Smart Money - Hedge funds, institutional banks, proprietary trading firms, billionaires.

  • They accumulate and distribute large quantities of stock. 

  • They determine the market sentiment. 

  • They buy at the lows and sell at the highs.

Institutions, High Frequency Trading Algorithms.

  • They follow Smart Money’s large orders.

  • They buy or sell aggressively depending on what Smart Money does.

  • They are the ones who cause exponential volume increase and big directional price moves.

  • Their orders are automated and their systems are capable of placing thousands of orders before you can place a single trade.

  • They are in and out quickly. 

Investment Groups and Small Funds

  • The average investment company that is somewhat informed of the overall market. 

  • They listen to suggestions made by the large institutions and follow market trends.

  • They buy and sell in the middle, not at lows or highs.

Small Investors and Retail Traders

  • The average retail trader/investor or very small funds.

  • They often buy towards the end of uptrends and sell towards the end of downtrends.

Uninformed Investors aka “Dumb Money”

  • This group is made up of everyone else with some extra cash to invest.

  • They have very little understanding of what is going on in the market.

  • They base decisions on emotion and are impulsive buyers.

  • They almost always buy at the highs and sell at the lows.

Market Share between Market Players. 

Investment Groups, Small Funds, Retail and Uninformed Investors control roughly 15% of the market share.

Smart Money, Corporations, Billionaires, Institutions and HFT’s controls the other 85%.

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