Re-ask your question replacing retail and institutions: Do retail traders (however many definitions their may be of that) make their decisions to buy and sell off of the same Indicators, trendlines, volume, price movements, news, etc. that we do??? You'll get the same ol' answer.
I don't think that is the case. While you and I as individuals can purely go technical to trade and ignore all fundamentals and news, institutional fund managers can't go by technicals alone. Sure they look at charts and do some technical analysis. But they must have some sense on the fundamentals and have the "human networking" elements as well. Something that you and I can't achieve. If you are a XYZ fund manager of any caliber, you can get the CEO or CFO of ABC widget company to return your call and give you some sales pitch on how ABC is on track with their next quarter's projection. You can order your team of analysts to prepare you a special market analysis report, or competitive report. You can visit the company on-site to measure how well things are going with a company. You can talk to other fund managers to trade horse stories. You can get a favor from Goldman Sachs to give ABC a rating upgrade (if you want to sell) or downgrade (if you want to buy). You can get your own fund newsletter to print an article to talk up ABC. And you can hire private detectives to do some dirty works too. You can do all sorts of things. Can you and I do those?
@Here2Learn You are making the same assumption as the vast majority of retail traders...that the large institutional traders are all making huge profits. This simply is not true. Many institutions (the banks in particular) make enormous losses on some of their desks. They just make cart loads of dosh from their core business which covers the losses. Remember, it is not always true that big money = smart money. I think you are going too far down down this Us vs. Them path. It's not a case of the institutions having some magical chart indicators that they are keeping secret from the rest of us. When it comes to technical data they are looking at the same T&S and order book data streams as everyone else. But this isn't the point. The big boys main advantage is that they have the ability to manipulate the market. They have influence over the information flow and frequently use their size to move the more illiquid markets. Now, most of the textbooks will tell you to avoid thin markets (days before holidays etc etc etc) but I personally think these are the best markets to trade if you are quick enough to jump onboard with the smart money. You might also benefit from a better understanding of different roles of those on the buy-side and those on the sell-side. Do some Googling mate... All the best
The information people use varies greatly. I felt that you were asking if the various resourses used gave the institutions something that was an advantage not available to amatuers or retail. For me, and I may be ridiculed in the future but no one has criticised me as yet, resources for making money come down to dealing with the compound interest formula. Institutions use it and retail uses it. For some reason institutions go for giving commissions and fees to people who make the intial capital as large as possible. This is not a powerful thing to do, it seems. The institutional people then have to deal with the exponent and the prfit per cycle to get the final captal to be different from the initial capital. What is handy for using these two variables for institutions and for retail? Having lunch was mentioned and so maybe were fleet of foot messengers during war ends. Getting deals applies apparently. I crank up the turns meaning the exponent. By trading the ends of segments on faster fractals I believe there is an advantage that retail has over the institution. Ends of segments are different that ends of imbalances. Segments are price movements and they are big compared to imbalances. By going from 4 to 7 to 15 to 20 to 40 segments a day, you get to do more net capital gain. The profit per segment goes down though. It is not too important in the formula compared to the exponent's power. So what information is used by institutions to affect the exponent and the profit per turn. As I see it, market information used by institutions is not used effectively to make money about none of it changes the exponent or the profit per turn. By looking at annual returns of retail and institutions, there is no comparison. What I see is the compound interest formula relating to the daily ATR. The ATR is an outer band of the many profit segments that occur during the day. You compound within the day and daily. Within the day a segment of profit is a small percent but the exponent is up to 40. Daily you get a multiple of the ATR which is a nice leveraged percentage and that happens about 240 times a year. To look at the daily initial capital is fun because each day it gets bigger. For institutions it is determined by looking in the mail and looking at the issues and redemptions and the capital profits per day less daily expenses. this is almost nothing compared to the intial capital. By compounding it all year, the institution may make 30% commonly on capital. Lets look at the individual. He has a multiple of the ATR and it is leveraged by margin also. An ES trader is looking at so many contracts and per contract, points are made daily by adding profit segments. Look at 40 segments of some small point length. Look at the margin in points. Compare. This gives you a percent to put in the formula and it is repeated 240 times a year. So I feel knowing the timing using market information to do 40 segments is the bottom line. I use leading indicators of the price to make it simple. My fav is the institution's traders whom I call "smart money". they peel off one after another and form a herd. So I just front run the herd with a panel that involves forming bars using a difference of two numbers and I form the bars using a timer. What I read is volatility, drift, and sentiment. Sentiment gives me the right side of the segment. It's beginning and ending is told to me by volatility. I use drift to keep aligned during the day. It turns out that retail uses institutional information to make segment profits and institutions can't use retail to make money; instead they use regression, reversion to the mean, issuances and redemptions and all the "big" numbers on Crays. For common margin 40 trades have to add up to 10 points to double my capital daily. I would say for others it would be 40 points to double. At 1 point a day it takes two months to double. Institutions do not double every two months. Some take years of profits to double. If their capital doubles sooner it is because of issuances being greater than redemptions and things like that. this facet is a sales and report publishing facet. Sales is like story telling. for the retail person, he just times the segments and stays on the side of the market institutional sentiment dictates about 40 times a day. I especially like "settlement" time for institutions. It is when they decide to go into the market to resolve the difference between issuances and redemptions. It begin after lunch and we all see the pm volume pick up a little here and there. It is a fun time for making a lot of points in a segment. It is provided to us retail guys every day like clock work. Here2 learn is hearing 2 learn. So is trading..listen and have fun every day. Lets hear a little criticism on this. It seems too easy.
