The Dirty Tricks Of Professional Traders In The Stock Market

By Steve Wyzeck

Are you losing money in the stock market because of false breakouts? This article could completely turn around your trading...

This little known secret has saved me thousands of dollars and now I'm going to share it with you.

You are about to discover the unfair trading tactics that institutional and professional traders use against you in the stock market.

It might get you angry.

It may even make you want to close this page and forget you saw it...

But I'll make you a promise - stick with it, hear me out...

And you will be happy you did.

Because by the time you finish this article you'll have a whole new method for avoiding false breakouts...

First I will talk about what support and resistance lines REALLY are, and then I'll talk about false breakouts.

Seeing why support lines and resistance lines form will help you learn how to better protect yourself against false breakouts.

When most traders buy and sell, they make an emotional commitment to their trade. Their emotions can keep a market trend going, or send it into a reversal.

When a stock falls, some traders jump out and book profits, some traders jump out and take losses, and some traders hold on.

A chart is really nothing more than the result of emotions coming from the crowd of people in that particular stock.

Pain Is the #1 Reason Why Support and Resistance Lines Form

If a trader is still holding on to the stock when the price claws back to his cost basis, he's likely going to sell. He has painful memories of being in this stock and wants to get out as quickly as possible. This selling will temporarily stop a rally. These painful memories are the reason why areas of support and resistance form.

I am going to give you an example so you can better comprehend what I am talking about here. Say a $40 stock sells off and falls to $35. It then stays at $35 for several weeks. Traders get confident that $35 is "the bottom" the longer this level holds. A trader finally buys the stock at $35. Right after buying, the stock drops to $32. Seasoned traders would have set their stop loss right under the $35 level and so would have exited around $34. Amateur traders will stay in their position refusing to take a loss. They will hold this losing position until the stock finally comes back to $35 where they entered. They eagerly jump at the chance to "get out even". This "get out even" selling will temporarily stall a rally and cause a resistance level to form.

Regret Is A Reason Why Support and Resistance Lines Form

Traders who discover a stock that has spiked up feel like they have "missed the gravy train". When the stock falls back to a certain level, the traders who felt regret at missing the first spike up are eager to jump in for a chance at a second spike up or upward move. Their buying forms a support level.

Take your stock chart and draw resistance and support lines at recent tops and bottoms. You should anticipate the trend to slow down at these levels. Use these support lines and resistance lines to either buy (at support) or to take profits (at resistance).

Institutional Traders Cause False Breakouts

A false upside breakout occurs when the market rises above resistance and sucks in buyers before reversing and falling.

A false downside breakout happens when a stock falls below support, attracting more bears just before a rally.

All stocks are fair game but especially any stock that has a high percentage of institutional ownership.

Institutional traders love causing false breakouts because this is where they make the most of their money.

Institutional traders have access to all limit orders. They know how many more buy orders are above a resistance level.

Institutional traders have a secret practice they call "running the stops". A false breakout happens when institutions engage in hunting expeditions to run stops.

Take the following example: when a stock is just under resistance at $20, the buy limit orders come flowing in near $18.50. The institutions calculate the liquidity ratio which measures how much the stock will go up if all buy limit orders are executed at $18.50. They calculate that the stock will run to $21 if all the buy limit orders at $18.50 are executed. They short the stock at $20 to push it down to $18.50. At $18.50 they cover their short position and go long as the wave of buy orders are automatically executed pushing the stock up to $21. If greedy traders start piling in, the institutional trader will stay long the trade. As soon as the buy orders start drying up, they sell short and the price falls back below $20. A false upside breakout will show on your chart.

If you get stopped out on a false breakout, dont be shy about getting back into a trade. Beginners tend to make a single stab at a position and stay out if they are stopped out. Professionals, on the other hand, will attempt several entries before nailing down the trade they want. - 23217

About the Author:

Written by Steve Wyzeck. To discover more stock trading secrets they do not want you to know about visit stock market

Investors Buying Blue Chip Stocks

By Michael Swanson

Have you been worried about investing in the stock market because you think you're going to lose all your money? It might surprise you to know that if you make the right choices, this could actually be a great time to go for it. These choices include things like blue chip stocks, available at great rates.

If you've never heard of these, you're probably going to wonder what make them so special. Basically, they come from companies that can be trusted to make the money they need in almost any situation. Even in times like these, you can trust that you're almost definitely going to get your dividends from them.

You should be looking into the possibilities offered by getting involved with major companies. And you should do this soon. While most places will get back on track once recovery begins, these will surge. To get in on the benefits, you want to be sure you're ready well ahead of time.

One thing a lot of people aren't sure of is just where these stocks got their name. In fact, it comes from gambling. A blue chip is the most profitable type you can have, and so it makes sense that it would be applied here. You can make a lot of money just like if you were to hit the jackpot in slots.

Even if you don't have a lot of money, you should at least be able to buy some things what with the prices things are at these days. You'll probably even be able to get several, and then simply sit on them, waiting for the day they'll pay for themselves and totally make up for what you had to spend.

Of course, you are going to want to become familiar with the language of what you're doing so you can be prepared and take in the advice of others. Better yet, the more you learn, the more you'll be able to do. In no time, you'll be an expert making the kind of money others envy. - 23217

About the Author:

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Trading Spot Forex - What Are The Advantages?

By Jane MacRae

Trading spot forex is actually trading in the world's currencies. The principle behind it is simply - you purchase one currency when it is low and sell another when it is high. And, you make a profit with the balance.

Compared to many other investment options, spot forex trading is gaining its popularity. Many people, even those who are new to investing, find that forex trading is a better choice for them than playing in the stock market or futures market, and there are good reasons for that.

