Note, that this text has being created by Bryant Washington and is solely his interpretation and not of HedgeFundLive. This article is directed to medium-high level experienced traders.
Day Trading “Productivity”: A resume analysis of institutional and technical trading behaviour
1. Selling For a Fundamental Reason
“recognising True Selling”
2. Professional Selling for a Technical Reason
“During a normal trading environment”
“During a Professional Fundamental Buying”
3. Professional Buying for a Fundamental Reason
4. Professional Buying for a Technical Reason:
“During Emotional Price”
Tops and Bottoms: In any chart we can tell, that there are certain exceptional trades with high returns. This also means, that the number of stock supply at this price (Prime entry) statistically is extremely low on the “short side” and high on volume on the “Long side”, the following is a definition short analysis of the content during this scenarios.
Let’s try to understand the key scenarios. My analysis has been made intra-day in some cases on a one minute time frame, since I’m a day trader, but often these scenarios are found on any time frame, since their core principals are human emotional psychology and the evaluation of the price by professionals:
1. SELLING FOR A FUNDAMENTAL REASON (True selling)
● recognising true selling:
“If we pay close attention, we may find reasons”
- Usually this starts with low volume, a very significant acceleration in price, most of the time forming a bearish engulfing pattern.
- Volume will not increase until technical traders notice, that the acceleration of the price is in only in one direction and the longs cannot keep up with the selling pressure, taking their stops aggressively and making them cover their positions.
- The following volume-bars will remain consistently higher on the intra-day(one minute)
Here is a Scalping Technical Trade, that you can test after this situation:
- As the trade accelerates, stopping losses will start getting more and more aggressively hit and at this point what was a real fundamental correction, will become a technical reason to “short the rally”.
- Note, that at this point smart money (fundamental buying) may not show up for days, but all depending on the emotional traders taking the price to less than fair price value on the name.
- This, as I will mention later, will be taken into consideration as a under-value “name” by professional technical traders, after emotional traders drags price to absurd levels.
2. PROFESSIONAL SHORT SELLING FOR A TECHNICAL REASON (eventually the stock will become fundamentally under-priced):
● During a “normal trading environment” :
“Accepting fear as your tool”
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