Real Guru Money Created By Stock Indicator That Is Never Wrong
Ready to learn how to ethically steal TONS of money from other stock market traders with this one indicator?
This is an incredible indicator used by none other than Steve Cohen. Cohen's firm, S.A.C., which derives its name from his initials, is a multi-billion dollar hedge fund company. His actual trading profits have averaged approximately 70 percent per year.
Some 40 traders work under him. He is the king of tracking the volume of any given stock or market.
More amateur traders overlook volume than any other technical indicator.
This article and lesson is about how to READ volume correctly. Don't be arrogant. Even if you think you know everything there is to know about volume, you owe it to yourself to read this article and make sure you know how to use volume to super-charge your stock market profits.
The meeting of minds between bulls and bears are represented in each measured unit of volume. The volume is a still picture of the psychology of the crowd trading a particular stock or market. Rising volume confirms the trend while falling volume questions the trend and whether the dominant group can keep it going.
In a downtrend, rising volume shows that panic is setting in as people run for the exists. It also shows the foolish buyers stepping in to buy betting that the market is going to turn around. Remember, in order for a sell order to execute, there has to be a buyer somewhere. Buying into a downtrend is also known as trying to catch a falling knife. It is usually a bad idea to bet that the current trend is going to change. Don't bet against the wisdom of the crowd. Let some other fool do that. When all the sellers get out, the volume on the downside falls as the downtrend runs out of steam.
When a stock is trending higher, watch the volume. If the volume is increasing into the upward trend, it means that greed is causing more and more traders to take notice of a particular stock and to dog pile into that stock. As the stock continues to trend higher, the volume will continue to build which tells you that more and more traders are piling into the stock and that extreme greed has firmly gripped the market participants. Now keep an eye on the volume. Fear will slowly begin to replace greed as the volume begins to fall off and the uptrend starts to run out of steam.
Volume gives you useful clues in addition to telling you the conviction of a given trend.
If the volume spikes on a single day, it often means that a new trend is about to start, especially if it happens on a breakout from a previous trading range. If the volume spikes 300 percent or more above the average it often means that market hysteria has set in. This occurs when fearful bears decide that a downward move has broken key support and rush in to sell short or when bulls decide that an uptrend is for real on a resistance break and rush in to buy.
A divergence between volume and price usually means that a stock is at a turning point.
When prices rise to a new high but volume falls, it shows that the uptrend attracts less interest. When prices fall to a new low and volume falls, it shows that lower prices attract little interest and an upside reversal is likely. Price is more important than volume, but good traders always analyze volume to gauge the psychology of the crowd. - 23311
This is an incredible indicator used by none other than Steve Cohen. Cohen's firm, S.A.C., which derives its name from his initials, is a multi-billion dollar hedge fund company. His actual trading profits have averaged approximately 70 percent per year.
Some 40 traders work under him. He is the king of tracking the volume of any given stock or market.
More amateur traders overlook volume than any other technical indicator.
This article and lesson is about how to READ volume correctly. Don't be arrogant. Even if you think you know everything there is to know about volume, you owe it to yourself to read this article and make sure you know how to use volume to super-charge your stock market profits.
The meeting of minds between bulls and bears are represented in each measured unit of volume. The volume is a still picture of the psychology of the crowd trading a particular stock or market. Rising volume confirms the trend while falling volume questions the trend and whether the dominant group can keep it going.
In a downtrend, rising volume shows that panic is setting in as people run for the exists. It also shows the foolish buyers stepping in to buy betting that the market is going to turn around. Remember, in order for a sell order to execute, there has to be a buyer somewhere. Buying into a downtrend is also known as trying to catch a falling knife. It is usually a bad idea to bet that the current trend is going to change. Don't bet against the wisdom of the crowd. Let some other fool do that. When all the sellers get out, the volume on the downside falls as the downtrend runs out of steam.
When a stock is trending higher, watch the volume. If the volume is increasing into the upward trend, it means that greed is causing more and more traders to take notice of a particular stock and to dog pile into that stock. As the stock continues to trend higher, the volume will continue to build which tells you that more and more traders are piling into the stock and that extreme greed has firmly gripped the market participants. Now keep an eye on the volume. Fear will slowly begin to replace greed as the volume begins to fall off and the uptrend starts to run out of steam.
Volume gives you useful clues in addition to telling you the conviction of a given trend.
If the volume spikes on a single day, it often means that a new trend is about to start, especially if it happens on a breakout from a previous trading range. If the volume spikes 300 percent or more above the average it often means that market hysteria has set in. This occurs when fearful bears decide that a downward move has broken key support and rush in to sell short or when bulls decide that an uptrend is for real on a resistance break and rush in to buy.
A divergence between volume and price usually means that a stock is at a turning point.
When prices rise to a new high but volume falls, it shows that the uptrend attracts less interest. When prices fall to a new low and volume falls, it shows that lower prices attract little interest and an upside reversal is likely. Price is more important than volume, but good traders always analyze volume to gauge the psychology of the crowd. - 23311
About the Author:
Written by Shawn Tilman. I hope this article helps you improve your trading and make a ton of cash. For more FREE master stock trading tips and advice see stock market
posted by Mr. Forex at
2:56 AM
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