Trap for Investor (9) - Awareness of the Dark Pools in the US Market that Distort the Accuracy of Tape Reading

For those well trained traders and trading professional, they know that trading volume is a very important indicator to judge the state of the trend for the stocks - as it is a measure of money flow.

And, the classical books on Jesse Livermore and Richard D. Wyckoff emphasis on the importance of volume through Tape Reading....

Now here is a video clip from CNN showing that the trading volume of the Dark Pool is up to 40% of the total trading... Which means that there is a Change in Rule on Technical Analysis as on How to Interpret the Volume.  Be aware!

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So, what’s the Impact???

Though the above video trying to project an idea that these activities does not affect the public...Yes, it is true for the untrained traders that don't use volume indicators and mass public who don' trade.
Actually, it shows that “Volume” information is distorted (US Market).  So, even if the historical speculation king like Jesse Livermore and Wyckoff methodology would lose their accuracy in selecting stocks if they were re-incarnated with full knowledge of their past live, as their method is heavily based on price-volume relationship (money flow direction) – The Fundamental Rule had Changed.   So... Higher weightage in judging the trade should be based on Price dynamic, and that is the Multiple-Time-Frame Relative Price Strength.

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Here is another excellent short video illustrate how the dark pools work in more detail:-

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