* More Affordable Capital Requirement

Unlike many other forms of financial investment, you do not have to already have a big fortune to enter the forex market. Hence, trading spot forex has become a good investment choice for average players.

In the past, there was a time when forex trading was solely dominated by large multinational banks and major financial institutions. In that climate, it is easy to see why smaller investors did not feel they could even begin to compete.

Over the years, however, things have changed a lot. Now, almost anyone with any amount of capital can enter the forex market. You simply play with whatever amount you feel comfortable.

* East to Learn and Manage

It is known to all that forex trading has a long long history. Because of its age, the practice in the forex market is very much standardized by now. This, together the modern technologies available to investors today, has made the operation of forex trading very easy to learn and use. WIth an automated trading system, you can constantly monitor the market, make quick transactions and get complete stats any time you like. Whether you are eating, sleeping, or running errands, you can still be making money .

* An Exciting Market

The forex market is live 24 hours a days and 5 days a week. There is always something happening, and new money-making opportunities and systems never cease to turn up. In this exciting market, you can hardly stay inactive. You should keep in mind, though, focusing is just as important to your success as being responsive to new events.

* Affordable Cost

In additional to the more affordable starting capital requirement, the transaction fee for forex trading also tens to be lower compared to stock trading. This is also the case for charges by forex brokers.

As you can see, trading spot forex has many advantages, and these advantages have led to its increasing popularity. Regardless of how much you are willing to invest and regardless of whether you have any prior experience, you have a good chance of success in this huge market. - 23217

About the Author:

Click here for our review of a leading forex trading tool in the market, which will grant you a huge advantage over your competitors. Also check out this related article about currency trading program.

What Is The Fuzz About Forex Trading Software

By Kurt Naulaerts

Automated forex trading systems have generated a lot of interest and popularity in recent times. It is attractive to many medium and small investors. This market handles trading of currency of one country with that of another. This is one of the biggest and most energetic financial markets with trillions of dollars being traded every hour of every day.

With the internet coming over and advancing telecommunications, anyone with internet access, a forex trading brokerage account and good trading knowledge can participate. However to remain on top, it requires constant monitoring as global markets are open round the clock. You could choose a currency and its price before hand with the help of these automated systems. Your buy and sell orders can get instantly executed so all you need is your seed money and a broker to help you.

You do not have to be a professional to earn profits from this trade because the automated forex trading systems take care of all the work for you. When you trade through managed accounts, the automated system carries out the work for you. Any dependable trading platform helps you to save valuable time, since you no longer do the trading manually. Unlike manual trading, the auto systems allow you to manage multiple accounts simultaneously with the help of a trading platform. The biggest advantage of these programs is that you are allowed trading many systems in many markets.

You can use automatic forex trading systems any time you like and it does not require your presence. Even if you are physically absent from your computer, you need not miss a single profitable trade. You can then take full advantage of several forex strategies and varied systems. Since every system is activated according to specific trade movements, you can plan your investments and direct your risk accordingly.

The best part about these automated forex trading systems is that it does not take into consideration any human factors which often stand in the way of making rational trading decisions. This way you have the ability to manage and monitor several currencies at the same time as well as trade them as you like.

Even when you start using an automated forex trading system, you have to allow time to learn about trading of technical analysis and market indicators, otherwise, you can not make consistent profits. Several factors and conditions control the market, so no automated system can assure you of profits all the time. To suit your personal needs you can always program and customize the automated forex trading system. - 23217

About the Author:

Honest reviews on forex trading systems are hard to find. I managed to find a Ivybot review at http://www.thepowhatan.com/ivybot

What a Managed Forex Account Offers

By Bart Icles

The Forex currency market is the only current investment market that requires a minimal investment capitalization, operates continuously on a 24/7 schedule, and is highly liquid. Most new investors, though, simply don't have the capacity or time to learn how to do basic currency trading due to time concerns and other work commitments. Despite this, many can still become successful traders with the availability of Managed Forex Accounts.

Managed forex accounts are managed by experts on Forex matters who're connected with a large financial institution. A Forex account is an active or live forex account paid by the investor who gives full authority to the (certified) handling Forex brokerage firm, who does trading in their behalf, subject to the conditions and limitations of their contract. This set up benefits the investor which allows him to receive a (reasonable) profit margin without the required time and effort on his part, as dictated by the trading process.

The company managing the Forex account will have sole responsibility of gathering, analyzing and interpreting market data, and gives the necessary recommendations to the investor what to do in all trading transactions. Many of these companies and investment firms have been doing business in the Forex market for quite some time already, so therefore, have a high degree of experience in managing Forex accounts. The services they provide are essential to potentially all investors, most especially the ones new to the market, as they offer better chances of providing steady yearly profits.

One disadvantage of managed Forex accounts is that the fees remain collectible, whether or not the account generates substantial profits or not. Most starting investors have little or no experience of the market, so should do as a first step get an account with a reputable investment firm that is duly recognized by the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA). Doing so will mean that you'll be putting your investment on the able hands of an experts. Many such companies have access to vital market information shared only by most financial institutions, thus giving them privileged information on vital currency exchange rates and other important market changes, allowing them to have knowledge on how to create a profitable transaction.

Those who want to do Forex trading, but don't have the necessary tools, experience and knowledge how to do it, should seek the assistance of a Forex expert to handle their accounts for them in an effective and professional way to assure a profitable return on their vested investments. - 23217

About the Author:

Come learn how to use forex charting software properly. Their are several forex platforms to choose from but we recommend going with a free metatrader platform.