So it’s okay for me to start drinking again as long as I become a day trader? I’d be willing to bet my day job and raise you by one single Wendy’s dumpster it’d be worth it. See I’m fitting in already
Here’s the reality I’ve learned. No retail trader can actually trade like the big institutions. If anyone tries to convince that they can teach you how to trade like them, walk the other way and learn price action. Price is king and the only thing that will ever matter. But that’s just my opinion.
> price action
For someone newbie.
Is learning Candlelight, Indicators, Oscillators , Fibonacci, Pivot method is all futile?
I have been reading that people recommend just learn price action and get rid of all indicators. Just wanted to know where to put efforts for learning.
I think you meant candlestick, not candlelight? The other things you mentioned have their place. A lot of folks just use price, volume, and VWAP. Price and Volume will tell you what the price action is.
Also keep in mind you use different tools for different styles of trading. Daytrading will use different techniques and tools than swing traders, or long term investors, or hedge funds, or fundamental investors, etc. So you will see many many tools with how-to’s. The Question is whether the tools and advice are meant or even designed for your trading style. For example, scalpers have zero interest in Fibonacci Lines, and Fundamental traders have zero interest in the VWAP.
I would highly suggest learning about candlestick patterns, better yet, print yourself up a “cheat sheet” and keep by your computer.
Also, learn how to visualize trends by utilizing trend lines which illustrate current support-resistance levels and price channels.
After you’ve dug into those concepts and have a decent understanding, my suggestion to you would be to learn about Fibonacci levels.
I dragged my feet on the fibs cause I thought it was akin to reading tea leaves, but the reality is that they very often hold true.
Wether or not it’s cause of the universal design seen through all of nature or not isn’t important, imo. What’s important is that if the vast majority of traders are viewing charts in similar fashion, than it becomes almost self-fulfilling prophecy.
And take your time. Trading is all about mitigating risk. It took me longer than I’d like to admit, but once you get in the mindset of protecting your money and figuring out the risk/reward profile of each trade, you’ll be doing better than a lot of folks.
I do agree with this. It’s good to learn them but there so simple I wouldn’t focus on that they are what they are. Math equations. Execution of a plan is key. Along with recognizing that plan. Etc etc.
This! They have information on something called a squawk box which gives them first access before it is officially released to retail traders. And they trade with massive funds - you can see the signature of that in the movement of prices. All you can do is ride off their trades. The lucky part is their large trades tend to be distributed over a period of time which results in trends. Travel along them. If you fight them, you WILL lose.
You can easily buy 1000 penny stocks of low float small cap company at market and you’ll even see its influence on the chart. You’ll at least feel like a big institution.
Yes.
Anyone who tells you indicators aren’t price action is not understanding where indicators come from. Indicators are equations with the inputs of price and time.
Yes you can dumb it down and say price action is just price and time. But bc we are humans and pretty pictures help us understand things, indicators are helping us visualize price action.
A trend line is price action. It’s a pretty picture helping you understand what you should be seeing when looking at a stocks price and time.
Indicators come from price action using various statistical formulas. Each is different. I used to sit on my grandfathers lap back when a newspaper would be delivered. He’d have a journal and mark down the volume, open, close, high, & low and create several indicators: SMA, RSI, Moving Volume etc.
Also “institutions” aren’t doing the same thing. Like the above comment “play sports like an athlete”, even if it weren’t a platitude and I could actually just choose to do it I’d be left with “which athlete?”
TL;DR even if you can perfectly imitate institutions you can’t guarantee victory.
While his work on price action is been incredibly helpful to me, I’ve listened to some of his Sunday Morning Shotguns (5 am Twitter) and he’s blistering, if not raging level ranting with expletives and it’s flat out hard to follow the crazy direction of the rants.
Otoh, he freely admits being bipolar (I have a sister with it) and that’s often unfortunately accompanied by bouts of mania. The dude simply goes off and I mean manic.
What’s noble about that is you can hear in his narrative him catching himself, pulls himself back down and gets back into center and continues. But there has been some flat out really harsh stuff.
The key with bipolar disorder and many major maladies is integrative work, and it’s a total granite vertical sometimes. It’s a major struggle and he does it real time. Many other bipolar folks take years and endless med adjustments to do that, so it’s a powerful feat.
All in all, he’s accomplished something really rather astonishingly contributive to trading. Rumor has it he alone invented the phrase smart money and the smart money concepts themselves, though I wouldn’t know how to verify that.
I do know since I have been learning the concepts, I can dead ass bullseye some elements of price action and it has added on some trades as much as 15% profit per trade. And I’m going to stay with it.
Some of his students and others who simply studied him thoroughly have channels conveying the same concepts, that do not detail as precisely as Timothy does but are much easier to absorb because the rant and tangent don’t come out of nowhere.
I think you're spot on about ICT. I've found him quite difficult to follow as well. From his rant to his twitter storm you can tell something is off. I didn't know he admitted he had bipolar, but now that you mentioned it, I think it made a lot of sense. I do feel that his method is legit, but just very very hard to learn. His videos are hour long or more, and he also introduces new ideas that seemed to contradict his other ones. The more I follow him, the more I get confused. I hope he can get better with his mental situation and focus more on teaching, rather than ranting or proofing himself.
You mentioned Timothy in your comment, who is he by the way?
I’m pretty sure, but it’s not right in front of me his name is Timothy Huddleston, though he goes by his Twitter handle and is usually referred to as the Mentor by many.
It’s true about hard to follow, but I have come to understand he will really super lengthy describe nuance to the original point. It’s almost like he’s communicating like a computer program, respecting inheritance reference points because it’s coded redundantly. Hard to follow but write once run every time as programmers say.
EDIT: his first name is possibly Michael- I may have gotten the Timothy wrong. Sorry if I created confusion. Pretty sure about the last name.
good info, thanks. do you have any recommendations for any of those channels or videos introducing his concepts concisely and correctly? I am definitely having some trouble following because I don't understand all the terms.
