Stock Trading as a Home Business
An area of Technical Analysis that has not made its way into most stock market books, articles, and information available on the internet is to use Dark Pools Candlestick Chart Patterns for higher profits. The reason why Dark Pool technical patterns aka footprints are not yet part of the Technical Analysis standard of teaching is that these are NEW candlestick chart patterns.
Dark Pools did not exist in the 1980s, 1990s, or early 2000s. These are relatively new trading venues for the giant Buy Side Institutions who demanded obscurity due to the rise of the High Frequency Trading Firms in the mid-2000s, after the switch from fractions to decimals.
Basically High Frequency Trading Firms morphed out of the Small Order Execution System Bandits, during the rouge Floor Traders era.
Just as an interesting note, did you know that the Flash Crash of May 2010 was caused by an error in an Institutional order? Instead of using a Time Weighted Average Price order, the Fundamental Trader used a Volume Weighted Average Price order.
Volume Weighted Average Price orders trigger on rising Volume, which then triggers more and more orders. Time Weighted Average Price orders are appropriate for Dark Pool Quiet Rotation™ and Dark Pool Quiet Distribution, as well as Dark Pool Quiet Accumulation.
A Retail Day Trader can no longer see the large lot activity on their Level 2 screens, as nearly all large lots are transacted nowadays on the hidden venues called Dark Pools which are used by giant Buy Side Institutions. However what cannot be hidden, is the easy to identify Dark Pool footprints on the stock charts. The leading indicator Time Segmented Volume TSV is used to identify early entries for higher profits, and is shown in the middle window in the chart example.
There are many different types of Dark Pool footprints the giant Buy Side Institutions leave on charts, due to their preferred professional Order Types.
One of the more common footprints happening is the “Basing Bottom Formation,” which is a brand new type of Bottoming Formation. In order to use Dark Pools Candlestick Chart Patterns for higher profits, the key element in this pattern is to identify the Dark Pool Quiet Accumulation before the stock runs up with an early entry.
Martha Stokes CMT
TechniTrader technical analysis using a TC2000 chart, courtesy of Worden Bros.
Chartered Market Technician
Instructor & Developer of TechniTrader Stock & Option Courses
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