where the stock reaches a high, retraces, and then moves up again but is unable to move beyond the original previous high to continue up. It then proceeds to move down again. The confirmation that a reversal of trend has occurred is when the price of the stock violates the lows of the M formation. Double Tops are not topping formations until the reversal is signaled. Double Tops can easily turn into a longer term sideways pattern that meanders up and down within that price range, so confirmation of price is critical. Also Double Tops or M Tops are less common and rarely form on long-term trends. With the automated market, most M Tops are seen only on the short-term trend.

3. Triple Top and Head & Shoulders Top
These are basically that the Head & Shoulders formation is a variation of the Triple Top. Head & Shoulders Topping Formations are exceedingly rare nowadays. Triple Tops are also quite rare. The rule for Head & Shoulders is that it must break the neckline, which is the low between the shoulders. The neckline can be horizontal or angled, and either makes no significant difference in the success of the downside formation. The head should be formed on upside weaker volume, the right shoulder should form on upside weaker volume still, and the break to the downside should form with strong red or downside volume.

These tops are very rare nowadays due to how the giant Buy Side Institutions using Alternative Trading Systems, slowly sell out of a stock long before it runs up speculatively. The Head & Shoulders formation peak fails to form very often, as High Frequency Trading triggers massive collapsing sell offs on sudden news events. Since High Frequency Trading is mostly one day events the "Head" that used to form no longer does, because there is no continuation after the huge one day volume surge and price speculative intraday action.

4. Rounding Top
This is the opposite of the rounding bottom, and is very ominous and reliable. Rounding Tops usually form slowly giving the holder time to exit. They can be short-term or long-term formations. The Rounding Top used to be less common but now is forming on all 3 Trends, Long-Term aka primary, Intermediate-Term, and even the Short-Term Trend. The Rounding Top is harder to identify early on but is a pattern all Independent Investors and Retail Traders need to learn, and identify as early as possible to protect more profits. The Rounding Top can fall quickly, and has less support on the way down to prior lows.
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Topping Candlestick Pattern Formations on the 3 Trend timeframes of Long-Term, Intermediate-Term, and Short-Term are caused by different Fundamental situations. Here are explanations of those situations:

Long-Term Trend 
This top starts when the company has reached market pre-saturation of its main products or services. The overall Stock Market Topping occurs either when several major new technology industries have reached market saturation, or speculation has entered a Bull Market causing extreme Angles of Ascent™ on the long-term trend for most stocks, or due to a relational impact of a different Financial Market that is collapsing.

Intermediate-Term Trend 
This topping action is usually related more to industries and sectors, and most stocks in that industry or sector will peak at similar intervals. 

Short-Term Trend 
This is mostly individual companies that have a weaker quarter, have cyclical earnings and revenues, or where an unexpected event has hampered the growth of the company. Regardless of all of the technical patterns you can learn all tops are based on Fundamental issues, Financial Market inter-relationships, or a sudden unexpected Black Swan event such as a banking debacle.

Tops are caused by short-term trading action. Market Tops as opposed to individual Stock Tops, can take quite a bit of time to form. Individual stocks can often top rather rapidly. Contrarian indicators will show extreme readings prior to Market Tops for 2-4 months or longer, before the Market Top actually occurs. This is because of the buying that takes place as a top forms. Individual stocks will show nearly vertical trendlines if the buying that caused the top has become irrational without solid basis, and is therefore pure gambling with get rich speculation.

Contrarian views are tough for beginners. It is really hard to jump onto the river bank of fast flowing trading and emotion. No one likes to be the lone man out. That is why most highly successful traders are loners, and do not participate in group chat rooms. You have to be able to make a call or decision and stick with it, even when others think you are wrong. Contrarian also only works when the market goes to an extreme. It does not work when the market is slightly overbought or slightly oversold. It has to be an extreme.

During a Topping Candlestick Pattern Formations it is likely that the stock price will go from one extreme high to another, and then another again before it collapses. Rarely is that first extreme the end of the price high. The reason is the Odd Lot Buyer and the Small Lot Uninformed Buyer who have very little knowledge about the market. Their market orders can drive prices much higher. Then there are the High Frequency Trading Firms using computer generated algorithms that trigger thousands of orders on the millisecond scale, which create a daily feeding frenzy second by second. 

