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Entries in candlestick charts (10)

What is the Market Participant Groups Cycle?

Understanding the Dynamics of the Automated Multi-Venue Stock Market

Since a lot of you are very serious about trading, I am going to talk frankly here as I would to my students. I believe this will help you do better in your trading. Of course some of you won’t like it much, but my reason for spending my retirement teaching is to have traders succeed. 

Technical Traders tend to focus on the simpler and basic aspects of stock chart analysis, thus missing the larger picture which would allow them to make higher profits from their trading.

What is most problematic is how the retail news media talks about “investors doing this or that.” To most Technical Traders, it is presented as if everyone in the Stock Market knows and does the same thing at the same time. This is a total misperception based upon misinformation.

There are 9 Market Participant Groups, and hopefully soon a 10th which would be the Semi-Professional Technical Trader. This new group of Technical Traders would be a step up from the Retail Trader, and way above what I call the “Hobby Trader.”

The Securities and Exchange Commission SEC are seeing that some of the “retail crowd” are indeed working toward becoming highly educated, are beginning to behave as professionals do, and are capable of trading profitably. It probably would surprise you to learn the success rate of the individual Retail Trader is well, dismal. Professionals would never make it at such a low level of profitability.  

The SEC is considering allowing those few Technical Traders more latitude than the retail crowd currently is permitted. It strives to protect the uninformed and less informed, from their tendency to chase hypes and scams, and that is a tall order.

When looking at any chart as a Techncial Trader, the first question that should come into your mind is “Who is controlling Price?”

Go watch the How to Exploit the High requency Traders to learn how to find and track price patterns that trigger huge gaps and runs, and when to exit a trade High Frequency Trader driven

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"How to Exploit the High Frequency Traders Webinar"

In the chart example below who moved price up? Which of the 9 Market Participant Groups made this happen? Who makes this kind of run? Who buys at new All Time Highs? What is going to happen next? 

Here is a list of the current Market Participant Groups in the Stock Market:

  1. Giant Buy Side and Sell Side Institutions, using Dark Pools for their orders
  2. Wealthy Individuals, Family Trusts, Sovereign Funds
  3. Professional Traders as Independent, Floor, and Proprietary 
  4. International Corporations, and Fortune 1000 Corporations
  5. High Frequency Trading Firms
  6. Mid-sized and Smaller Funds, Small Sovereirgn, Small Foreign Funds, Non-Profit Funds
  7. Retail Traders/Technical Traders
  8. Individual Small Lot Retail Investors
  9. Odd Lot Investors
Go watch How to Trade the Dark Pool Buy Zones Webinar, to identify where giant Buy Side Institutions are quietly accumulating vast quantities of stock that often triggers High Frequency Trader runs and gaps.

Go to the TechniTrader

"How to Trade the Dark Pool Buy Zones Webinar"


If you do not know who you are trading with and who is on the opposite side of the trade, then you are at huge risk of losing money no matter what strategy, indicator, or system you use.

Here is a list of Order Types and Venues each Market Participant Group uses in their cycle of buying and selling:

  1. Different venues. You are in the Retail Trader Group and are basically tied to the Exchanges even though tour broker fills your orders 99% of the time out of their inventories. Dark Pools in Alternative Trading Systems do not even show the orders until after the market closes.
  2. Different order types. Retail Traders usually use Limit Orders, which the Professionals abandoned a long time ago. Some other groups use Time Weighted Average Price TWAP with numerous legs, or Volume Weighted Average Price VWAP orders. The Institutions have so many order types which they can combine to get the desired result, you would be astounded
  3. Different intent. You want to make a short term profit. The other Market Participant Groups have many reasons to buy or sell, and those reasons are important to understanding how price is behaving and what it will do next. This is NOT predicting, this is understanding the market behavior.
  4. Different speeds of order execution, which is a BIG deal. HFTs trade 60,000 times per minute. Your trade order takes a minute or slightly longer. The Dark Pools wait an average of 10 minutes for their orders to fill and execute.
  5. When and how each group obtains information relevant to the stock price value. Those using Dark Pools are way ahead of everyone else in terms of knowing what is going on with a corporation in which they hold stock. Retail Traders are the last to know so while retail buys, they are selling.
Webinar links are provided in this article to help you get started learning more about the most important Market Participaant Groups, as well as how to identify them in candlestick chart patterns and trade with them for higher profits.

Go to the TechniTrader Learning Center and watch a wide variety of training webinars including Candlstick Charts, Candlestick Patterns, Bollinger Bands, and How to Trade.

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Trade Wisely,

Martha Stokes CMT

TechniTrader technical analysis using a StockCharts chart, courtesy of

Chartered Market Technician

Instructor & Developer of TechniTrader Stock and Option Courses

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