So you decided to get into the stock market as kind of a hobby and thought those fancy "Trailing Stop Orders" were convenient because you could "Set them and forget them" eh?
Not so fast.
If you use Scottrade and watch the streaming quotes for the larger companies, you'll notice that buying and selling almost has a breathing pattern, such as with Citigroup [C], blocks of 5,000 shares appear to be continuously bought and sold, almost like someone waiting to play tennis, bouncing the tennis ball up in the air with their racket. These are Institutional investors who play with billions of dollars every day. If they stop breathing a stock, the price will fall.
When I started investing using Scottrade, I was using trailing stop orders to buy or sell stocks, but they were hitting wrong. It was after watching closely that I discovered big institutional investors were messing with price volatility by selling, then "buying to cover," large volumes of shares to shake-out standing trailing stop orders of smaller investors, so I no longer use any trade triggers, but I must be vigilant.
It feels like bullying.
Not so fast.
If you use Scottrade and watch the streaming quotes for the larger companies, you'll notice that buying and selling almost has a breathing pattern, such as with Citigroup [C], blocks of 5,000 shares appear to be continuously bought and sold, almost like someone waiting to play tennis, bouncing the tennis ball up in the air with their racket. These are Institutional investors who play with billions of dollars every day. If they stop breathing a stock, the price will fall.
When I started investing using Scottrade, I was using trailing stop orders to buy or sell stocks, but they were hitting wrong. It was after watching closely that I discovered big institutional investors were messing with price volatility by selling, then "buying to cover," large volumes of shares to shake-out standing trailing stop orders of smaller investors, so I no longer use any trade triggers, but I must be vigilant.
It feels like bullying.
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