Everyday life has a way of revealing a better understanding of your most puzzling problems. Early on in my stock trading career, I struggled with producing consistent profits. So much that, I decided to get away for a while and put my mind at ease. I went to New York City. I needed a break from the mental frustration of experiencing so many losses. All of this will make more sense shortly, so just bear with me.



New York is incredible. There are people everywhere you look. I grew up in an urban area but it was nothing quite like this. All five of your senses immediately come to life. As I walked, more like side-stepped, down the busy sidewalk I could here the faint sounds of music playing off in the distance. I absolutely love music, especially live shows performances. I was curious so I followed my ear. I noticed that a majority of the people were headed in the same direction as me, presumably to find the source of the music. It was if we were all being funneled down the sidewalk. A much smaller number of people were moving against the tide.

The sound and clarity of the music increased with every step I took, as was the size of the crowd . Finally, I arrived at the source of the melodic commotion. A live band was performing and hundreds had gathered for the free concert. I couldn't see a thing! I recall saying, Why couldnt I have gotten here earlier? The light bulb in my head shattered into a thousand pieces! I had just been given stock trading manna from the heavens. This was the breakthrough I had so desperately needed.

Stock trading is a lot like the concert in New York . The band symbolizes, in this case, institutional buying. In essence, the party starts with them. Next, there is the audience and those moving in the direction of the music source. This group consists of investors, traders, speculators, and gamblers. And lastly, there are those moving in the opposite direction of the crowd. You will be shocked as to why they are leaving so soon. I will break down each groups role individually starting with:

1.The Band

The band is the smoking gun for every major stock price movement . They are the big time players in the stock market. Following their lead will undoubtedly fatten your profit margins. Institutional buying and selling greatly affects volume. Always be on the look out for the band because they perform many unannounced shows. Their influence on the stock market is unquestionable.

2.The Audience

This group comes in waves once the band begins to perform. Some of the most skillful audience members are there as the band sets up the stage remember this. When the band begins to play, those within earshot of the music come from blocks around intensifying the vibe in the air. The bandwagon effect is now in full swing. Unfortunately for me, I arrived late to the party and missed most of the performance (upward stock price movement). It literally PAYS to get there early.

3.The Party Poopers

This last group is completely in tune with the band. While droves of people are flocking towards the show, the party poopers are quietly leaving the scene. Why would they be leaving now? The answer is in the question! Party Poopers exit at the climax of the show. In other words, they are banking their profits. Who are these contrarians of the stock market? You have already been introduced to them earlier in this article. They watched as the band set up their equipment. They enjoyed front row seats for the show. And we hardly noticed them as they walked right by us on our way to the show. Surprise.

There you have it. This is a true account of how a short hiatus from the stock market allowed me to experience a stock trading epiphany by means of an everyday life experience. As a trader, your comprehension of misunderstood trading principles often occurs when you least expect it. We sometimes need a real world example to make it all click in our brains. This example spans a period of only one day. In reality, this process can take shape over several days and even weeks in the market. Remember this story the next time you have the urge to chase a rapidly moving stock. Fight the temptation and find another party that's just getting started. Be a party pooper.