Professionals recognize that the key to successful options trading has more regarding selecting the best stock to trade, than choosing what option strategy to use. The professionals are learning technical analysis for the stocks they are considering using inside their options trading.
One of the many areas the professional option trader needs to master is just how to interpret the newest technical patterns that have emerged over the past few years. These patterns are as a result of massive Financial Market Structural changes that every market has undergone, like the Options Market.
Training for the brand new technical patterns covers the newest kinds of sideways action. Stocks move sideways more frequently nowadays than they did even ten years ago. The kind of sideways pattern is crucial Weekly Income Now to spot in early stages because it reveals who’s in control of this pattern, the direction the stock is likely to get of the pattern, and above all the volatility AND velocity after the breakout occurs. Volatility and Velocity are different thing, because one is just a sideways pattern and one other is a sudden huge move out of the sideways pattern.
Determining when the breakout is going to occur and the direction, optimizes many options trading strategies and increases profitability trading options as well as stocks. One thing all traders both retail and professional should try to learn, is just how to find the appropriate sideways patterns with strong energy building which will have big moves out of this pattern.
Furthermore sometimes the sideways pattern may also contain an island gap. When studying charts see if the sideways pattern becomes very consistent, just moving within the number of the prior sideways pattern before the island gap. The price barely moved. See if you have an extremely precise tight consolidation in the days ahead of the huge gap up. These two price patterns reveal a regular controlled bracketed order that is totally controlling price. That is among several Dark Pool or Twilight Pool footprints. Being able to see these patterns along side confirmation of the large lot indicators, reveals that this is a great put up for a velocity or momentum move to the upside.
Quiet accumulation by large lot investors is obvious in Candlestick charts and the controlled budget range tells the technical analyst that these are very savvy investors, that are using professional orders that bracket and control price. Dark Pools use these orders. When you’re able to trade with the giant lot investors from the Dark Pools and you can enter with them just before High Frequency Traders gapping price, profits are easier and more consistent.