Retail Day Traders are only permitted to trade on the minute timeframe, and those orders are filled on a mandatory 90 seconds. High Frequency Trading Firms trade 1000-3000 times per second. That means the Retail Day Traders minute order cannot see the 60,000 to 90,000 High Frequency Trading Firm orders that are being processed, and changing price during that one minute the Retail Day Trader order is being filled. Therefore, Retail Day Traders are constantly at a disadvantage in terms of seeing what High Frequency Trading Firm orders are doing to price on the millisecond scale. That is why the Securities and Exchange Commission has sent out messages warning Retail Traders of the hazards and huge risk of Day Trading in the automated marketplace.

The TechniTrader Beginner Webinar Lessons is a good place to start learning about trading in the Stock Market.
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Summary
For beginner Independent Investors and Retail Traders trying to trade the Stock Market in an extreme mode can be very dangerous and tricky, as the volatility increases with each level of price speculation. It is a wave of euphoric buying that is totally without any logic or rational. My advice for most beginners is not to trade live but to paper trade and learn. Once you have a 75-80% success rate on a professional style simulator which are not the "game simulators" promoted to the retail crowd, then you will be ready to trade live in the Stock Market.

I also advise avoiding Day Trading for Retail Traders, because this has become an extremely risky trading style in the past few years. Instead consider Swing Trading or Position Trading, which provide far superior profits to Retail Day Trading.

Topping Candlestick Pattern Formations are part of the Stock Market. They are the normal cycle of business that begins with a new product or service, grows and expands as the product or service becomes popular, and then contracts as that product or service reaches market saturation where those who would buy it already own it. These cycles repeat over and over, and are why tops and bottoms continually occur in the Stock Market. In addition every technical pattern is tied back to either fundamentals or to technical trading techniques.


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

Trade Wisely,
Martha Stokes CMT

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

©2016 Decisions Unlimited, Inc. All Rights Reserved.
TechniTrader is the Registered Trademark of Decisions Unlimited, Inc.

Disclaimer: All statements, whether expressed verbally or in writing are the opinions of TechniTrader its instructors and or employees, and are not to be construed as anything more than an opinion. Student/subscribers are responsible for making their own choices and decisions regarding all purchases or sales of stocks or issues. At no time is any stock or issue on any list written or sent to a student/subscriber by TechniTrader and its employees to be construed as a recommendation to buy or sell any stock or issue. TechniTrader is not a broker or an investment advisor, it is strictly an educational service.

Why Does A Stock Market Crash

See List of 5 Tips for Details

For new Independent Investors and new Retail Traders a Stock Market crash is a very scary event. They do not know what to think and wonder what they should do, hold and wait or sell and run. Many times the information they hear on the news is inaccurate or misleading.

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Here is a list of tips for details on a better understanding of why does a Stock Market crash:

1. There are two sides to every stock transaction, a buyer and a seller to maintain an orderly market. The structure is designed so that there will always be a buyer and seller, as Market Makers step in or High Frequency Trading firms acting as Market Makers offer stock out to complete the order.

2. For every buyer of a stock order, there must be someone willing to sell stock of an equal amount. Sometimes orders are grouped in order to meet the demand of the buyers. For example there may be a buyer who wants to buy 1000 shares of stock, and sellers who want to sell 100 shares which are not enough to fill the order. The Market Maker computers since this is all automated now, will go and search for sellers who equal 1000 shares and this may be one seller or many sellers.

3. All orders must be filled within a set amount of time, which is required by law. Usually a retail order will fill within a minute or less, often within seconds.

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4. When there are too many people who want to sell their stock, and there are no or very few buyers the stock price will fall because there is a lack of buyers. When prices are falling most people are afraid to buy a stock. The result is that stocks tend to fall faster than they move up.

5. Most investors believe those who are Selling Short cause downtrends. What they do not realize is that selling short provides the buy side during a Stock Market sell down, when panicked investors want out of stocks. Without “Buy to Cover” as the Sell Short buying is called, stocks would fall faster, steeper, and lose far more value. The reason why Selling Short is legal, is because the market needs someone to buy, as the stock is losing value and falling. Without Buy to Cover orders, stocks would fall faster and lose far more value.

