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justinstrommer9

Institutional traders

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I’m trying to get a better understating of how institutional traders play a role in our trading strategies. 

When we are trading our strategies, like the ABCD pattern or ORB, is it the buying and selling of the institutes that are creating the big price moves that we are riding up or down for profit?  Or is it sometimes a mass amount of retail traders making the price move?  It is to my understating that us retail traders don’t have enough power to move the prices.  So I am assuming we are trying to anticipate the decisions of the institutes and ride their moves to take a share of profits? Is it the institutes actions that  cause the pre market gaps?  When we are trading a trend trade, is that trend up happening because institutes are continuing to buy it up or because there is no institutes interested in selling?   I’m just trying to wrap my head around it because I think it will help me make better trading decisions once I clearly understand how our strategies are effected by the institutes.  I try to research it, but still have a little confusion about it.  Anything helps. 

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not exactly. The retail traders have more power in the term of psychology. Machines do not feel stress and do not miss exit and entry points and do not get FOMO etc. My opinion on this topic is, that you really do not have to think about it. You never know which direction the stock goes so thinking about machines or not, there is no difference in what you should be doing. From what you see on the graphs you can not tell if the stock is being traded by 1000 retail traders or 1 institution. You just need to trade the trends, whatever is causing them.

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I understand that to trade based on institutional data is a standalone strategy, as discussed in Zack's Forex book, ie., ref. supply and demand  trading section. The chart analysis is done via supply and demand zones and trades taken accordingly. A good discussion is presented in Zack's book, but I think a Webinar discussion by Zack will be beneficial. You might want to read Zack's book to get a better idea on price movement and institutional traders.  

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More helpful info on this subject can be found on u-tube/www.samseiden.com, educational videos on supply and demand trading with reference to institutional traders.

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Hi Justin! Did you solve your question?  For some strategies to have identified institutional accumulation/distribution is important. Thanks!

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