What Are Dark Pools & HFTs? - Candlestick Patterns Explained by TechniTrader®

How They Are Changing the Stock Market

The retail news and professional news feeds offer extremely opposing perspectives on what is going on with stocks in short-term trading, liquidity, execution speed, and the overall internal Stock Market Structure. While the retail side of the news media focuses on basic news that it believes will encourage Retail Traders and Investors to buy stocks, the professional side concentrates on the actual viability and functionality of the market.

Dark Pools and High Frequency Traders (HFTs) are at the center of most commentary on the professional side of the Stock Market. In one form or another, these two distinctly different Stock Market Participant Groups are at the heart of most issues. Unfortunately, most Beginner Stock Traders have never heard of these powerful groups or have been told plenty of misinformation about Dark Pools and High Frequency Traders.

Dark Pools are the most important Stock Market Participant Group. They are the Institutional Investors for Mutual Funds and Pension Funds who control $100–$120+ trillion and increasing assets under management worldwide. Since the US has the bulk of the giant Buy Side Funds, it totally dominates globally with this group.

To put things into perspective, the world’s Gross Domestic Product (GDP) is approximately $75 trillion; therefore, the Buy Side Institutions hold more assets under management than the total Gross Domestic Product for the entire world.

High Frequency Traders are companies that use computer programming to search for Dark Pool Quiet Accumulation, and then they execute 3,000–6,000 orders per second on the millisecond scale.

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Trade Wisely,

Martha Stokes CMT

Chartered Market Technician
Instructor & Developer of TechniTrader Stock & Option Courses