Make Money Trading Online

In the stock market, the opening price is not as important as the closing price. You need to know that the closing price is much more important than the opening price. You are about to learn how to pull crazy profits out of the stock market from this simple yet profound truth!

Let me jump right into this and teach you this incredibly profitable secret.

The final consensus of value in a stock is reflected in its closing price. When people get off work, this is the price they look at: When they print their daily charts after market close, this is the price they see. The closing price is really important when it comes to the futures market: The settlement of trading accounts in the futures market depends on the closing price.

Professional stock traders trade throughout the day. Their behavior is as follows: At the opening, they take advantage of opening prices by selling high openings and buying low openings and then they close out of those positions as the trading day goes on. What they do day in and day out is to trade against market extremes, also called fading: They are betting on a return to normalcy in any given market. When prices reach a new high and stall, professionals sell, nudging the market down. When a stock hits a new low and then volume begins to drop off on the sell side, professional traders buy which pushes the market higher.

Amateur and non-professional traders have very different trading patterns than those of professional and institutional traders: Amateur traders make up the majority of market participants at market open but as the day goes on, they slowly subside. Why? On the west coast, most amateur traders have a day job so they put on a trade in the morning before work and then do not check it again until they get home after work. Even traders on the east coast will put on a position at market open while at work and then check it at the end of the day. Near the closing time the market is dominated by professional traders.

Knowing this is a huge advantage! Why? Because it means that closing prices reflect the opinions of professionals. Study almost any stock chart and you will discover how often the opening and closing ticks are at the opposite ends of a candlestick. This tells you that professional and institutional traders are usually on the opposite side of the trade as amateurs are. You want to trade with the professionals, not against them.

You should consider closing out your long position if the stock you are trading opens and then goes up near its day’s high but drops the rest of the day and closes near its day’s low. What this tells you is that professionals are fading against your position and so you need to get out.

May you make a lot of cash in stock trading after reading this article. For more of Lance Jepsen’s free trading tips go to stock market and to learn how to correctly use one of the best money making technical indicators visit stochastic oscillator

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