Trade The Trend Stock Traders Put In Hospital
Institutional investors have targeted trade the trend stock traders like us. In bitter, vicious, fashion, Institutional stock traders are selling into the up swings and buying to cover shorts into the down swings to squash the swing range too narrow for the majority of us to make money in. This has made head fakes both to the upside and to the downside over the previous few days.
Something that has scared bears like myself is that a certified higher low is now in place with confirmation today.
Like I wrote about last week, the life cycle of the preceding downtrend channel has completed. We are now in nomad nation where a different channel is taking shape. We do not have enough data as of the close today to determine if we are going into a sideways trading channel, or an uptrend channel.
Whilst there is no apparent trend, then what must trade the trend stock traders do? Go to the sidelines and the security of cash.
Now we have been in cash twice over the previous several weeks and when we bet a new trend had been recognized making us jump back in, it turns out we were head faked and slaughtered. I do not know about you but I'm weary of getting my butt kicked by the better equipped and armed Institutional traders.
Someday we may well have a Traders Bill Of Rights where the battlefield is made just, but for now, inequalities continue to exist concerning institutional and amateur traders such as Institutional traders have access to all limit orders, they have direct access to market makers and can make non-open market trades, they have access to a faster stock data feed and can use high frequency trading schemes against us, and they use the media groups to manipulate public opinion about a business or the economy as a whole.
What is additionally key is that on the daily chart of SPY, bulls have re-taken the 50 day MA although we still need verification of the break.
The blunder I made was leaping back in this stock market twice now and being wrong both times. This suggests that I need to raise the bar for what I believe to be a new trend forming. That means that I must find more bullish or bearish indicators on the charts than I have in the past. Even a Bearish Head and Shoulders Top and a Burial Cross was not adequate to put my money on the short side. Not even a Bullish Downtrend Channel break was enough to bet my money on the long side. Each and every one of these indicators have meant nothing over the last several weeks. The only thing that these indicators have accomplished is to pull us trade the trend traders from off the sidelines and into a trap where we have been slaughtered by the thousands.
Article Source: FxTradingStock.com
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Breaking stock trading news, technical analysis videos, and lessons. Check out trade the trend
by: Sean Phelps
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Word Count: 495
Date: Tue, 27 Jul 2010
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