Not All Methods Of Improved Trading Use A Stock Screener
What I'm about to show you has nothing to do with a stock screener. This one little secret can totally improve your trading accuracy in any market.
I was told this secret by a retired institutional trader several years ago. It still works today. It seems to good to be true. Using this secret I have increased my trade accuracy to nearly 80%. Every week I use this secret. I'm going to show you exactly how to duplicate this secret and improve your own trading accuracy.
No doubt you have heard the phrase "two minds can think better than just one". I have a new phrase for you as it applies to this trading secret: "4 Professional Minds Can Crete What 90,000,000 Unprofessional Minds Can Not"
There is more than 85 million traders in the U.S. alone and yet none of them have discovered the secret I'm about to tell you. Is this because most traders are ignorant? No it is not. The reason is that institutional investors have a range of tools that give them better insight into the market and in spotting trends before the average trader.
Weekend Effect: Trading Activity is Lower On Friday and Monday and Returns Are Negative On Monday
Way back in 1988, a genius called Miller proved that returns are usually negative on any given Monday. Miller said that this anomaly might just be the result of small investor trading activity. In another study done two years later, Lakonishok and Maberly (1990) and Abraham and Ikenberry (1994) used odd-lot trading as a measurement for what smaller, non-institutional investors were doing and found evidence that supported the Miller hypothesis.
Volume is less on Friday's because institutional traders are not buying as evidenced by the absence of large-size trading activity. In fact, institutional traders will close out their trades on Thursday or the very latest on Friday because they do not like to hold open positions over the weekend.
Trading is lower on Monday for large-lot trades. Also, small traders have more sell orders on Monday morning compared to other days of the week. If small-size trades reflect individual investor activity and large-size trades reflect institutional investors then both types of investors play a role in the negative return on Monday. The individual traders directly contribute through their trading and institutional traders indirectly contribute through their withdrawal of liquidity on the proceeding Thursday or Friday. Institutions indirectly contribute by their absence on Friday and Monday, which reduces liquidity in the market.
You will be most accurate with your trades on Tuesday through Thursday. You will find that your accuracy rate of successful money making trades goes up if you take an entry on Tuesday and exit on Thursday or at the latest Friday.
Because markets have a tendency to dip on early Monday trading, don't get stopped out of your trade too quickly based on Monday trading activity. Monday's have the highest occurrence of head fakes to the downside. - 23218
I was told this secret by a retired institutional trader several years ago. It still works today. It seems to good to be true. Using this secret I have increased my trade accuracy to nearly 80%. Every week I use this secret. I'm going to show you exactly how to duplicate this secret and improve your own trading accuracy.
No doubt you have heard the phrase "two minds can think better than just one". I have a new phrase for you as it applies to this trading secret: "4 Professional Minds Can Crete What 90,000,000 Unprofessional Minds Can Not"
There is more than 85 million traders in the U.S. alone and yet none of them have discovered the secret I'm about to tell you. Is this because most traders are ignorant? No it is not. The reason is that institutional investors have a range of tools that give them better insight into the market and in spotting trends before the average trader.
Weekend Effect: Trading Activity is Lower On Friday and Monday and Returns Are Negative On Monday
Way back in 1988, a genius called Miller proved that returns are usually negative on any given Monday. Miller said that this anomaly might just be the result of small investor trading activity. In another study done two years later, Lakonishok and Maberly (1990) and Abraham and Ikenberry (1994) used odd-lot trading as a measurement for what smaller, non-institutional investors were doing and found evidence that supported the Miller hypothesis.
Volume is less on Friday's because institutional traders are not buying as evidenced by the absence of large-size trading activity. In fact, institutional traders will close out their trades on Thursday or the very latest on Friday because they do not like to hold open positions over the weekend.
Trading is lower on Monday for large-lot trades. Also, small traders have more sell orders on Monday morning compared to other days of the week. If small-size trades reflect individual investor activity and large-size trades reflect institutional investors then both types of investors play a role in the negative return on Monday. The individual traders directly contribute through their trading and institutional traders indirectly contribute through their withdrawal of liquidity on the proceeding Thursday or Friday. Institutions indirectly contribute by their absence on Friday and Monday, which reduces liquidity in the market.
You will be most accurate with your trades on Tuesday through Thursday. You will find that your accuracy rate of successful money making trades goes up if you take an entry on Tuesday and exit on Thursday or at the latest Friday.
Because markets have a tendency to dip on early Monday trading, don't get stopped out of your trade too quickly based on Monday trading activity. Monday's have the highest occurrence of head fakes to the downside. - 23218
About the Author:
Written Author is Lance Jepsen. I hope your stock trading accuracy totally improves after reading this article. For more secret stock trading tips visit stock screener
posted by X - Men @ 3:06 AM
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