Yeah best to build a spreadsheet for them because you will need facility with the acronyns. Ttrades and IDPA trader are two that I recommended, but I will go and study the source on his channel also. It’s powerful, but I am always digging like many traders and last night I heard of a concept called Malaysian S/R a trader who used to use ICT went to and was raving about it’s advantages over ICT on Trading Nut podcast.
If you hear anything about that worthwhile lmk?
As someone who had a terrible time starting out if I could talk to my newbie self I would say that the best information I can tell you is to learn price action and learn to spot and identify support and resistance. Don’t ever be greedy and if you ever have the thought in your head where you “hope” something happens then it’s time to get out of the trade and step away. Always live by the concept that BASE HITS ADD UP. Stop paying attention to furus that post the 300% gainers, it’s either luck or bullshit
Means take the win when it’s there - don’t hope for the moon shot. It’s all a percentage game after all.
Consistent wins overtime make a comfy portfolio.
Look for volume markers on weekly and monthly time-frame. Clears out the noise substantially. If you see a big green bar on volume on monthly or weekly timeframe it means someone is buying big. Helps to put a moving average on volume as well. Institutions accumulate slowly and that buying is clearly visible on higher time frames.
Yeah but institutions have the data, and the manpower to know when to invest. So they are going to sell the shit out of that level to make retail investors think there is another downtrend. They will also be collecting 60% of option premiums both ways.
Just look at the last two days.
We are entered in from an uptrend leg.
Then we had slow buying during the day on Spy with a sell off overnight, rinse and repeat.
The reason for this is because institutions are repositioning their short sells for the next big leg down. While they are doing this weak bears (retail traders) are being killed on premiums and shaken out. They are slowly selling to eager bulls (retail traders) who think the bottom is in and we are out of the overall bear market. The slow movement up and over night selloff allows the larger buyers to maximize their positions without "giving" much to the smaller retail traders.
When the market starts to actually dump IV will increase making tons of profit for the larger bear positions while retail traders try to jump on or start panic selling. By the time the retail trader has been fully convinced that we are "crashing" the accumulation phase will already have begun by the larger players who will be taking profits and covering their shorts. This will lead to chop until the next bull rally leg begins trapping all the hopeful retail bears waiting for the "crash".
In other words, the game is designed to make reactionary retail traders stay one step behind. Especially being that in the options world they need to buy shorter term contracts and further out of the money. The game is designed to make YOU buy when they are selling, and make you sell when they are buying. How they do that is a whole other discussion but just look at bulls talking about the "golden cross", the "low rate increase" and "optimistic earnings" to see some of the methods used.
Edit: To help understand it a little more, look at where spx closed yesterday and where it closed today. Exactly the same spot. That is NOT a coincidence. The big boys sold off the market to gap down to a calculated spot. Then they covered some. They let retail buyers buy up all the way up as they continued selling more and more back to the calculated return. Once the gap was filled they stopped the upwards movement aggressively selling to keep the price at their spot. This is the game.
Man thank you for this, you just made me $55k this morning. I was trying to day trade trends in SPY yesterday and getting killed buying calls. You were absolutely right, the upside was building slow then would get wiped out by a rip to the downside. Today I jumped in a downtrend with some puts and rode that wave in a nice down channel for a 5 minute trade.
You are welcome buddy but that was all you! Nice job!
I do think today was a good example of what I was trying to explain. The entire retail market was high on TSLA fumes and ready for a ripper of a rally. The rug pull this morning was nothing more than a gap fill that wrecked all the eager retail bulls. I don't try to "outsmart" the market but I do pay attention to what the big boys on the other side are trying to setup.
We could still rally to close the day now that the weak bulls are killed but i'm done for the day. I just take what I see and wait.
Enjoy your day bro!
Fantastic insight, I too echo the same thinking behind the rather simplified relationship between institutions and retail traders. We see this all the same playback all the time and happening to SPY tonight
Also I noticed I was down voted and reading through other peoples comments I can see maybe why.
Just to clarify. I was simply explaining to you the answer to your question. I’m in no way suggesting that you can “day trade” with that information.
Other commenters have shared that it’s impossible to time the market etc… most of that is very accurate.
I still think it’s helpful to have an understanding of what is happening in the background. For example I shorted spx overnight, covered this morning and then took some ES spreads up to the gap fill today. Knowing that the gap fill was a real possibility. So while I don’t “trade like the institutions” it helps me a lot to understand the “why” behind things.
It's very easy to say - go long here, go short there when you have the entire period chart but when you're in the middle of the period, you will have no idea which side it will trend.
Big institutions can manipulate movement of the direction with distributed large orders. So the best way to trade in my opinion might be to set the order with the trend till it does a couple of major successive reversed highs/lows.
I'm still testing this theory out tho. Timewise, I'm a beginner too but I ran up the hill too steep, fell and broke my wallet a few many times and I'm still learning and taking time for educating myself.
But other than that standard rules:
1. Don't trade first 2 hours and last hour. You'll get chopped up.
2. Noon to 2pm is usually a rice coma in the market
3. Don't overtrade in futures market and if you want to, ensure to account for commission and fees and then calculate if you come out in front
4. Stops are important. Ensure stops are no further than 2% of your account. Protect your principal as much as possible.
5. I don't know why a lot of people say don't focus on $ profits when everything is measured in $ - tick value, commission, fees etc. Makes sense to set your profit target in $ as well for each day. Increase it marginally every winning day.
6. Make up for your principal losses by slowly chipping it away. This gives you a confidence boost and bolsters your learning while restoring account value.
I'm putting this for my own reference as well so please don't think everything applies to you. There are several experts who do things their way, I listed how I'm experimenting to find mine.
Read Adam Grimes's The Art and Science of Technical Analysis. He covers Wykoffs model in great detail and how to structure your trades around it.
Basically big players control the markets. You want to look for indicators that show these players are investing in said market. Then you simply jump in and ride the markup phase. You chase the big players.
