econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 13 October 2016

Pro Traders Notice Novice Traders

by Brandon Wendell, Online Trading Academy

Online Trading Academy Article of the Week

When we trade, we need to think and act like the institutional traders who are consistently profitable, not like the novice traders who routinely make bad decisions that lead to their losing money in the markets.

Amateurs will usually chase price and tend to buy when they see new highs or panic sell after prices have dropped. This is ridiculous and no one can make money trading that way.

As an example of how absurd this action is, imagine walking into a car dealership and asking them to double the price before you buy. You would never think of doing something like that, so why should you buy stock after the prices have risen? We need to buy stock like we buy other things in our lives, we buy on sale.

Looking at the chart below, you can see exactly where the novice traders chased the new highs. Their chasing caused large green candles as they sought out shares from elusive sellers. Once novice traders were holding their shares, the professionals pushed prices lower to trigger the stops that those traders placed below their entries.

An explanation of how novice traders are taken advantage of by professional traders.

Once the novices were shaken out of the market, the professionals allowed prices to rise again. This triggered a new round of novice buying from those who were upset about being shaken out. You can see that once their presence was known due to another large green candle, the professionals repeated the process to again take their money!

When we include volume in the picture, you can see exactly when the novice traders jumped in.

What novice traders look like on a price chart.

The novice action of chasing price becomes more obvious in the following chart when you break the chart down into a one-minute time frame. You can see exactly where the flood of novice orders came in as they attempted to buy breakouts to new highs for fear of missing out on potential riches. Unfortunately for them, professionals with trained eyes observed this action and took advantage of it.

Learn to trade like a professional trader.

Price chart showing panic selling by novice traders

This occurs nearly every day on many stocks and even in other financial markets such as Futures and Forex. So, can you avoid being caught with the novice traders? You need to trade like the professionals and the institutions. To learn how to do that, come visit your local Online Trading Academy and be trained in our Core Strategy for trading the markets. Trading like the professionals will increase your chances for success!

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical Investing Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.



You can also comment using Facebook directly using he comment block below.





Econintersect Investing


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
Many (But Not All) Dynamics Improving But Federal Tax Receipts Are Down
The Economic Future of The Berkshires - A Reconsideration
News Blog
The World's Staggering Wealth Divide
FIFA World Cup Brand Worth More Than Ever
What Is Heart Failure? It's Not As Common A Cause Of Death As Reports Would Have Us Believe
Economic Growth, More Debt And More Employment
What We Read Today 16 January 2017
Why Doesn't Capital Always Flow To High-Growth Areas?
Trends In Arbitrage-Based Measures Of Bond Liquidity
Is The Next Recession Around The Corner? Probably Not
Investor Alert: Excessive Trading At Investors' Expense
Infographic Of The Day: Chart: How Every Commodity Performed In 2016
Early Headlines: Asia Stocks Mostly Down, Oil And Gold Up, Dollar Down, Obama On 60 Minutes, Brexit Is Getting Harder, Boeing's Big India Order, Shanghai Breaks Support And More
Most Read Articles Last Week Ending 14 January
Technical Update 15 January 2017
Investing Blog
The Investment Potfolio
Danger Lurks As Extremes Become The Norm
Opinion Blog
Nature Of Debt Differs Between China, Japan And The U.S.
What If US Importers And Exporters Are Largely The Same?
Precious Metals Blog
Gold's 2016 Gain Indicates A 19% Surge In 2017
Live Markets
16Jan2017 Pre-Market Commentary: Wall Street Closed For MLK Holiday, European Markets Lower, Crude Prices Slip, Investors Await Serious Market Correction As Some Bearish Analysts Claim The Sky Is About To Fall
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government





























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved