The Rise of Dark Pools and Why Canadian Markets Are Shifting Away From Bank-Owned Dealers
Determining when the breakout is going to occur and the direction, optimizes many options trading strategies and increases profitability trading options as well as stocks. One important thing all traders both individual and professional should learn, is how to find the right sideways patterns with strong energy building that will have big moves out of that pattern.
In addition sometimes the sideways pattern will also contain an island gap. When studying charts see if the sideways pattern becomes very consistent, just moving within the range of the prior sideways pattern before the island gap. Often the price barely moved. See if there is a very precise tight consolidation in the days prior to the huge gap up. Both of these price patterns reveal a steady controlled bracketed order that is totally controlling price. This is one of several Dark Pool or Twilight Pool footprints. Being able to see these patterns along with confirmation of large lot buying Indicators, reveals that this is an ideal set up for a velocity or momentum move to the upside.
Quiet accumulation by large lot investors is obvious in Candlestick Charts and the controlled price range tells the technical analyst that these are very savvy investors, who are using professional orders that bracket and control price. Dark Pools use these orders. When you can trade with the giant lot investors from the Dark Pools and enter the stock prior to High Frequency Traders gapping price, profits are easier and more unusual options activity .
A block trade is a privately negotiated transaction that meets or exceeds a predetermined minimum exchange threshold volume of shares outside the open markets. Aside from penny stocks, a typical block trade is either stock worth $10,000 shares or bonds worth $200,000; although in some cases a block trade can be much larger number between trading parties.
Since 2010, it has been more difficult to transact a large trade order of stock. This is due to a combination of marketing conditions, which include rapid fluctuations of the price of stock over short time frames, low volumes, and the world credit crisis. Therefore, some consider the traditional style of trading to be on the verge of extinction since most lit and dark venues don't make it practical or available to use. Furthermore, young investors from large firms would prefer to engage in high frequency electronic trading in order to close a deal at a much lower rate to make a large profit in milliseconds instead of having to depend on the advice of a broker before they submit their orders.