Trading the Small Caps

Outstanding Shares and Momentum Runs

Most Retail Traders only trade big cap stocks. This is because they depend mostly on news for finding stocks to trade. It can also be due to relying upon Industry or Sector selections, often missing out on the underlying stocks that are moving with momentum but are not a major index component. 

However with the power of Scans, it is easy to find stocks for trading the small caps that are poised to move up with huge momentum gains.

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How Technical Patterns Reveal Hidden Liquidity Draws Caused by Dark Pool Quiet Accumulation

How Technical Patterns Reveal Hidden Liquidity Draws Caused by Dark Pool Quiet Accumulation

Beyond the Basics of Candlestick Patterns 

Quiet Accumulation is a very precise pattern that is easily recognized, once a trader learns to look for it. Quiet Accumulation occurs when Buy Side Institutions are slowly and incrementally buying a stock over an extended period of time, often many months to over a year.

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How to Exit a Stock Trade at the Correct Technical Level

Swing Trading Speculative Runs

Most of the time Retail Traders are focused on finding stocks to trade but spend scant time on assessing risk, proper stop loss placement, trailing profit stops, and determining when to exit the trade especially as a stock goes ballistic.

Since we are in the final stages of a Great Bull Market that has been underway since March of 2009, it is imperative that all Retail Traders learn to exit a speculative run at the correct time to insure the highs profits possible.

Many traders have been bludgeoned by the slower paced market activity over the past few years and so they have abandoned the normal Swing Style Trade rules for Stocks, Exchange Traded Funds ETFS, and Option premium trading. 

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Trump and Stock Charts

Momentum Speculative Runs

There is no question that anything Trump tweets about any company that is publicly traded can impact the stock price, often with high volatility or sudden huge speculative emotional reactions.

This is a new twist on market manipulation and volatility that the professional side is discussing and debating as the new White House will soon take over. The Professionals are also taking advantage of the situation regularly.

Charts often reveal aspects of the Market Participant Groups that are overlooked by Retail Traders, who are unaware of what they need to focus on. All too often the Retail Trader is strictly looking for a stock to trade rather than seeing the bigger picture.

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Recognize Platform Compression Patterns for Early Entries

Trade with the Professional Traders for Higher Profits

The stock for PacWest Bancorp (PACW: NASDAQ) recently had a strong “Pop Out of the Box” candlestick pattern, after a Platform compression pattern. Preceding the compression from August – October, the price action was a Trading Range. Often times Trading Ranges compress into a tighter formation when Accumulation is underway.

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Price, Volume, and Accumulation/Distribution AMZN chart

Identifying Market Participant Groups by Patterns  

Indicator Accum/Dist found on StockCharts was designed to help track the large lot activity versus the small lot activity. Decades ago when the concept of distinguishing between the large lots versus small lots started being discussed by the Sell Side Institutions, the Stock Market was an entirely different Market Structure.
Almost all orders were filled on the exchanges via Market Makers. Few were filled off the exchanges via dealers and professional side brokers. The only access the retail crowd had was through a broker who typically charge $75-$100 per transaction. 

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Martha Stokes: AAPL Analysis Part 2 Trading Styles AAPL chart

The Difference Between Learning and Applying Knowledge

Many of you watch hundreds of videos or webinars, read every article or commentary but still are not making consistent profits.

The problem is often in applying what you have learned. Educators and professors all face the same dilemma when teaching which is how to train their students to apply what they learn. AAPL is a good example. It is a popular retail stock, with adequate liquidity for just about any Trading Style

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Martha Stokes CMT: AAPL Analyzed

Which Market Participant Group is in Control of Price Right Now

This is a training lesson to show what many of you are missing in reading a stock chart. Usually Retail Traders are all about trading a big name stock that shows up on recommendation lists, guru’s picks, or social media sites. However these methods of finding stocks immediately increase your risk of High Frequency Trading Firms HFTs front running, Retail Broker spread exploitation, and Professional Trader profit taking.

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