By far the most expert Technical Traders in the Stock Market are the Professional Traders Market Participant Group. These seasoned Independent, Floor, and Proprietary Desk Professional Traders are the best of the best at trading using Technical Analysis.

Retail Traders can learn a great deal from their professional cousins about when to enter a stock, how long to hold, where to exit, how resistance will behave, and much more.

How to Find Professional Traders Activity is by looking for their specific footprint on the stock charts, that expose their highly technical decisions when entering or exiting a stock. They are also large lot traders who Swing or Day Trade 10,000 -100,000 share lots at a time. 

This can create a trigger mechanism for High Frequency Trading Firms HFTs, as the Professional Traders draw liquidity from various venues. There are now over 72+ venues for trading stocks in the US which provides a huge flow of liquidity, altering supply and demand in milliseconds as HFTs command a huge capital reserve.

The chart below for Ebay Inc. (EBAY: NASDAQ) is a good example of how to find Professional Traders activity because ithas several Professional Trader footprints for runs that are technically oriented, timed, and executed with precision.

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When the Retail Trader can piggy back a ride on a Professional Trader Momentum Run, they can earn significantly higher profits per Swing Trade. One key element of the Professional Trader Market Participant Group that is totally opposite the Dark Pool Institutions is the fact that they WANT to move price. Their goal is to get the attention of the HFTs AFTER they are in the stock, and then allow the momentum of the millisecond computer crunching order system to propel the stock upward in a vertical Angle of Ascent™ in a Momentum or Velocity Run. Such is the case with EBAY.

First of all the Professional Traders are keenly aware of Dark Pool Buy Zones™ and are able to react quickly when a Buy Zone has been breached. In the chart example of EBAY, a sell order took the stock out of the Buy Zone well below the low of the range, and a reversal happened the next day.

In a bottoming stock, pro trading buying power can move a stock right through moderately strong resistance as is the case for EBAY. The run pauses periodically as the Professional Trader tests to see if Retail Traders and the Smaller Funds Market Participant Group are chasing, which is what they want to happen. Then the stock continues to run as the pros add to their held shares.

The final conclusion is a nice big HFT gap up on a huge Volume surge, then the Smaller Funds Volume Weighted Average Price VWAP orders trigger even more on the huge Volume.

The ideal entry for riding the Professional Trader runs is at a pause or resting day, which allows the Retail Trader to enter at the lowest risk. The requirement should be an order that buys into strength to ensure the run continues.

Summary

Professional Traders are an elite group of traders who are veterans of the Buy Side and Sell Side Institutions. They are savvy, use proprietary trading platforms, and black box indicators. However Retail Traders can learn to identify their early entry signals, to ride with the Professionals and earn much higher profits.

Trade Wisely,

Martha Stokes CMT

www.TechniTrader.com

TechniTrader technical analysis using TC2000 charts, courtesy of Worden Bros. Inc.

Disclaimer: All statements are the opinions of TechniTrader, its instructors and/or employees, and are not to be construed as anything more than an opinion. TechniTrader is not a broker or an investment advisor; it is strictly an educational service. There is risk in trading financial assets and derivatives. Due diligence is required for any investment. It should not be assumed that the methods or techniques presented cannot result in losses. Examples presented are for educational purposes only.