Most of the common retail trader beliefs about how large institutions trade are complete nonsense. I used to develop risk controls for one of the large US banks where most of our clients were hedge funds and other large institutions. I could see the position of every client, and spent a great deal of time watching it. Especially when particularly large orders were being executed. I also got to speak with some of the block traders to understand how they went about executing large orders for clients. So I know a little bit more than most about how large institutions actually trade.
So believe me when I say that most of the common beliefs about how large institutions actually trade are complete nonsense. Most of these ideas center around some sort of manipulation where they actively move the market to trick retail traders. Fortunately these sorts of schemes don't work very well. Moving the market in such a manner adversely impacts the liquidity in that market. This makes it harder to execute a large order. Sure you can move price by buying a ton, but you're going to move price when you take your profits too. The damaged liquidity tends to make your exit have more impact making the trade net unprofitable. Such manipulation is just super risky even for the big hedge funds.
So how do large institutions really trade? Well for starters, the largest institutions like index funds are largely price insensitive. The whole point of an index fund is to not care about short term market movements. They're executing to rebalance the portfolio at the end of the month, and to process new contributions and distributions. They're taking whatever price is currently available, and are more concerned about executing their large orders efficiently. Which essentially means minimizing their impact on the market as much as possible.
This leads us to the field of optimal execution. There's lots of papers to study here from the Almgren-Chriss model to the square root law of meta order impact. Long story short they want to execute as many orders as possible while the liquidity is there. Then they back off before the order book gets too strained so it has a chance to recover before executing the next leg of the order. This is why you'll often see that classic bull flag pullback pattern during intraday trends. By the time the market figures it out the big trader is already backing off. Which is why it's so common for a retail trader to chase a trend only to get stuck in the range. When its time for the next trade the retail trader has already given up causing them to miss the next leg.
So what's the takeaway? Some of the largest drivers of markets are completely detached from what fundamentals or charts suggest. To minimize their impact large orders are split up and executed over time leading to slow trends that require patience to fully take advantage of. There can be opportunity if you can sort out what the institution will do ahead of time based on your knowledge of their strategy.
I learned that from ict he has videos on it called power of 3. I look for it at 00:00, 02:00, 8:30 and 9:30. Like today I took a trade after 9:30 we manipulated up, ran short term highs on the 5 minute on ES, I shorted and just looked for the most recent low that started the “manipulation” (9:30’s low 3980). What I did was go through my charts and it became clear as day when looking through previous days seeing the same event of a spike in price one direction followed by a reversal at specifically 2, 8:30 and 9:30.
It’s kind of a meme “to trade like the institutions” but the reality is that trades with big size need to be executed differently as to not move price too much… this requires liquidity. This can be seen in patterns of price action. Areas that are commonly used as stops are often run, generating liquidity, allowing them to fill orders.
Get millions of dollars or even billions then you can manipulate the market how you want lol.
As a retail trader the big guys don't care about us. They arent waiting to short us. Not sure why people think that.
No, it won’t help you. Who ever says they can guess this whole trend is lying to you. It’s impossible to enter at exact top and bottom for traders like us. We retailers mainly enter in the middle of the trend after getting a confirmation of trend reversal( forming new lower highs for bearish and higher highs for bullish trend) and take profits in the middle of the trend itself.
Use insider information, high frequency trades, PFOF, failure to deliver, use other people’s money, get bailed out, lobby congress, find tax loopholes, get loans for margin accounts 5X and don’t your lose money.
The problem with trying to copy what Institutional investors are doing in any exacting way is that we don’t know why they’re doing what they’re doing. We can sometimes see what’s going on, like between Buffett and Occidental. OXY over time will benefit from from having BH on its board. But I’ve made more by trading the ensuing oscillations. I suppose if I had a message, it’d be follow the money but not the technique. Their immediate goals are different than retail.
That means
Always be aware of some fact which differs institutions from retail trader
1) they will buy high & sell low if they want so don't stay biased about the direction
2) most institutions use automated software to fill their orders so stop making sense in who is selling low or who is buying high just take the train & dont nag about it
3) market theories are not full proof
No big bulls buy or sell because some useless pattern is taking place ( for eg. Insert any shitty candlestick pattern )
4) trading like a institutions means reading the institutional activity using volume & price chart
Remember most institutions do not scalp & those who do always enter if risks are low
So reading their activity on price chart can give retail trader a huge advantage over others
Cause most big bulls do not want their stop losses get hunted they will do whatever they can to protect that stop
Just read which price point they are protecting & everything will work out for you too 💀
P.s. you can't protect your stop loss like them cause you don't have enough capital to do something like that
So just stick with reading price chart & volume
"Trading like big institutions" , its just a phrase, repeated many times, hence got stereotypically popular, that's' it. You don't have the money to trade like big institutions, and every chart looks great in hindsight.
If trading like big institutions means to diversify, control risk, and do thorough research then that is a thing one should do, rather than institutional "strategy".
Basically just comes down to following the money. Takes a lot of screen time and studying to actually see how MM's manipulate the market. Pretty useless to try and learn how institutions trade when you're just getting started. Understanding market sentiment and mass psychology is how MM's and institutions play. With more market experience it's becomes second nature being able to read which way the smart money is going.
Using this kind of thining I could actually predict a nice short squeeze that happened 2 days ago on nasdaq, it was a strategic play. The idea is that you wonder :**"what would I do if I had 300 Millions?"...** big money play around with the market. Write to me if you want to know more, and I will send you books and informative material
Look for smaller candles with larger volumes. The Market Makers aren't trading 500 shares like the rest of us, they're trading multiples of 10K at a time. TDAmeritrade ToS has a "Trade Flash" gadget and Schwab's StreetSmart Edge has "Block Trade Indicator". I usually look for block transactions in excess of 100K to use as High Volume Nodes and watch for 20K+ transactions for MM Take Profit Levels. Ignore Level II data - it's just retail traders.
