Understand What Really Moves Markets


Simpler Trading Team

Oct 14th 2020  .  2 min read

There’s an underlying influencer in the markets that traders often overlook or just don’t know this exists.

And the media doesn’t openly discuss such influence on trading.

The hidden elephant in the trading world is the effect of big, institutional trading volume. This daunting volume can shift the market and hit hard against retail traders – like you and everyone at Simpler Trading.

Big institutional trading volume is what drives almost every big move in the markets.

Trading “with your head up” is being able to accurately measure what the big funds are doing. If we don’t know what they’re doing, we risk getting run over.

Make a note, it’s always easy to see an institutional move after the fact. But if we don’t know what they’re thinking and the actions they’re taking right now, then we are at a disadvantage.

At the end of the day, hedge funds, mutual funds, and pensions, control the market because they represent the majority of the volume.

As retail traders, we can trade our shares of stock, but that’s not really going to have an impact on a stock like Facebook or Amazon. These sector leaders can trade tens of millions of shares a day.

The question you have to answer is simple: Are market influencers buying or are they selling?

That’s the only thing that can cause a stock to make a significant move up or down. If we don’t have any idea what the funds are doing, we might as well just be tossing a coin.

At the end of the day, if you want to be consistently profitable, you need an edge.

And that means learning when to time trades with the large funds/market influencers in order to hitch a ride on their order flow.

Then it’s possible to gain a clearer path to trading with precision.