Lesson 4 of 5 · Dark Pools
When prints matter
Size alone is not enough.
A one-million-share dark pool print on a stock that trades 50 million shares a day is background noise. The same print on a stock averaging two million shares a day represents half a day's normal volume. Context is what makes size meaningful.
Two levels with different significance.
The DARK POOL PRINT 1.2M and DARK POOL PRINT 0.9M labels show raw size. Whether each matters depends on average daily volume for that stock. Check the ratio before deciding whether to mark the level.
What raises the signal.
Large relative to average daily volume is the first filter. After that, check whether the price level has already acted as support or resistance. If multiple revisits saw consistent reactions, the level has real weight. None of those factors alone is sufficient.
Price approaches a dark pool level at resistance.
Reveal what happened
It went up. Price broke out to the upside. When dark pool volume clusters at a resistance level and follow-on volume confirms, the breakout odds improve. This result is probable, not certain.
Which dark pool print is more significant?
Show the answer
A. 5M shares on a stock that averages 6M per day. Significance is relative to typical volume. 5M on a 6M average-volume stock is an unusually large print. On an 80M stock it is ordinary.