This is How You Trade WITH the SMART MONEY (and Become a PRO)

Summary

The video discusses the immense power and influence of Wall Street firms like BlackRock, Vanguard, and State Street, which collectively control a massive portion of the global market through their vast holdings in ETFs. The speaker explains how individual traders can profit by mimicking the strategies of these financial giants. By following their buy and sell behavior, using tools like the CUT Net Positions indicator, traders can replicate institutional strategies, ultimately aiming to achieve financial success. The speaker emphasizes that aligning with the 'smart money' is key to generating consistent profits in today's competitive trading landscape.

Takeaways

• 😀 Major asset management firms like BlackRock, Vanguard, and State Street own a vast portion of the stock market, controlling up to 95% of American corporations.
• 😀 These firms are not only massive shareholders but also act as resellers of assets, profiting from the buying and selling of ETFs, stocks, and other financial instruments.
• 😀 ETFs (Exchange Traded Funds) are accessible to retail investors and allow these firms to exert significant influence over market dynamics by owning underlying assets.
• 😀 BlackRock, Vanguard, and State Street are often the largest shareholders of any given large-cap stock or major index, surpassing all other investors combined.
• 😀 These financial giants profit by buying assets in bulk at discounted prices during demand periods and selling them at higher prices to retail investors.
• 😀 Investors never directly own the underlying assets when investing in ETFs; they rely on these firms as custodians to hold and manage their investments.
• 😀 The CUT Net Positions indicator is a tool used to track institutional buying and selling behaviors, predicting price movements based on large market orders.
• 😀 Individual traders can replicate institutional behavior by using indicators like CUT, combined with supply and demand analysis, to time their market entries and exits.
• 😀 Many individual traders, even those with moderate account sizes ($50,000–$100,000), are successfully using these strategies to profit by following institutional market movements.
• 😀 Despite the influence and size of institutions like BlackRock, individual traders can still succeed by strategically mimicking their moves, focusing on supply and demand principles.
• 😀 There is a growing awareness of the wealth inequality created by these financial institutions, with figures like Bernie Sanders pushing for public recognition of their influence on the market.

Q & A

What is the primary topic of the script?

The primary topic of the script revolves around the influence of large Wall Street firms like BlackRock, Vanguard, and State Street on the stock market and how individual traders can replicate their strategies for success.

What role do BlackRock, Vanguard, and State Street play in the financial landscape?

These three firms control significant portions of the stock market, owning or influencing major companies through their vast holdings in ETFs and other investment vehicles. Together, they dominate market movements and exert immense power over the economy.

Why does Bernie Sanders criticize firms like BlackRock on the Joe Rogan podcast?

Bernie Sanders criticizes these firms for their massive concentration of wealth and influence, highlighting how they control large segments of the economy, including major corporations, through their investments and ownership stakes.

How do ETFs work and how are these firms involved with them?

ETFs (Exchange-Traded Funds) are investment funds that hold a collection of assets like stocks, bonds, or commodities. Firms like BlackRock, Vanguard, and State Street manage these ETFs, enabling individual investors to gain exposure to various assets. These firms profit by facilitating the buying and selling of shares in ETFs, while maintaining control over the underlying assets.

What is the significance of institutional investors like BlackRock, Vanguard, and State Street in terms of stock ownership?

These firms often hold more shares of major stocks than all other investors combined. Their massive capital and market influence allow them to dominate the ownership structure of public companies, thus controlling large portions of the market.

How do these firms make profits from the stock market?

They buy assets in bulk, often at a discount, during times of high demand, and then sell them to retail traders at inflated prices. This process allows them to profit from market fluctuations by leveraging their large pools of capital.

What is the CUT Net Positions indicator and how is it useful in trading?

The CUT Net Positions indicator tracks the buying and selling behavior of institutional traders in the futures market. Unlike traditional indicators that react to price movements, the CUT indicator is predictive, helping traders identify future price trends based on institutional market activity.

How can individual traders replicate the strategies of large institutional traders?

Individual traders can replicate the strategies of firms like BlackRock by using similar tools and indicators, such as the CUT Net Positions indicator, and applying principles of supply and demand to time their entries and exits. The key is to follow the buying and selling patterns of major institutions.

Why is it important for traders to align with institutional investors' strategies?

Aligning with institutional investors is crucial because these firms have the resources and market insights to drive major price movements. By following their strategies, individual traders can position themselves for more successful trades and avoid being on the losing side of market decisions.

What can be expected from the future of individual trading, according to the script?

The script predicts a rise in individual traders as knowledge of institutional strategies becomes more accessible, aided by public figures like Bernie Sanders raising awareness about the concentration of wealth in the hands of major financial institutions. This could lead to more people participating in the stock market and challenging the dominance of these large firms.