How Small Investors Gain Such a Big Advantage Over Wall Street

By Guy Cohen | Wed, May 13, 2009 |

  

Archives: Investing

You might think that you and your investments don’t stand a chance against the Wall Street giants. But the fact is, you can gain a big advantage simply by doing one incredibly simple thing:

Stay small.

That means steering clear of the big investment firms. Keeping your money out of massive mutual funds managed by someone more interested in his image than your cash.

In the financial markets, as a small investor managing your own money, you can prevail against the big institutions whose performance is, let’s face it, average at best. The key to success is speed – which is something the Wall Street giants are seriously lacking. It takes them longer to jump on new opportunities or jump ship when things turn south. As a small investor, you can nearly always buy and sell anything you want, literally with the click of your mouse. Your order is filled immediately. And no one is paying attention to what you’re doing, because your trade barely registers on the radar.

And here’s the real kicker: You can monitor the actions of the big institutions because their activity is easy to spy on!

You see, the big institutions need to trade in such large volumes that their activities are immediately obvious to anyone paying attention. And as a small investor, by paying attention you stand to make a small fortune by stalking your prey and pouncing with rapier speed at just the right time.

For example, let’s say ACME is a stock that’s been stuck in a small price range for the last few days. As an educated investor you’re already aware that this stock has the potential to make a big move. The institutions start buying in large numbers, pushing the stock price up – but they’re not done yet. To make money, the big institutions have to buy in such large volumes that it takes days for them to accumulate their positions.

You’re observing this activity and, as the stock price breaks out of its recent tight range, you load up and buy your required quota in just a few seconds with a few clicks of your mouse.

The institutions are still not done, and have to keep buying at higher and higher prices. The stock keeps rising, now at even greater speed as the big funds double up on their investment, pushing the stock to new highs. But remember, you’re already in, happily riding on their coattails.

Abe in Virginia used this strategy for two years, transforming his account from $10,000 to $140,000.

“This is the one pattern in the markets that I pay attention to,” says Abe, “because when the stock flies it can mean triple-digit returns in a matter of days.”

If you want to read more about how Abe and other traders are outgunning Wall Street, click here to read their fascinating story.

[Ed. Note: Trading expert and bestselling author Guy Cohen can show you how to generate your own massive returns trading stocks with his new program. Get all the details here.]

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