Institution Market Participant Groups Buying Or Selling Stock
The TechniTrader TT Flow of Funds TTFF indicator was designed to help Retail Traders and Individual Investors see when giant Institutions are moving into or out of a stock, for MetaStock users. There are currently over 12,000 Institution Funds trading stocks and many have billions of dollars to place. Their presence in the stock market is dominant with over 80% of all order activity being some sort of Fund buying or selling.
Therefore if a Retail Trader or Individual Investor simply uses MACD, Bollinger Bands, Stochastic or another other Price Indicator they are missing a huge portion of analysis needed in order to be consistently successful. They are not using an indicator capable of showing if the giant Institutions are buying or selling the stock.
The TT Flow of Funds indicator tracks the Institutions activity, and can help reveal Tops and Bottoms earlier as well as anomalies that warn of a sudden change of Trend.
In the chart example below the TT Flow of Funds indicator is the blue line in the bottom chart window.The red line is a subordinate indicator that helps make the TT Flow of Funds indicator easier to read.
How to read the TT Flow of Funds Indicator:
1. First of all the TechniTrader TT Flow of Funds indicator should be trending upward, with steady relatively consistent upward action as price moves up.
2. Secondly keeping an eye on the subordinate indicator which is a Linear Regression Indicator, we can watch for crossover patterns. During sideways patterns the TT Flow of Funds will oscillate, but during trending patterns it will step upward as the stock moves up. When Flow of Funds ebb or wane, it will be flat with the subordinate indicator hovering tightly.
3. As it moves up a sharp Stairstep Candlestick Pattern emerges, which is the signal that a heavy Flow of Funds occurred, as we see in the chart example. See where the blue line looks like a step.
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Two areas to watch closely for when learning how to read the TT Flow of Funds Indicator, are the extreme high range and extreme low range. These areas are early Topping and Bottoming warnings.
Below is a chart example that shows a Topping Candlestick Pattern, and the green arrow on the left points to the Flow of Funds warning signal. This chart example also shows a Botoming Candlestick Pattern, and the green arrow on the right points to that Flow of Funds warning signal.
The green arrow on the right shows the peaking action of TT Flow of Funds indicating this was a Top, before the Top was confirmed with price action. The V line on TT Flow of Funds as indicated by the green arrow on the left, shows a Bottoming of the stock which is now a strong support level for this stock.
The TT Flow of Funds indicator is one of the TechniTrader proprietary indicators created exclusively for MetaStock Charting Software Users. For information about getting this indicator for your MetaStock charting software send an email to firstname.lastname@example.org.
1. It tracks Institutional activity
2. Warns of a sudden change of Trend
3. Reveals when a huge influx of money occurs
4. Provides early warning for Tops and Bottoms
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Martha Stokes CMT
TechniTrader technical analysis using a MetaStock chart, courtesy of Innovative Market Analysis, LLC dba MetaStock
Chartered Market Technician
Instructor & Developer of TechniTrader Stock & Option Courses
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