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Insider Activity

One thing I get asked quite a bit about is insider activity. People want to know if a stock should move up on insider buying, or if it should go down on insider selling. Many will ignore perfectly good chart patterns [1] if the insider activity doesn’t suit them, instead deferring to what company execs are doing over time rather than catch a swing trade [2] for a multi-day move.

My personal stance on the topic is a simple one: I ignore it. Here are a few reasons why:

Good trades still boil down to the charts and managing your risk. Don’t jump to any conclusions that a CEO or CFO is going to nail trades in their company’s stock. They aren’t traders, they’re businessmen! If you’re a short-term trader, insider activity should be the last thing on your list of things to consider before buying or selling any given stock.

Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service
www.TheStockBandit.com [3]

[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]