Everyday life has a way of revealing a better understanding of your most puzzling problems. Early on in my stock trading career, I had a difficult time 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. The mental frustration of losing my initial capital was taking its toll. All of this will make more sense shortly, so just bear with me.

New York is an incredible city. 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 zigzagged, down the busy sidewalk I could here the faint sounds of music playing off in the distance. I absolutely love music, especially live performances. I was curious so I followed my ear. The closer I got to the source of the music, the more I noticed how many other people were moving in the same direction. We were all being funneled down the overcrowded sidewalk. A smaller number of people were headed in the opposite direction.

The sound and clarity of the music increased with every step I took, as was the size of the crowd . Eventually, I arrived at the source of all the excitement. A live band was performing and hundreds had gathered to watch the show. Im not very tall, so I couldn't see a thing! I remember saying, I should have gotten here earlier. The light bulb in my head shattered into a thousand pieces! Stock trading manna had fallen from the sky. This was the breakthrough I had been searching for.

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

1.The Live Band

The band is the catalyst for every major stock price movement both up and down. They are the proverbial big fish in the game. Following their lead will undoubtedly fatten your profit margins. Institutional buying and selling of massive blocks of stock greatly affects volume. Keep a watchful eye on the band because they perform many unannounced shows. Their influence on the stock market is inarguable.

2.The Audience

This group of traders, investors, speculators, and gamblers comes in waves once the band begins to perform. Some of the most skillful members of the crowd are there as the band sets up the stage (hint, hint). People come from blocks around to join in the festivities. The bandwagon effect is now in full swing. I arrived late to the party thus missing 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 hoards of people are flocking towards the show, they are quietly leaving the scene. Why would they be exiting at the climax of the show? The answer is in the question! Party Poopers exit at the climax of the show. In other words, they are cashing in their profits. Who are these contrarians ? You have already been introduced to them . 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.

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, be mindful of everyday events that can help improve your trading. 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 fast moving stock. Resist the temptation and find another party that's just getting started. Go ahead, be a party pooper.