How Do Dark Pools & High Frequency Traders Affect Stocks & Options? - Candlestick Patterns Explained by TechniTrader®

Two Dominant Stock Market Participant Groups Explained

There are two dominant Stock Market Participant Groups in the Stock and Options Markets. The giant Buy Side Institutions use Alternative Trading Systems (ATSs), which create Dark Pools to hide their buying and selling. Their counterparts are the High Frequency Traders (HFTs), which are companies that have written computer program algorithms.

The giant Buy Side Institutions invest Mutual and Pension Funds, buying and selling millions of shares of stock. Their Dark Pools are a benefit to both Individual Investors investing towards their retirement and Retail Traders who are trading stocks for monthly income.

Dark Pool orders are bracketed to control price action in such a way that the footprint of these long-term investors is easily identified on a candlestick chart, even if an Individual Investor or Retail Trader is new at reading stock charts. Dark Pool order systems are automated, which alters the candlestick patterns.

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Trade Wisely,

Martha Stokes CMT

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