The Shakeout
(Tricks of the Trade)
A market professional may want to accumulate a large position in a stock that is trending strongly; either for his own account or for a major client. How does he/she do this? If he starts placing buy orders in the pool, he will chase the stock up sky high, without being able to build a big enough line. The golden rule is: buy into weakness.
Patience
The professional bides his time, waiting for the stock to consolidate or start a short-term correction. He knows that trading will be quiet during this phase: buyers lose interest for a while and look elsewhere. He also knows where most traders have their stops.
Adjusting Stops
In a strong-trending stocks, most traders will seek to lock in profits by placing their stops below the previous short-term (or intermediate) low. In a consolidation they tend to move their stops up to just below the base.
A few well-placed sell orders on a quiet day will drive the stock below its' support level. Stops are triggered, sending a flood of sell orders into the market. Everyone takes fright while our market professional steps forward and scoops the pool; buying in the face of the correction. Selling dries up when the stops are filled and the stock soon recovers back into its normal trading range. Everything returns to normal; except that our market professional now has a sizeable parcel of stock, accumulated at bargain-basement prices; and a group of punters curse their luck while the stock soars into the stratosphere.
http://www.incrediblecharts.com/start_trading/shakeout.htm
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The Shakeout(Tricks of the Trade)A market professional may want...
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Last
1.1¢ |
Change
-0.001(8.33%) |
Mkt cap ! $16.22M |
Open | High | Low | Value | Volume |
1.2¢ | 1.2¢ | 1.1¢ | $44.09K | 3.688M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
2 | 512891 | 1.1¢ |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
1.2¢ | 5269250 | 4 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
2 | 512891 | 0.011 |
8 | 10347896 | 0.010 |
10 | 8697366 | 0.009 |
4 | 1952157 | 0.008 |
4 | 1079420 | 0.007 |
Price($) | Vol. | No. |
---|---|---|
0.012 | 5269250 | 4 |
0.013 | 4527200 | 5 |
0.014 | 1294690 | 3 |
0.015 | 1324179 | 2 |
0.016 | 1355004 | 3 |
Last trade - 16.10pm 18/09/2024 (20 minute delay) ? |
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EXT (ASX) Chart |