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One of my favorite trading strategies is finding huge profits from the Dark Pools.

And this strategy is more like a CSI investigation than it is banging on the keyboard placing trades as fast as possible

How do I find the profits that are available in the Dark Pools?

Well… it’s a multi-step trading process that I have perfected over the years.

  1. Locate where the institutional money is being spent, based on real-time order flow data
  2. Identify the Highest Probability Breakout set-ups, based on my favorite chart patterns and momentum indicators
  3. Validate the likelihood of a breakout using some of my favorite momentum indicators
  4. Scan for a selective Breakout Pattern using a Volatility Squeeze indicator to establish a watch list of these powerful breakout set-ups based on Dark Pool trading

And when you join Dark Pool Profits, I’ll show you this scanning process.

You will learn how I monitor the Dark Pools to quickly find these powerful breakout trades, based on Supply and Demand and Volatility Compression Squeeze.

Then once I successfully identify the stocks I am going to trade… I place them on my master watchlist and execute the trade once I review my custom momentum indicators 

Ready to learn more about how this strategy could improve your trading and take it to the next level?

 

What are Dark Pools?


In order to know where the smart money is trading, you need to start by knowing what they are thinking.

Now, I don’t have a secret line into these hedge funds and banks… 

But I do get to see their receipts when they go to the store and I can view what they are buying.

You see, when a trade hits the markets, it’s considered public information and is available to everyone to see.

Now this is true for all of the major “lit” markets, but not the “dark markets”, or better known as Dark Pools.

What are Dark Pools?

Dark Pools are an unknown trading venue, created by some of the largest institutions in the world, and shrouded in complete mystery. 

And these mysterious exchanges account for over 40% of all of the trading volume in the markets

Now I will not go into detail about how the Dark Pools are created and how the SEC fails to govern their trading

Instead, I want to show you how I use tools to research the Dark Pool trading volumes and how I spotted Draft Kings and pulled in 100% profits in almost no time at all.

 

Draft Kings: How It All Started


When a large institutional trader is moving stock, sometimes greed can get in the way they let their guard down.

And that’s exactly what I am looking for in the Dark Pools.

I want to see the greedy and the reckless traders who are pushing money around without any fear of being caught.

And it’s that lack of fear that usually turns up more than you would imagine.

But you need to first find these trades

And I’ve become good at spotting these and identifying where the smart money is putting its money to work.

Now let’s take a look at a chart of when the large Dark Pool trades started going off in the markets 

 

Source: Thinkorswim

 

By looking at the chart above, you can’t tell much about what is going on, and that’s because these charts don’t show what the Dark Pools are doing!

In the highlighted section of the chart is actually when MILLIONS of dollars were dumped into this stock all by a single trader.

Why is this interesting?

Well, let me ask how you would handle this situation.  

  • Would you spend $1 on a random bet… probably.
  • Would you spend $50 on a random bet…maybe.
  • Would you spend $500 on a random bet… only if you’re a baller.
  • Would you send $100k on a random bet… most likely not!

So why would you spend over $1m on a bet?

Well I can tell you this… it’s sure to not be random!

And most likely, the person who is placing this trade is doing a lot of proprietary research before they put that much money to risk!

Which is exactly why I want to know what these research teams are thinking!

And DraftKings did not disappoint!

Shortly after the alert came out, this is hits the major news lines.

 

 

Think this is a coincidence?

No way!

And if you were able to get in, just look what the stock did in the days after the alert hit.

 

Source: Thinkorswim

 

And then the news starts pouring in at this point…with the New York Giants setting an exclusive sports betting deal with this site

 

 

And then ESPN was next!

 

 

Followed by extremely aggressive analyst ratings I’ve seen in a long time.  

Analysts said:  Out of nearly two-dozen Entertainment – Casinos/Gambling stocks, DKNG is ranked first. Of the 14 analysts who have studied DKNG, 9 rate it as a Buy and 5 rate it as a Hold. No analysts advise selling DKNG.

And that’s when I bought calls on this stock!  I knew I had to be involved in this wild action.

 

 

And in no time, I was able to pull down a huge 100% return in just a few days!  

Here’s what I alerted shortly after.

 

 

But that’s not where it ends…

 

Technical Analysis To Continue To Trade The Dark Pools


Now, even though it might sound surprising to many… I don’t just exit a trade based on PL.

Yes, I scale out of my positions based on profit targets, but I always leave a trailer out there and exit it based on a blend of technical or profitability analysis.  

And what this means is that I can let my winners run even more without taking them out early!

So if there’s any steam left in the trade, I could see huge jumps in my profits just by holding on to the final bit of my trade for a longer time.  Click here to learn how I decide how to hold my trades for more profits after exiting at my profit targets.

And that’s exactly what I did for the final piece of my DKNG trade when I saw what was happening last week.

Here is a chart of how I used Fib levels to determine where I think DKNG is going to be heading in the longer term.

 

Source: Thinkorswim

 

Now even though this is my target, I’ll be waiting for pullbacks and more Dark Pool alerts throughout the upcoming weeks to add more size back into this trade.

But that’s not where it ends.

Now that I know where my Fib targets are, there is another technical pattern that is at play.  And that is the measured move from the Bull Flag

 

Source: Thinkorswim

 

And what this means is now we are starting to see 4 key indicators that are converging to make for an interesting technical setup in DKNG.

4 Technical Indicator Signals:

  • Long term Fib targets above the current price at $72
  • A Bull flag is showing price targets at $70-80, aligning with Fib targets
  • Consolidation is expected, but the stock traded strong off the moving average support level
  • Volatility Squeeze Indicator is showing continued momentum, but a period of quiet is expected first

So… if all of the price action can align, this is showing me that DKNG is still in a great pattern for another explosive move in the near term.

To see exactly how I’ll be trading DKNG and stay up to date with my Dark Pool trades, be sure to join my Dark Pool Profits trading service here.

Click here to join Dark Pool Profits today

 

*Results presented are not typical and may vary from person to person.  Please review our full disclaimer located at ragingbull.com/disclaimer.

Author:
Ben Sturgill

Ben leads two services at RagingBull. IPO Payday can help you pinpoint, position, and profit from IPOs. In Daily Profit Machine Ben guides day and swing traders to profit by trading the SPY Index. Ben hosts the RagingBull.com weekly podcast WealthWise where he shares thoughts on wealth and success with traders, businesspeople, entrepreneurs, and experts to uncover and share the wisdom needed to live a wealthy life.

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