View a variety training webinars to help you begin to trade or improve your trading in the Stock Market.
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Summary

Understanding the mechanisms of the market is important, especially a Stock Market crash. When investors and traders understand how something works and why it works the way it does, it helps them make informed decisions rather than acting on fear of losing money or greed when prices are rising speculatively. Rarely do investors buy low and sell high. This is because they do not know how to read stock charts, which would show them what is really going on with a stock price.

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

Trade Wisely,
Martha Stokes CMT

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

©2016 Decisions Unlimited, Inc. All Rights Reserved.
TechniTrader is the Registered Trademark of Decisions Unlimited, Inc.

Disclaimer: All statements, whether expressed verbally or in writing are the opinions of TechniTrader its instructors and or employees, and are not to be construed as anything more than an opinion. Student/subscribers are responsible for making their own choices and decisions regarding all purchases or sales of stocks or issues. At no time is any stock or issue on any list written or sent to a student/subscriber by TechniTrader and its employees to be construed as a recommendation to buy or sell any stock or issue. TechniTrader is not a broker or an investment advisor, it is strictly an educational service.

Money Flowing In And Out Of A Stock

Market Participant Groups and Market Orders

Professionals often speak of money flowing in and out of a stock, but how can that be if there are an equal number of buyers and sellers? It is because Money flow is the balance of the lot sizes, and at most times there are four positions in any one stock which are Buy, Buy-to-Cover, Sell, and Sell Short. Each of investor and trader in the stock has their own separate agenda. 

Each may come from a different Market Participant Group, and there are now nine of these groups in the stock market including giant Institutional Investors which are giant Mutual and Pension Funds, Wealthy Individual Investors, Corporations, Professional Traders, High Frequency Traders, Small Funds, Retail Traders, Small Lot Investors, and Odd Lot Investors.

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Buyers are anticipating that the stock is going to move up. Their order types span the spectrum for example Market Orders, Limit Orders, and Buy Stop Limit Orders. Buy-to-Cover orders are traders who are panicking because they were selling short in the stock and are afraid that stock is going to move up more than it recently has, or they sold short and they are now taking profits. Most Buy-to-Cover are usually Market Orders or Limit Orders. 

Those who are selling the stock are anticipating the stock is going to move down. On an uptrending stock this is profit taking near the top of the run. 

It can also be on a downtrending stock because the seller is afraid that the stock is going to move down more, and they have been holding through what they thought was a short Retracement. Most of these orders will be Sell At Market SAM. Sell Short Traders are anticipating that the stock is going to move down, and can place a variety of orders just like the buyers. Buyers and Sell Short Traders are both entering the trade. Buy-to-Cover and Sellers are exiting the trade. It is the mix of these kinds of buying and selling, coupled with the kind of investor or trader and the size of their share lots that causes money flowing in and out of a stock. 

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Webinar Lessons.
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If the buyers are mostly large lots and the sellers are mostly small lots, then who is in control? The answer is the buyers purchasing large lots. This is because at some point there will not be enough small lot sellers and those who are selling short will turn and start Buying-to-Cover, creating more of a shortage of sellers. Consequently this will put more pressure on the buy side.

There are always late comers to a stock run, and they are usually small lot buyers. As the stock moves up in price, more of the small lot buyers will step in pushing the price up even further. Most small lot buyers typically use a Buy-At-Market order which is the worst kind to use to control the entry price. As the stock moves up in price the last of the Sell Short Traders will panic and Buy-to-Cover, causing the stock to gap up or jump even higher. This then triggers the large lot buyers, to start selling for profit. As profit taking begins, the stock dips in price. This causes the odd lot buyer to rush into the stock and buy because they have been told to “Buy-on-the-Dip." The news media by now has been talking about this stock and its great run, so consequently the odd lot uninformed investor finds the dip irresistible and buys on pure emotion without any analysis of the stock. This causes the final gap up and exhaustion pattern.

