Trading with Institutional Money Moves
Spotting and following institutional money moves provides a high probability investment- or trading strategy for private investors that works for all asset classes: Stocks, Options, Futures, and FOREX.
Who are institutional investors and what is their core focus?
Institutional Investors
Category |
Characteristic |
Examples (Stock Symbol) |
Institutional Focus |
Prop Traders |
Leading institutions , trading “their own money” |
GS, MS, DB, UBS, CS |
Finding best performers: Stocks or Industry Sectors |
Fund Managers |
Pension Funds, Mutual Funds, ETF’s, Hedge Funds |
OPY, ING, SPY, BLK |
Following Indexes: S&P 500, Small Caps, Countries |
Low Risk Investors |
Insurances, Banks |
AIG, ALV.DE, UNH, PRU, BAC, WFC, C |
Capital investment with low risk tolerance. |
Liquidity Providers |
Market Makers, ECN’s, Wholesalers |
JPM, UBS, CME,BCS |
Offering at the bid and ask. |
The table above shows: “Prop Traders” can also act as “Liquidity Providers”: On the one hand, some institutions trade their own money and on the other hand, they are providing liquidity. Hence, if a core “Prop Trading Company” wants to accumulate or dispose stocks, they have to bypass their key competitors. Even so, they try to hide their actions, the other market forces spot what is going on and trade along with it – and we share in the following our methods to identify high probability price moves on your charts.
Financial markets are highly efficient and follow base economic principles where prices change as a result of a change in supply and demand:
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In an efficient economic situation like the Financial Markets, individuals are maximizing their utility, where one can only better its situation when another worsens its situation: Pareto Efficiency.
More than 85% of all financial market transaction are initiated by institutions where institutional leaders constantly gain on market impact and asset control.
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Every Price Move contains an inherent counter price move, where key asset holders rebalance their inventories.
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After a strong price move to the downside, key asset holders reduce the supply per price point and those who want to cover initiate an extra demand that drives prices up. After a strong price move to the upside, key asset holders reduce the demand per price point and those who want to sell their positions have to budge quickly for lower prices.
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Price-moves have an initiation and continuation phase you can measure with advanced signal theory; rather following a Markov chain than a Finetti principle:
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The Hamming Distance can be used to filter significant from not significant initiation signals. Analog-digital filtering to recognize price breakouts by gradient changes. Field strength measure (statistical volatility) to determine the expected price move to a probable retracement or reversal price level: Target-1. Price initiation moves need confirmation, to validate that the crowd follows the leaders; thus, a price threshold can be formulated for entering into a position. |
Prices have a Dynamic Memory, helping you to find entry and exit points on the chart.
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We can record activity based price points which have a high probability for institutional order placement. There are time base price points which are considered for price breakouts and reversals. There are price expansion points that are calculated for significant points where you can expect institutional order activity.
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In your daily trading, you do not have to consider the mathematical and scientific background of our models: Let the charts tell when to buy or sell:
NeverLossTrading® developed multiple algorithms and quant strategies, which feed scanners, indicators and studies, highlighting institutional price moves by spelling out potential trade entries and exits.
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After we clarified when to initiate a trade, the next question is which stocks to trade?
To follow institutional price moves, pick stocks which are widely held by multiple institutions.
With NeverLossTrading Alerts, we help you to find those opportunities.
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| Trade or Invest with the institutional money flow: Stocks, Commodities, Currencies, Treasures and their derivatives: Futures and options ...click here. |
To be a successful private investor, the skills and experience for being able to make money when the markets go up and down is essential.
When a major price move occurs, expect to trade one direction for no more than 10-trading days and after that expect a reversal. If you want to catch a longer trend trade, trail your stop:
- To the upside: Below the low of the prior candle.
- To the downside: Above the high of the prior candle.
Why is an institutional follower strategy successful?
- Private investors have the advantage of speed: They can enter and exit entire positions, while Institutions need a longer time to get in and out of a position by sheer size and SEC (Security Exchange Commission) regulations.
- By the smaller size, you have an easier way to leverage and hedge trading positions.
- With a short- rather than long-term strategy, money can be made on up- or down-moves.
- Short-term trading allows for constantly generating and compounding interest, which gives you accelerating returns.
- With modern technology on hand and competitive commissions, the private investor can access all markets real time, similar to institutions.
In our aim to share knowledge and trading skills, we hope that we were able to give you guidelines for bettering your trading. If you want to see and learn more about NeverLossTrading, schedule for a consultation at contact@NeverLossTrading.com or call: +1 866 455 4520.
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Disclaimer
The risk of trading securities, options, futures can be substantial. Customers must consider all relevant risk factors, including their own personal financial situation before trading. In our teaching of how to trade the markets, in our newsletters, webinars and our involvement in the Investment Clubs, neither NOBEL Living, LLC, the parent company of NeverLossTrading® , or any of the speakers, staff or members act as stockbrokers, broker dealers, or registered investment advisers. We worked out trading concepts that benefit us greatly and share them through education with our members and clients.
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