Exposed: Wall Street's No. 1 Profit Machine
When pro traders are on the hunt for steady income and monster home-runs, they bust out their "secret weapon": SPX. Don Kaufman has used this one ticker to generate two- to four-day gains of between 192% and 556%. He just showed everyone in the audience how to use it themselves. Watch now… | | The Trend Is Your Friend - Here's How to Find It | Hi, TheoTraders - it's Professor Bierman here with you this Friday. I was talking with my colleague Blake in our group chat and he mentioned he was working with what traders call the "AccDist" - or, in plain English, the accumulation/distribution indicator. It's powerful stuff, and in a market dominated by algos, it's invaluable for uncovering the long-term trend. | It struck me as a great idea, and one I'd like to share with you. | Unlike many traditional indicators, which focus solely on price, the A/D indicator incorporates volume to provide a more comprehensive picture of market sentiment. It helps you identify whether an asset is being accumulated (bought) or distributed (sold), offering you the inside track on potential price trends. | At its core, the A/D indicator measures the cumulative flow of money into and out of a security. It does this by comparing the closing price to the range of the trading day and weighting this difference by volume. When the closing price is near the high of the day, the indicator rises, signaling accumulation. On the other hand, if the close is near the low, it suggests distribution. | So, why should you care about the A/D Indicator? | Spotting Trend Strength: The A/D indicator is a powerful way to confirm price trends. If prices are rising but the A/D line is flat or declining, it could indicate that the uptrend lacks strong volume support, signaling a potential reversal. Similarly, a rising A/D line during a downtrend might signal weakening selling pressure. Identifying Divergences: Divergences between price and the A/D line can be early warnings of trend reversals. For example, if the price makes new highs but the A/D line fails to follow, it could suggest a weakening uptrend and an impending correction. Volume-Driven Signals: The A/D indicator leverages volume, which often leads price movements. By analyzing volume-weighted data, traders can gain an edge in predicting price action.
| Fundamentally, using this indicator helps you make more informed trading decisions. I'd say that's essential when the machines have basically rigged the game against you. | Have a great weekend. | Bierman |
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