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How professional traders trade?

These are the technique used by professional traders to buy and sell their stocksHow professional traders trade

The buying process of professional traders

  1. Buying strength always appear on a downtrend
  2. If stock form the hammer candlestick pattern on the downtrend with high volume this is the early sign of accumulation
  3. Professional traders trying to absorb the selling pressure from the retail traders which is stoping the market to going down this is known as selling climax
  4. The price spread is narrow and volume also decreased
  5. Professional traders only buy when retail traders are selling
  6. When the market falls day after day and enters into a bear market with bad news and fear of further fall starts retail investors start to panic and sell their holdings
  7. Professional traders start accumulating stock when retail investors are selling them holding
  8. After the selling climax volume starts decreasing in stocks for a few weeks or months this is the area of accumulation for professional traders
  9. After accumulation and starting the bull market will move in the opposite direction to throw out the retail investor last time and the bull market starts

The selling process of professional traders

  1. When everyone starts talking about the stock market and newspaper and news channels says it's easy to make money in the stock market
  2. When the market is at its lifetime high and volume increases this is the dangerous sign
  3. when up move price spread is narrow with high volume or market form Doji with high volume it is the sign of the reversal
  4. When retail investors start to think of missing out fear than the market reverse
  5. A widespread down with high volume is a sign of weakness and selling pressure from the professional traders
  6. When professional traders start distributing their stock to retail investors it is in a bull market and places large orders on the market top
  7. Retail investors start buying the stocks at the market top
  8. When professional traders start their selling and finish the selling bear market starts

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Tuesday, 19 November 2019

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