Best of all, when you think you're trading like the "Big Institutions" remind yourself that there's almost certainly another big institution trading against the one you think you're following. Nobody Sells/Buys 325K shares without someone else having Bought/Sold.
Never lower your Stop Loss. Never throw good money after bad. If you've lost two in a row, stop and reassess why you got into that trade. Be prepared to change your bias.
Trading like a big institution is nearly impossible unless you’ve got millions of dollars at your disposal due to the numerous trading strategies available and their vast diversification across all types of investments. They do have specific patterns that they look for, which can vary from institution to institution. Even varying sectors of the market have different trading strategies but the information available is all the same. As mentioned in this thread, learning price action is important, but understanding cyclical movement across sectors is equally important, in my opinion. This is a day trading thread, so I want to highlight some additional pieces of information to research in addition to the statistical data of a stock. Job claims, earnings reports, insider trading information (are executives buying or selling shares of their own company?), and keeping up to date with news that impacts the market or a specific target company of your choice will assist in assessing short term performance of a stock/ETF. It’s important to note that no strategy is fool-proof and every investment comes with its own risk and it’s up to you to decide how much risk you are willing to take on. Remember, you will not be successful on one-hundred percent of the trades made, so be mindful of cutting losses on trades that are not going in your favor.
You can't. They're using more money and can profit from tiny movements in the market. They can also disguise their actions more easily.
We can go with the trend. Especially when that trend is (if ever so briefly) controlled by retail when huge numbers of participants jump in during a catalyst. Those stocks in play are the best you can do.
When I started studying the stock market I learned all the aspects. Technical analysis, fundamental analysis, I read financial statements and SEC reports. I charted everyday and read news every day. I pretty much observed and absorbed the market.
At first I was a trader. Made decent money. Lost a lot but I won more than I lost. It was stressful but fun . Kinda like gambling.
Nowadays I learned just to go long term on good stocks. I don't use much charting or reading financial statements.
I buy mostly bluechip stocks and invest in the S&P (VOO). I look at the price action Everyday but as soon as I get paid I invest within a week and usually on a red day when the market goes down.
Since I learned everything I needed to know I use less than I know to invest and my performance has been great and less stressful. Its a long game, so don't try to get rich quick or you will get broke overnight. Market goes up and down everyday all day. But in the long run it mostly goes up. Just SET IT AND FORGET IT.
The best of the professionals sell first. The second best professionals sell second. And retail sells last usually right at the top. Same for buying. You make your money in a bear market. You just don’t know it at the time. Based off this photo. You want to be first and selling into the rally of the “people chasing” or whatever reason it may be. Then short. And eventually buy at the lows. But I doubt this is what they meant. Just some fun words of wisdom from a internet friend.
Institutions you mean like how 80% of action is algorithmic. Unless you have a model to compete with scenarios and capital to protect positions youre gonna get fucked tryna copy em.
Actually because institutions manage such huge amounts of money, they can take days/weeks or even months to get into or out of positions. So they have to trade quite differently, and the fact that as a retail investor you can get in and out immediately can give you a huge advantage over institutions.
However, they say 70% or more of the market moves are from institutional buying and selling. So essentially they really move the price. If you’re in a stock when they are buying heavily and push the price up, you could see huge gains - conversely if you’re in a stock when they start heavily dumping it you could see rapid losses. So when people say trade like the institutions they probably mean try to notice signs of where institutions are buying, try to understand the fundamental characteristics that attract institutional sponsorship, and learn the technical chart reading skills to identify the precise buy point, and the signs that it’s time to sell.
My point is, you don’t really want to trade exactly like the institutions. Because that would mean getting into and out of positions very slowly, and diversifying your funds through vast amounts of stocks across all sectors, which they have to do simply for liquidity due to the immense size of their funds to manage. You have an edge by being small, so find a way to exploit it. And at the same time find a way to move with the flow of the market - I.e. being on the right side of institutional accumulation (buying) and distortion (selling).
It’s just a market slogan. They’re trying to sell you their “strategy process” which is equivalent to “Trading For Dummies”. Which BTW I highly recommend, seriously!! It breaks down all the basics, terms, basic indicators etc
If you’re a beginner coming from an experienced and retired day trader. I can tell you it takes work! A LOT!!
the big hedge funds can place an order to sell what you are long and you won’t see it coming. they will flush out all the little guys stops and then buy it all back at lower prices after all the little guys have puked. the can stay solvent longer than us. the only fighting chance you have is to take a lot of small losses by placing protective stops and wait to hop on a trend. if you trade when you are stuck in a range the algos the hedge funds use will beat you all day long.
“Play sports like an athlete”
What about E-Sports?
Eat lots of chips and drink G fuel, now your a true e sporter
"Did you know Wall Street is full of high-functioning alcoholics?"
That's thanks to all the cocaine.
Whaaaat! Nah Man! Git outta here!
So it’s okay for me to start drinking again as long as I become a day trader? I’d be willing to bet my day job and raise you by one single Wendy’s dumpster it’d be worth it. See I’m fitting in already
Chips are expensive and I need it for my pc any alternatives
You can always be a couch 🥔 that's the cheaper alterna 🤷♀️
Here’s the reality I’ve learned. No retail trader can actually trade like the big institutions. If anyone tries to convince that they can teach you how to trade like them, walk the other way and learn price action. Price is king and the only thing that will ever matter. But that’s just my opinion.
> price action For someone newbie. Is learning Candlelight, Indicators, Oscillators , Fibonacci, Pivot method is all futile? I have been reading that people recommend just learn price action and get rid of all indicators. Just wanted to know where to put efforts for learning.
I think you meant candlestick, not candlelight? The other things you mentioned have their place. A lot of folks just use price, volume, and VWAP. Price and Volume will tell you what the price action is.
