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TechniTrader Stock Trading "5 Tips Avoid High Frequency Trading Front Running" 

Candlestick Charts Reveal High Frequency Traders & Dark Pools

Most individual investors and retail traders do not need to worry about High Frequency Trading front running. If investments for your long term portfolio are with a large to giant Mutual or Pension Fund, these funds are using Dark Pools which are off the exchange transactions. The High Frequency Traders can’t see them to front run.

If you are a retail trader meaning those who invest and trade from home, remember that most of the orders placed with online brokers for retail traders are filled from that broker’s inventory. So those orders never make it to the exchanges. If you are using Electronic Communication Networks, most of those orders are not sent to the exchanges either.

TechniTrader is "The Gold Standard in Stock Market Education." Go to the TechniTrader Learning Center and watch the How to Exploit the High requency Traders Webinar, to experience for yourself the excellence of TechniTrader education.

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"How to Exploit the High Frequency Traders Webinar"


Otherwise here are 5 Tips to Avoid High Frequency Trading Front Running:

1. Study the TC2000 Candlestick Chart example that shows High Frequency Trading activity.

2. Huge High Frequency Trading activity is usually a one day event in a stock based on news, arbitrage from another market or instrument, and hedging.

3. It is also caused by Cluster Orders from retail traders all using the same trading systems, strategies, MACD or Stochastic indicators, and some technical set ups.

TechniTrader is "The Gold Standard in Stock Market Education." Go to the TechniTrader Learning Center to watch How to Trade Dark Pool Buy Zones" Webinar, to experience for yourself the excellence of TechniTrader education. 

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How to Trade Dark Pool Buy Zones" Webinar


4. One of the huge advantages a retail trader has using Technical Analysis and candlestick charts is the ability to see the activity of the High Frequency Traders, Dark Pools, Smaller Funds, Corporate Buybacks and many more patterns that reveal who is controlling price and thus how price will behave thereafter.

5. One final tip is that High Frequency Traders rarely shift the trend, so do not start selling short right after a huge High Frequency Trading down day.

 

The example shows two High Frequency Trading high Volume spikes with long candlesticks. The first attempted to drive price up, indicated by the green arrow. The second tried to drive price down which is the biggest black candle after that before the run up, but the bottom for the Dark Pool Buy Zone™ had already been reached. 

5 Tips Avoid High Frequency Trading Front Running chart 2 - TechniTrader

Summary

Do not chase High Frequency Trading activity, instead learn to enter before High Frequency Traders move price. Learn how to interpret Candlestick Charts and Volume action to know when quiet accumulation is occurring, so you can buy into the stock before big High Frequency Trading moves.

The individual investor does not have the same access to information as the Mutual and Pension Fund Institutional Investors of the market who control 80% of the market's activity, so the ability to read stock charts to uncover professional interest in a stock is key to successful investing and trading.

TechniTrader is "The Gold Standard in Stock Market Education." Go to the TechniTrader Learning Center and watch a wide variety of webinars, to experience for yourself the excellence of TechniTrader education.

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Trade Wisely,

Martha Stokes CMT

TechniTrader technical analysis using a TC2000 chart, courtesy of Worden Bros.

TechniTrader.com

Chartered Market Technician
Instructor and Developer of TechniTrader Stock & Option Markets Courses

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