Now while all of those odd lot latecomers are buying, who is selling to balance the equation? Market Makers are selling short, and smart money giant Institutions who were the first to enter are selling to take profits. Suddenly the large lots are now to the downside and what happens? The control switches to the sellers who are moving larger lots. Now money is flowing out of the stock, yet the price may go up a bit briefly. 

Large lots are usually wiser investors and traders, who know more than the other investors and traders. They are the Mutual and Pension Funds that have access to information often not yet available to Independent Investors and Retail Traders. It can be assumed that the smaller the lot size, the less the investor and trader knows and understands about the market. When the large lots dominate the buy side, money is flowing into the stock and they are controlling the price action. As smaller lots move in a shift of power occurs and the large lots move to the sell side, thus money is flowing out of the stock. The price will probably continue to move up for a brief period of time, but it is at risk of a sudden collapse when the odd lot buyers dry up and no more buyers come into the stock. 

As the stock collapses and reaches a price or equilibrium near a base or bottom, those smaller lots who held through the collapse reach an emotional point of extreme pain of loss and begin to sell in panic. In response the large lots and Market Makers switch roles again, Buying-to-Cover their profitable shorts and buying to hold as the stock moves up again. 

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Summary

So money flowing in and out of a stock is constantly occurring and every time you take a position in a stock, there are three other positions at the same time in that same stock. You need to be aware of each of those, and make sure that you are with the right group. Most of the time, traders who are having problems with their trades are in the wrong group. 

Smart money which are the large lot Mutual and Pension Funds have their own agenda that has little to do with the small lot Independent Investor and Retail Trader. They are not aware of you, so keep your trading in perspective. This is a huge advantage that most Independent Investors do not appreciate, because being invisible is a good thing. Trading as an individual is a good thing too.

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

Trade Wisely,
Martha Stokes CMT

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

©2016 Decisions Unlimited, Inc. All Rights Reserved.
TechniTrader is the Registered Trademark of Decisions Unlimited, Inc.

Disclaimer: All statements, whether expressed verbally or in writing are the opinions of TechniTrader its instructors and or employees, and are not to be construed as anything more than an opinion. Student/subscribers are responsible for making their own choices and decisions regarding all purchases or sales of stocks or issues. At no time is any stock or issue on any list written or sent to a student/subscriber by TechniTrader and its employees to be construed as a recommendation to buy or sell any stock or issue. TechniTrader is not a broker or an investment advisor, it is strictly an educational service.

How Dark Pools & High Frequency Traders Effect Stocks & Options

Basics For Beginner Investors & Traders

The two most dominant Market Participant Groups in the Stock and Options Markets today are Dark Pools and their counterpart the High Frequency Traders. Dark Pools is an ominous and dubious title for the giant Mutual and Pension Funds venues, where these giant Institutions buy and sell millions of shares of stock. Dark Pools are a benefit to both Independent Investors investing for their retirement, and for Retail Traders who are trading stocks for monthly income.


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Dark Pool orders are controlled bracketed orders which control price in such a way that the footprint of these giant Institutions which are long-term investors is easily identified on a stock chart, even if an Independent Investor or Retail Trader is new at reading stock charts. Dark Pool order systems are automated, which alters Candlestick Patterns.

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High Frequency Traders are not individual traders. They are companies that have written computer algorithms. These are designed to search through millions of news articles to find news alerts, or search the mega order flow of millions to billions of orders to find anomalies in order flow that then trigger an automated millisecond trading activity. They can trade as many as 90,000 orders in one minute. The Independent Investor or Retail Trader order fill requirement must be executed by the broker within one minute, to one and a half minutes.

High Frequency Traders have been in the news, but most Independent Investors and Retail Traders are severely misinformed as to their role and true risks which they created. In addition Independent Investors and Retail Traders do not understand the role and benefits of the Dark Pools. Watch the Balance of Power webinar about Dark Pools and High Frequency Traders.

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Independent Investors and Retail Traders are often misinformed or uninformed about the most influential Market Participant Groups buying and selling stocks and options. This causes them to be at higher risk of whipsaw trades, poor entries and exits, weak run action, buying too late into a stock, or selling at the wrong time.