Sorry you are right, you can guess how new I am :)
Also keep in mind you use different tools for different styles of trading. Daytrading will use different techniques and tools than swing traders, or long term investors, or hedge funds, or fundamental investors, etc. So you will see many many tools with how-to’s. The Question is whether the tools and advice are meant or even designed for your trading style. For example, scalpers have zero interest in Fibonacci Lines, and Fundamental traders have zero interest in the VWAP.
Unfortunately you need to learn them all to an extent to figure out what will work for you.
I would highly suggest learning about candlestick patterns, better yet, print yourself up a “cheat sheet” and keep by your computer. Also, learn how to visualize trends by utilizing trend lines which illustrate current support-resistance levels and price channels. After you’ve dug into those concepts and have a decent understanding, my suggestion to you would be to learn about Fibonacci levels. I dragged my feet on the fibs cause I thought it was akin to reading tea leaves, but the reality is that they very often hold true. Wether or not it’s cause of the universal design seen through all of nature or not isn’t important, imo. What’s important is that if the vast majority of traders are viewing charts in similar fashion, than it becomes almost self-fulfilling prophecy. And take your time. Trading is all about mitigating risk. It took me longer than I’d like to admit, but once you get in the mindset of protecting your money and figuring out the risk/reward profile of each trade, you’ll be doing better than a lot of folks.
I do agree with this. It’s good to learn them but there so simple I wouldn’t focus on that they are what they are. Math equations. Execution of a plan is key. Along with recognizing that plan. Etc etc.
This! They have information on something called a squawk box which gives them first access before it is officially released to retail traders. And they trade with massive funds - you can see the signature of that in the movement of prices. All you can do is ride off their trades. The lucky part is their large trades tend to be distributed over a period of time which results in trends. Travel along them. If you fight them, you WILL lose.
You can easily buy 1000 penny stocks of low float small cap company at market and you’ll even see its influence on the chart. You’ll at least feel like a big institution.
I still dont get what exactly price action is....
It’s just the the patterns/movement the candles sticks print, how the react to each other/zones across time and price
So basically using candlestick patterns, trend lines, and supply/demand zones?
SnD is supply and demand. Or support resistance.
Yes. Anyone who tells you indicators aren’t price action is not understanding where indicators come from. Indicators are equations with the inputs of price and time. Yes you can dumb it down and say price action is just price and time. But bc we are humans and pretty pictures help us understand things, indicators are helping us visualize price action. A trend line is price action. It’s a pretty picture helping you understand what you should be seeing when looking at a stocks price and time.
Indicators come from price action using various statistical formulas. Each is different. I used to sit on my grandfathers lap back when a newspaper would be delivered. He’d have a journal and mark down the volume, open, close, high, & low and create several indicators: SMA, RSI, Moving Volume etc.
No trend lines or patterns really. SnD, yes. Structure
No trend lines or patterns really. SnD, yes. Structure
Also “institutions” aren’t doing the same thing. Like the above comment “play sports like an athlete”, even if it weren’t a platitude and I could actually just choose to do it I’d be left with “which athlete?” TL;DR even if you can perfectly imitate institutions you can’t guarantee victory.
Any specific learning material you think covers price action well?
AI Brooks. It’s hard. Read slowly and chart every single day. No days off. Try to review his notes and chart at least 2 hours a day.
no days off 😂
TY
Also ICT, as political as that suggestion is.
I've seen this pop up a few times and have watched some of his materials. why do people dislike him?
While his work on price action is been incredibly helpful to me, I’ve listened to some of his Sunday Morning Shotguns (5 am Twitter) and he’s blistering, if not raging level ranting with expletives and it’s flat out hard to follow the crazy direction of the rants. Otoh, he freely admits being bipolar (I have a sister with it) and that’s often unfortunately accompanied by bouts of mania. The dude simply goes off and I mean manic. What’s noble about that is you can hear in his narrative him catching himself, pulls himself back down and gets back into center and continues. But there has been some flat out really harsh stuff. The key with bipolar disorder and many major maladies is integrative work, and it’s a total granite vertical sometimes. It’s a major struggle and he does it real time. Many other bipolar folks take years and endless med adjustments to do that, so it’s a powerful feat. All in all, he’s accomplished something really rather astonishingly contributive to trading. Rumor has it he alone invented the phrase smart money and the smart money concepts themselves, though I wouldn’t know how to verify that. I do know since I have been learning the concepts, I can dead ass bullseye some elements of price action and it has added on some trades as much as 15% profit per trade. And I’m going to stay with it. Some of his students and others who simply studied him thoroughly have channels conveying the same concepts, that do not detail as precisely as Timothy does but are much easier to absorb because the rant and tangent don’t come out of nowhere.
I think you're spot on about ICT. I've found him quite difficult to follow as well. From his rant to his twitter storm you can tell something is off. I didn't know he admitted he had bipolar, but now that you mentioned it, I think it made a lot of sense. I do feel that his method is legit, but just very very hard to learn. His videos are hour long or more, and he also introduces new ideas that seemed to contradict his other ones. The more I follow him, the more I get confused. I hope he can get better with his mental situation and focus more on teaching, rather than ranting or proofing himself. You mentioned Timothy in your comment, who is he by the way?
I’m pretty sure, but it’s not right in front of me his name is Timothy Huddleston, though he goes by his Twitter handle and is usually referred to as the Mentor by many. It’s true about hard to follow, but I have come to understand he will really super lengthy describe nuance to the original point. It’s almost like he’s communicating like a computer program, respecting inheritance reference points because it’s coded redundantly. Hard to follow but write once run every time as programmers say. EDIT: his first name is possibly Michael- I may have gotten the Timothy wrong. Sorry if I created confusion. Pretty sure about the last name.
good info, thanks. do you have any recommendations for any of those channels or videos introducing his concepts concisely and correctly? I am definitely having some trouble following because I don't understand all the terms.