Compound Interest Formula >> Starting Capital x ( 1 + Profit Per Cycle ) ^ # of Cycles The last component is the killer. Aha.
Yes, the formula proves timing is the more significant part of trading. The M of MADA has the requirement of annotation which, in turn creates the data for using the P, V relationship. The hypothesis set and its parametric measure, very early on in trading, was expressed in the P,V relationship. Game, set, match for choosing the strategy. Annotating gives a multilevel record of nested fractals where the trader chooses to trade a given fractal. It is difficult to explain why choosing to learn from coarse to fine is the best course, but the reason is simple: the ongoing neuro plasticity growth process which creates differentiation. I call it putting the pieces together. I believe the strange convention of betting in markets emerged from the long and old traditions of the wealthy assigning money management to salesmen because the wealthy's schedules were filled with social non financial obligations. The salesmen simply kept their clients happy by betting their money and keeping clients by telling stories. Now, the computer has levelled the playing field and it seems everyone is betting on edges and making about nothing all the time. Very pleasantly, over time, annotating becomes routine (because it uses the same building blocks fractal by fractal) and trading can be moved from channels to traverses to tapes and internals as experience and well timed profit taking skills permit when differentiation of the mind sets in. The end point on any fractal is the FTT. This is a nice and easily observable point in time and a second chance is there usually. simply stated, the FTT is what must come next after all the other events have happened as they always do. All levels start on the same side of the market and as time passes the frequency of reversals fractal to fractal is a factor of roughly greater than three. Slowly traded channels have a sort of subjunctive feel because the coarseness causes chip counters who can't keep their eyes off the PnL do not like holding through non dom faster fractals periods, a condition where trust has not been allowed to appear in the partnership. Gradually "knowing that you know" is allowed to take over and a person sees the next few trades coming down the pipe like a chicken laying eggs one after another when they are ready to be laid. Experts do the eggs like a queen bee: smaller and more frequently. I guess the compound interest formula is the quintessential expression of the difference between incoherence and coherence of any trader's orientation. Incoherence is so persistent in ill chosen trading approaches. Fight or flight. Fear, anxiety and anger. What a drag OODA imposes on the CW trader. It makes a conherent approach impossible to conceive in so many ways. The crayola drill must be a heart breaker for people who choose to not use timing for trading. Some one should call Spielberg so he could set the market timing to sound and light as they do for the chateaux of France. Using the market variables' boundaries seems such a natural way to time the makret. Once the mind is functional, like the result of learning to read well, it seems so practical to move to faster fractals and trade them according to the signals provided to make a higher money velocity as shown by the compound interest formula. Thank goodness the compound interest formula eliminates probability and the future from trading.
LOL! I can see the audience now... <object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/Pg1OiFSsRJk&hl=en&fs=1"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/Pg1OiFSsRJk&hl=en&fs=1" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object> You ROCK Jack!
My imaginative guess? The fact is, the stock sold off an hour before the news was publicly available that the company -- ADPI was the ticker as a matter of fact -- had lost a court decision. We found out that the lawyers hadn't even left the court yet! Your imaginative guess is probably that you make money off anything Gann-related.
Hrrrmmm... Here's a few things about inside information: 1. Most pre-news trades rarely occur these days. It attracts a lot of attention and the watchers usually takes a look at who's making those trades. There are smarter ways to utilize inside information without getting all the attention = moving the market. It's pretty much the same thing as trying to keep your orders anonymous using Dark Pool and Algo. Orders. I used to have my own book at a large Investment Bank, trading as their in-house internal HF. Prior to that, I ran a HF with a bunch of monkey marketers. And prior to that, I traded and developed models for HFs... I've traded and currently trade in an environment between retail and institution. Anyways, my knowledge about "institutions" are 1st hand. 2. 100% of what the institution does, can be done by individuals or independent traders. (please note that I didn't use the word "retail"...) 3. There's plenty of unsophisticated traders in institutions. I know a $200M+ CTA using Tradestation to test their models. There are individuals who are using 30U+ Linux grid just to test their models. There are as many variance of style between institutions as there are with individuals. Though, one thing I can note with Investment bank is that the senior traders teach and mold their newbies to becoming sophisticated. If you're in a prop., most people and firms are out for themselves. In an institution, you'll be working in a team environment. 4. There are prop. divisions in banks where they let the traders trade a specific amount of money like a regular prop. with salary. Those small group of traders get together as an internal hedge fund and grows into a marketed fund.... Plenty of other stuff but my point is... Most of the conspiracy theories about institutions are wrong.