Discover Brain Hack Method To Take Money From Other Stock Traders
Master Wall Street insider swears under oath: this stock market tool is NOT illegal!
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.
Over 50 stock traders work for him. He is a guru of following a stock's volume.
Most non-professional traders either overlook volume, or simply do not know how to use it correctly.
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.
Each measured unit of volume represents the meeting of minds between two individuals: a buyer and a seller. Volume measures shares or contracts that have changed hands. Volume is most commonly shown as a histogram bar below the stock price. Volume reveals clues about the psychology of bulls and bears. Rising volume confirms trends while falling volume means you should question the longevity of the existing trend.
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.
But volume tells more than just the conviction of the current trend. Volume gives traders several useful clues.
A spike in volume on 1 day often signals the beginning of a new trend when it occurs on a breakout from a trading range. A spike in volume like this can also signal the ending of a trend. Very high volume that is 300% or more of the average volume signals market hysteria. This is when fearful bulls finally decide that this uptrend is for real and rush in to buy or it is when fearful bears become convinced that a decline has no bottom and rush in to sell short.
A divergence between volume and price usually means that a stock is at a turning point.
When volume falls as prices rise, it means that the uptrend is attracting less interest. When volume falls while prices fall to a new low, it means that lower prices are attracting little interest and an upside reversal could happen at any time. Price is slightly more important than volume but millionaire traders analyze volume to figure out the psychology of the crowd before committing to a decision. - 23229
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.
Over 50 stock traders work for him. He is a guru of following a stock's volume.
Most non-professional traders either overlook volume, or simply do not know how to use it correctly.
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.
Each measured unit of volume represents the meeting of minds between two individuals: a buyer and a seller. Volume measures shares or contracts that have changed hands. Volume is most commonly shown as a histogram bar below the stock price. Volume reveals clues about the psychology of bulls and bears. Rising volume confirms trends while falling volume means you should question the longevity of the existing trend.
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.
But volume tells more than just the conviction of the current trend. Volume gives traders several useful clues.
A spike in volume on 1 day often signals the beginning of a new trend when it occurs on a breakout from a trading range. A spike in volume like this can also signal the ending of a trend. Very high volume that is 300% or more of the average volume signals market hysteria. This is when fearful bulls finally decide that this uptrend is for real and rush in to buy or it is when fearful bears become convinced that a decline has no bottom and rush in to sell short.
A divergence between volume and price usually means that a stock is at a turning point.
When volume falls as prices rise, it means that the uptrend is attracting less interest. When volume falls while prices fall to a new low, it means that lower prices are attracting little interest and an upside reversal could happen at any time. Price is slightly more important than volume but millionaire traders analyze volume to figure out the psychology of the crowd before committing to a decision. - 23229
About the Author:
By Shawn Tilman. I hope this article helps you improve your trading and make a ton of money. For more FREE expert stock trading tips and advice see stock market
posted by X - Men @ 12:16 AM
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