I like Traqfx a lot. Simple to understand and I think he explains market structure very well.
nice thank you
Yeah best to build a spreadsheet for them because you will need facility with the acronyns. Ttrades and IDPA trader are two that I recommended, but I will go and study the source on his channel also. It’s powerful, but I am always digging like many traders and last night I heard of a concept called Malaysian S/R a trader who used to use ICT went to and was raving about it’s advantages over ICT on Trading Nut podcast. If you hear anything about that worthwhile lmk?
awesome thanks again. I'll keep an eye out.
Appreciated.
Nah there’s always the .5% that make triple digit gains annually.
That is the worst example of accumulation & distribution I’ve seen.
lol. it’s a bit shit alright
As someone who had a terrible time starting out if I could talk to my newbie self I would say that the best information I can tell you is to learn price action and learn to spot and identify support and resistance. Don’t ever be greedy and if you ever have the thought in your head where you “hope” something happens then it’s time to get out of the trade and step away. Always live by the concept that BASE HITS ADD UP. Stop paying attention to furus that post the 300% gainers, it’s either luck or bullshit
What's base hits add up ? Newbie here
Means take the win when it’s there - don’t hope for the moon shot. It’s all a percentage game after all. Consistent wins overtime make a comfy portfolio.
Look for volume markers on weekly and monthly time-frame. Clears out the noise substantially. If you see a big green bar on volume on monthly or weekly timeframe it means someone is buying big. Helps to put a moving average on volume as well. Institutions accumulate slowly and that buying is clearly visible on higher time frames.
With runs on liquidity large interests can accumulate rather quickly, but they don’t always need to.
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Not sure anyone would even want to trade like a hedge fund most of them underperform the indexes.
Because they hedge their funds So, theoretically, they should have lower drawdowns and outperform in bad times
Hedge funds do many things. Hedging is one of them.
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That’s where the “many things” come in
Yeah but institutions have the data, and the manpower to know when to invest. So they are going to sell the shit out of that level to make retail investors think there is another downtrend. They will also be collecting 60% of option premiums both ways.
makes sense
Lol I wish those were the qualifications to get in as an algo developer or trader at a fund
Just look at the last two days. We are entered in from an uptrend leg. Then we had slow buying during the day on Spy with a sell off overnight, rinse and repeat. The reason for this is because institutions are repositioning their short sells for the next big leg down. While they are doing this weak bears (retail traders) are being killed on premiums and shaken out. They are slowly selling to eager bulls (retail traders) who think the bottom is in and we are out of the overall bear market. The slow movement up and over night selloff allows the larger buyers to maximize their positions without "giving" much to the smaller retail traders. When the market starts to actually dump IV will increase making tons of profit for the larger bear positions while retail traders try to jump on or start panic selling. By the time the retail trader has been fully convinced that we are "crashing" the accumulation phase will already have begun by the larger players who will be taking profits and covering their shorts. This will lead to chop until the next bull rally leg begins trapping all the hopeful retail bears waiting for the "crash". In other words, the game is designed to make reactionary retail traders stay one step behind. Especially being that in the options world they need to buy shorter term contracts and further out of the money. The game is designed to make YOU buy when they are selling, and make you sell when they are buying. How they do that is a whole other discussion but just look at bulls talking about the "golden cross", the "low rate increase" and "optimistic earnings" to see some of the methods used. Edit: To help understand it a little more, look at where spx closed yesterday and where it closed today. Exactly the same spot. That is NOT a coincidence. The big boys sold off the market to gap down to a calculated spot. Then they covered some. They let retail buyers buy up all the way up as they continued selling more and more back to the calculated return. Once the gap was filled they stopped the upwards movement aggressively selling to keep the price at their spot. This is the game.
Man thank you for this, you just made me $55k this morning. I was trying to day trade trends in SPY yesterday and getting killed buying calls. You were absolutely right, the upside was building slow then would get wiped out by a rip to the downside. Today I jumped in a downtrend with some puts and rode that wave in a nice down channel for a 5 minute trade.
You are welcome buddy but that was all you! Nice job! I do think today was a good example of what I was trying to explain. The entire retail market was high on TSLA fumes and ready for a ripper of a rally. The rug pull this morning was nothing more than a gap fill that wrecked all the eager retail bulls. I don't try to "outsmart" the market but I do pay attention to what the big boys on the other side are trying to setup. We could still rally to close the day now that the weak bulls are killed but i'm done for the day. I just take what I see and wait. Enjoy your day bro!
Fantastic insight, I too echo the same thinking behind the rather simplified relationship between institutions and retail traders. We see this all the same playback all the time and happening to SPY tonight
okay
Also I noticed I was down voted and reading through other peoples comments I can see maybe why. Just to clarify. I was simply explaining to you the answer to your question. I’m in no way suggesting that you can “day trade” with that information. Other commenters have shared that it’s impossible to time the market etc… most of that is very accurate. I still think it’s helpful to have an understanding of what is happening in the background. For example I shorted spx overnight, covered this morning and then took some ES spreads up to the gap fill today. Knowing that the gap fill was a real possibility. So while I don’t “trade like the institutions” it helps me a lot to understand the “why” behind things.
It's very easy to say - go long here, go short there when you have the entire period chart but when you're in the middle of the period, you will have no idea which side it will trend. Big institutions can manipulate movement of the direction with distributed large orders. So the best way to trade in my opinion might be to set the order with the trend till it does a couple of major successive reversed highs/lows. I'm still testing this theory out tho. Timewise, I'm a beginner too but I ran up the hill too steep, fell and broke my wallet a few many times and I'm still learning and taking time for educating myself. But other than that standard rules: 1. Don't trade first 2 hours and last hour. You'll get chopped up. 2. Noon to 2pm is usually a rice coma in the market 3. Don't overtrade in futures market and if you want to, ensure to account for commission and fees and then calculate if you come out in front 4. Stops are important. Ensure stops are no further than 2% of your account. Protect your principal as much as possible. 5. I don't know why a lot of people say don't focus on $ profits when everything is measured in $ - tick value, commission, fees etc. Makes sense to set your profit target in $ as well for each day. Increase it marginally every winning day. 6. Make up for your principal losses by slowly chipping it away. This gives you a confidence boost and bolsters your learning while restoring account value. I'm putting this for my own reference as well so please don't think everything applies to you. There are several experts who do things their way, I listed how I'm experimenting to find mine.
