Stocks are experiencing a mild sell-off this afternoon. And to be honest, it’s been a painfully slow day in terms of trading. That said, it’s days like this that could really hurt a trader.
Well, it’s not easy to sit on your hands, stay patient, and wait for the right opportunities. Sometimes traders force trades and try to create something out of nothing… which ends up hurting them.
What should you do on the days when the market is just chopping around?
Well, there are several constructive things you can do to improve your trading without placing a single trade.
For example, you can review past trades to figure out where your strengths and weaknesses are. You can also try to learn a new strategy… or … catch up on some reading.
How am I going to spend my time?
Later this afternoon, I’m going to hop on YouTube live, and I’m going to teach you about an indicator I use…(bookmark this page, I’m going live at 4:30 PM ET)
Now, this is a fundamental indicator and not one you’ll find on a chart. I call it the “smart money” indicator….
What am I talking about?
I’m talking about corporate filings… specifically, the 13F and Form 4.
These forms which are free and readily available tell us when institutions (hedge funds and mutual funds)… as well as… when corporate insiders increase or decrease their stake in a publicly trading company.
Over the last four years, I’ve averaged over $1M in trading profits…and you know what?
(I’ve been able to consistently make money by having a plan and executing on it…if you want a more disciplined approach to your trading then join me for Sniper Report.)
A lot of my best ideas have been found after reading 13F’s and Form 4 files… keep reading to learn about where you can find them, how to read them, and how I use them to make money.
Now, an SEC Form 4 just tells us when corporate insiders buy or sell stock, options, or other securities. More specifically, the U.S Securities and Exchange Commission requires company insiders to report whenever there is a material change in their positions. These corporate insiders include directions, officers, and any shareholders with 10% or more ownership of the company’s outstanding shares.
I don’t know about you… but the SEC Form 4 provides us with a lot of information.
You see, when an insider buys stock… it lets us know there could be a bullish catalyst in the cards. On the other hand, if an insider sells stock… there might be bearish news in the coming days or weeks.
For example, here’s a look at an SEC Form 4 filing for Revlon Inc. (REV).
Ronald Perelman, who is a director and owns 10%+ of the company, acquired shares (as shown by the letter “A” in the filing).
I don’t know about you, but if a corporate insider buys stock… they’re not just buying shares for the fun of it… they know something bullish will happen – a catalyst event that retail traders aren’t privy to know about.
Check out the hourly chart on REV…
Now, the Form 4 filing must be filed with the SEC whenever there is a material change of an insider’s positions… and it must be filed within two business days from the end of the day the transaction occurred. If the corporate insider fails to do so, they could face civil or criminal suits.
Moving on, I focus on another SEC filing, the Form 13F.
SEC Filings – Form 13F
Institutional investment managers in the U.S. with over $100M or more in securities must report its holdings in the Form 13F with the SEC.
Basically, it’s like the Form 4 filing, but for institutional money managers. However, institutional managers with $100M+ must disclose all buys and sells within 45 days within the end of a quarter.
There’s also the 13G filing. This filing is for those who own at least 5% of a class of stock in a specific company.
How is this helpful when we’re trading?
Well, it helps to follow the smart money, and figure out what they’re thinking.
One helpful tool for SEC Form 13F filings is Whale Wisdom. You can check out institutional investment managers (those with $100M+ in securities) and their holdings in Skyworks Solutions Inc (SWKS) here. As you can see, there are over 700 13F filings from institutions holding SWKS, according to the SEC… that’s a capital invested increase of over 40%!
Not only that, there have been a number of Form 13G filings, which you can check out on the SEC Edgar database.
Now, if this is all unclear to you… make sure to check out the RagingBull YouTube page… there’s going to be a lesson in which I teach you about SEC Form 4 and Form 13F filings.
Make sure to check me out later today as I go over this very topic live on YouTube. Bookmark this page or join me (bring your questions) today at 4:30 PM ET using this link.