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

Trade Wisely,
Martha Stokes CMT

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

©2016 Decisions Unlimited, Inc. All Rights Reserved.
TechniTrader is the Registered Trademark of Decisions Unlimited, Inc.

Disclaimer: All statements, whether expressed verbally or in writing are the opinions of TechniTrader its instructors and or employees, and are not to be construed as anything more than an opinion. Student/subscribers are responsible for making their own choices and decisions regarding all purchases or sales of stocks or issues. At no time is any stock or issue on any list written or sent to a student/subscriber by TechniTrader and its employees to be construed as a recommendation to buy or sell any stock or issue. TechniTrader is not a broker or an investment advisor, it is strictly an educational service.

How To Choose The Right Stock Market Course

Beginning Trading Information


There are hundreds of individuals and companies selling stock training on the internet. It can be a daunting task to find the Stock Market training course that is right for you. Often times the training is merely a strategy which works some of the time, but causes losses most of the time. Brokers often offer free training but this education is often designed to make money for the broker, rather than the trader. Charting software companies also offers training but this is usually specifics on to how to use their charting software product, rather than a complete trading course for traders.
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Here are some tips on how to choose the right Stock Market Course for you:

1. It takes more than just a couple of strategies to be successful trading stocks. Regardless of whether you want to Position trade, Swing trade, or Day trade strategies by themselves will not make you consistently successful.

2. Decide what type of trader you are going to be:

2.a. Hobby Trader who trades for the fun of it. They are not concerned about making money consistently, and are satisfied with a success rate of 40-50%.

2.b. Part-Time Trader who wants to augment their income by trading one or two days a week. Part-Time Traders usually have a full time job, are retirees, or small business owners. Part-Time Traders need to find a course on Position Trading rather than attempting to learn Day, Swing, Futures, FOREX or other higher risk Trading Styles that have huge time demands.


2.c. Full-Time Trader who is trading stocks as a business. The IRS does have a classification for “Trading as a Business” where the Full-Time or Semi-Professional Trader treats his trading as a small business and can deduct trading expenses, computers, office space, etc. as business expenses.
  
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Webinar Lessons
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When you have chosen which type of trader you want to be, it will automatically eliminate many of the training offerings out on the internet. This is because most of the training on the internet including Webinars and live Seminars are not taught by Professionals with credentials, but are training created by Retail Traders. Unfortunately most Retail Traders do not have sufficient educational or financial market backgrounds to be able to teach other Retail Traders successfully. 

Ask for the credentials of the instructors, make sure they have more than just some personal trading experience. As an example, do they know the current Market Structure? Does the training cover the 9 Market Participant Groups, the 6 Market Conditions, Dark Pools, High Frequency Traders, and modern automated Market Order types? Often times what is being taught is a very basic Strategy that has no empirical evidence, OR that only works some of the time.

Here are additional tips on how to choose the right Stock Market Course, and reasons why it is important to get started in the right direction with the right course:

1. Everyone learns differently. Does the training have different formats so that you can choose what the right format is for your personal learning preferences.

2. What kind of Support, Guidance, Mentoring and other training assistance does the company provide? Is everything verbal, or do you get written documentation that you can refer to later on when you need to review?

3. Check out the person or company rating with the Better Business Bureau BBB. This is the best place to get information about a company, and how they treat their customers.

4. Be wary of money back guarantees. These are come-ons full of legal phraseology that limits the guarantee. Education is not something that is guaranteed. No university guarantees a graduate will get a job. So be suspicious of companies that do offer guarantees of trading performance.

5. How long ago was the training or theory of trading developed? The Stock Market has changed more in the past decade, than the prior 100 years. Using a strategy, theory, or investment advice written during the 1970’s, 80’s, or 90’s means using an outdated, obsolete training program. The market of those decades is long gone. Make sure the course you choose is current for the modern automated marketplace.
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Summary

How to choose the right Stock Market Course is also about the instructors and educators. Do they have an educational background? Does their training make sense and is it a complete process, and do you understand how they teach? All of this matters, because finding the right teacher makes a huge difference in your success.

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Trade Wisely,
Martha Stokes CMT

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

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