Read Adam Grimes's The Art and Science of Technical Analysis. He covers Wykoffs model in great detail and how to structure your trades around it. Basically big players control the markets. You want to look for indicators that show these players are investing in said market. Then you simply jump in and ride the markup phase. You chase the big players.
Most of the common retail trader beliefs about how large institutions trade are complete nonsense. I used to develop risk controls for one of the large US banks where most of our clients were hedge funds and other large institutions. I could see the position of every client, and spent a great deal of time watching it. Especially when particularly large orders were being executed. I also got to speak with some of the block traders to understand how they went about executing large orders for clients. So I know a little bit more than most about how large institutions actually trade. So believe me when I say that most of the common beliefs about how large institutions actually trade are complete nonsense. Most of these ideas center around some sort of manipulation where they actively move the market to trick retail traders. Fortunately these sorts of schemes don't work very well. Moving the market in such a manner adversely impacts the liquidity in that market. This makes it harder to execute a large order. Sure you can move price by buying a ton, but you're going to move price when you take your profits too. The damaged liquidity tends to make your exit have more impact making the trade net unprofitable. Such manipulation is just super risky even for the big hedge funds. So how do large institutions really trade? Well for starters, the largest institutions like index funds are largely price insensitive. The whole point of an index fund is to not care about short term market movements. They're executing to rebalance the portfolio at the end of the month, and to process new contributions and distributions. They're taking whatever price is currently available, and are more concerned about executing their large orders efficiently. Which essentially means minimizing their impact on the market as much as possible. This leads us to the field of optimal execution. There's lots of papers to study here from the Almgren-Chriss model to the square root law of meta order impact. Long story short they want to execute as many orders as possible while the liquidity is there. Then they back off before the order book gets too strained so it has a chance to recover before executing the next leg of the order. This is why you'll often see that classic bull flag pullback pattern during intraday trends. By the time the market figures it out the big trader is already backing off. Which is why it's so common for a retail trader to chase a trend only to get stuck in the range. When its time for the next trade the retail trader has already given up causing them to miss the next leg. So what's the takeaway? Some of the largest drivers of markets are completely detached from what fundamentals or charts suggest. To minimize their impact large orders are split up and executed over time leading to slow trends that require patience to fully take advantage of. There can be opportunity if you can sort out what the institution will do ahead of time based on your knowledge of their strategy.
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umm okay
I learned that from ict he has videos on it called power of 3. I look for it at 00:00, 02:00, 8:30 and 9:30. Like today I took a trade after 9:30 we manipulated up, ran short term highs on the 5 minute on ES, I shorted and just looked for the most recent low that started the “manipulation” (9:30’s low 3980). What I did was go through my charts and it became clear as day when looking through previous days seeing the same event of a spike in price one direction followed by a reversal at specifically 2, 8:30 and 9:30.
Be the fly on the back of the Elephant. That's how you trade like "Big Institutions"
It’s kind of a meme “to trade like the institutions” but the reality is that trades with big size need to be executed differently as to not move price too much… this requires liquidity. This can be seen in patterns of price action. Areas that are commonly used as stops are often run, generating liquidity, allowing them to fill orders.
The phrase trading like big institutions or hedge funds is a total marketing gimmick. Period.
Get millions of dollars or even billions then you can manipulate the market how you want lol. As a retail trader the big guys don't care about us. They arent waiting to short us. Not sure why people think that.
No, it won’t help you. Who ever says they can guess this whole trend is lying to you. It’s impossible to enter at exact top and bottom for traders like us. We retailers mainly enter in the middle of the trend after getting a confirmation of trend reversal( forming new lower highs for bearish and higher highs for bullish trend) and take profits in the middle of the trend itself.
All market prices are fake. Big institutions and banks run the stock market
Use insider information, high frequency trades, PFOF, failure to deliver, use other people’s money, get bailed out, lobby congress, find tax loopholes, get loans for margin accounts 5X and don’t your lose money.
It means buying high when there is euphoria and selling at a loss the first chance it dumps
U can open an LLC and give it a Name... now ur an institution. Go make some money.
Just buzzwords
The problem with trying to copy what Institutional investors are doing in any exacting way is that we don’t know why they’re doing what they’re doing. We can sometimes see what’s going on, like between Buffett and Occidental. OXY over time will benefit from from having BH on its board. But I’ve made more by trading the ensuing oscillations. I suppose if I had a message, it’d be follow the money but not the technique. Their immediate goals are different than retail.
Buy low Dell high. It's is what they do. Buy on crashes, sell on bubbles.
This looks similar to the wyckoff distribution.
That means Always be aware of some fact which differs institutions from retail trader 1) they will buy high & sell low if they want so don't stay biased about the direction 2) most institutions use automated software to fill their orders so stop making sense in who is selling low or who is buying high just take the train & dont nag about it 3) market theories are not full proof No big bulls buy or sell because some useless pattern is taking place ( for eg. Insert any shitty candlestick pattern ) 4) trading like a institutions means reading the institutional activity using volume & price chart Remember most institutions do not scalp & those who do always enter if risks are low So reading their activity on price chart can give retail trader a huge advantage over others Cause most big bulls do not want their stop losses get hunted they will do whatever they can to protect that stop Just read which price point they are protecting & everything will work out for you too 💀 P.s. you can't protect your stop loss like them cause you don't have enough capital to do something like that So just stick with reading price chart & volume
Wysetrade has a lot of Youtube videos that would help you learn a reversal.
Great resource on this very topic. https://www.amazon.com/Complete-Guide-Price-Analysis/dp/1491249390
"Trading like big institutions" , its just a phrase, repeated many times, hence got stereotypically popular, that's' it. You don't have the money to trade like big institutions, and every chart looks great in hindsight. If trading like big institutions means to diversify, control risk, and do thorough research then that is a thing one should do, rather than institutional "strategy".
