After trying countless indicators and more methods than I care to remember, I was thinking, how do the big guys trade? I doubt, they use all those fancy tools we have at our disposal. However, if they do use them, then which ones and how? Any ideas?
It depends on the "big boy." Go read Market Wizards. For the most part, from what I've seen, the real difference between them and small time traders is the businesslike approach they take, with a lot of effort put into risk management and information flows. As for technical and fundamental techniques, they don't differ significantly from most traders in what they use, though they often have more thorough fundamental research because that stuff's too expensive for the average person to afford. But really, it's most important to understand the fundamental sentiment at the time and trade accordingly. So, if you want to trade like a "big boy" you can. Just start thinking of everything in terms of risk and money management, because that's what they do. They have to because most trade other people's money.
FORGET ALL THOSE TOOLS, they are useless. the only tool a trader needs is his intuition as thats what trading is all about.my style is different then most,i am searching for a catalyst for a long or short position. i lov earnings guidence that is raised.of course i then study the chart and look at likely resistence levels or eveluate whether or not the chart is extended and it will be a sell on the news. i also look at upgrades,analyst reports,and other news in conjunction with charts. it works very well for me. i do the same when i notice a stock breaking out on volume,i jump in and ride it as well. my style took years to pefect mainly because i'm a slow learner but i am doing very well(consistent). i do not look to make a thousand bucks a day,i look for 300-600 on average and if i see a bigger opportunity i will go for it but 300-6-- seems to be my range.
The difference between the big boys and everyone else is largely luck , trading other people's money or a combo of both.
Yesterdays H/L, maybe HLOC. Perhaps a 5 day mental chart. Proof is right there on TV - they're standing right behind Santelli. Most still a 2.0 bac from the night before. Trains have to bring them to work.
I recently had conservations with two institutional traders. One was an index options trader, the other was an oil and gas trader. The options trader said he had no use for fundamentals and research. He made directional plays based on moving averages. The energy trader had great research on hand, but he said he also watched fib levels and price action to determine entry and exit. Take away from this what you will. -Neo
how about the greatest edge of all........inside info ahead of a # or upgrade/dpwngrade call.....it`s always nice to have a head start,especially when capital is`nt an issue. it`s very diificult to turn the other cheek to a big,fat envelope/brief case filled to the brim with benjamins.
after an earnings call when a company raised guidence or reports in line guidence. see if the stock is only up fractionally when the news suggests it should be up more. then look at the bid. if the bid is sitting at one price or moves up slightly but only showing 100 shares; hit it and see if it refresh's. if it does,he is a big player and chances are the stock will be going up the following morning. upgrade or whatever....he knows something. that happened with PAY last month.