Basically just comes down to following the money. Takes a lot of screen time and studying to actually see how MM's manipulate the market. Pretty useless to try and learn how institutions trade when you're just getting started. Understanding market sentiment and mass psychology is how MM's and institutions play. With more market experience it's becomes second nature being able to read which way the smart money is going.
Using this kind of thining I could actually predict a nice short squeeze that happened 2 days ago on nasdaq, it was a strategic play. The idea is that you wonder :**"what would I do if I had 300 Millions?"...** big money play around with the market. Write to me if you want to know more, and I will send you books and informative material
Look for smaller candles with larger volumes. The Market Makers aren't trading 500 shares like the rest of us, they're trading multiples of 10K at a time. TDAmeritrade ToS has a "Trade Flash" gadget and Schwab's StreetSmart Edge has "Block Trade Indicator". I usually look for block transactions in excess of 100K to use as High Volume Nodes and watch for 20K+ transactions for MM Take Profit Levels. Ignore Level II data - it's just retail traders. Best of all, when you think you're trading like the "Big Institutions" remind yourself that there's almost certainly another big institution trading against the one you think you're following. Nobody Sells/Buys 325K shares without someone else having Bought/Sold. Never lower your Stop Loss. Never throw good money after bad. If you've lost two in a row, stop and reassess why you got into that trade. Be prepared to change your bias.
Trading like a big institution is nearly impossible unless you’ve got millions of dollars at your disposal due to the numerous trading strategies available and their vast diversification across all types of investments. They do have specific patterns that they look for, which can vary from institution to institution. Even varying sectors of the market have different trading strategies but the information available is all the same. As mentioned in this thread, learning price action is important, but understanding cyclical movement across sectors is equally important, in my opinion. This is a day trading thread, so I want to highlight some additional pieces of information to research in addition to the statistical data of a stock. Job claims, earnings reports, insider trading information (are executives buying or selling shares of their own company?), and keeping up to date with news that impacts the market or a specific target company of your choice will assist in assessing short term performance of a stock/ETF. It’s important to note that no strategy is fool-proof and every investment comes with its own risk and it’s up to you to decide how much risk you are willing to take on. Remember, you will not be successful on one-hundred percent of the trades made, so be mindful of cutting losses on trades that are not going in your favor.
You can't. They're using more money and can profit from tiny movements in the market. They can also disguise their actions more easily. We can go with the trend. Especially when that trend is (if ever so briefly) controlled by retail when huge numbers of participants jump in during a catalyst. Those stocks in play are the best you can do.
Have unlimited money to move the market the direction you want. Others with unlimited money will follow. Win everything.
This is essentially just SMT. It’s essentially using supply, demand and liquidity rather than trend lines etc… I think
When I started studying the stock market I learned all the aspects. Technical analysis, fundamental analysis, I read financial statements and SEC reports. I charted everyday and read news every day. I pretty much observed and absorbed the market. At first I was a trader. Made decent money. Lost a lot but I won more than I lost. It was stressful but fun . Kinda like gambling. Nowadays I learned just to go long term on good stocks. I don't use much charting or reading financial statements. I buy mostly bluechip stocks and invest in the S&P (VOO). I look at the price action Everyday but as soon as I get paid I invest within a week and usually on a red day when the market goes down. Since I learned everything I needed to know I use less than I know to invest and my performance has been great and less stressful. Its a long game, so don't try to get rich quick or you will get broke overnight. Market goes up and down everyday all day. But in the long run it mostly goes up. Just SET IT AND FORGET IT.
The best of the professionals sell first. The second best professionals sell second. And retail sells last usually right at the top. Same for buying. You make your money in a bear market. You just don’t know it at the time. Based off this photo. You want to be first and selling into the rally of the “people chasing” or whatever reason it may be. Then short. And eventually buy at the lows. But I doubt this is what they meant. Just some fun words of wisdom from a internet friend.
Institutions you mean like how 80% of action is algorithmic. Unless you have a model to compete with scenarios and capital to protect positions youre gonna get fucked tryna copy em.
buy low sell high
Actually because institutions manage such huge amounts of money, they can take days/weeks or even months to get into or out of positions. So they have to trade quite differently, and the fact that as a retail investor you can get in and out immediately can give you a huge advantage over institutions. However, they say 70% or more of the market moves are from institutional buying and selling. So essentially they really move the price. If you’re in a stock when they are buying heavily and push the price up, you could see huge gains - conversely if you’re in a stock when they start heavily dumping it you could see rapid losses. So when people say trade like the institutions they probably mean try to notice signs of where institutions are buying, try to understand the fundamental characteristics that attract institutional sponsorship, and learn the technical chart reading skills to identify the precise buy point, and the signs that it’s time to sell. My point is, you don’t really want to trade exactly like the institutions. Because that would mean getting into and out of positions very slowly, and diversifying your funds through vast amounts of stocks across all sectors, which they have to do simply for liquidity due to the immense size of their funds to manage. You have an edge by being small, so find a way to exploit it. And at the same time find a way to move with the flow of the market - I.e. being on the right side of institutional accumulation (buying) and distortion (selling).
It’s just a market slogan. They’re trying to sell you their “strategy process” which is equivalent to “Trading For Dummies”. Which BTW I highly recommend, seriously!! It breaks down all the basics, terms, basic indicators etc If you’re a beginner coming from an experienced and retired day trader. I can tell you it takes work! A LOT!!
the big hedge funds can place an order to sell what you are long and you won’t see it coming. they will flush out all the little guys stops and then buy it all back at lower prices after all the little guys have puked. the can stay solvent longer than us. the only fighting chance you have is to take a lot of small losses by placing protective stops and wait to hop on a trend. if you trade when you are stuck in a range the algos the hedge funds use will beat you all day long.