Editor’s note: What if there was a way to consistently buy stocks just as the smart money starts pouring in? Today—to kick off a special series in The Jolt—Chief Trader Justin Spittler shares a simple tool that can help you do just that.

If you missed Justin’s One Chart to Rule Them All video showcase, where he explained how to dramatically up your odds of being on the right side of the markets every week, please go here now. He just released the video this morning.

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Imagine you’re sitting at a bar in Manhattan.

As the bartender’s making your drink, you overhear a conversation from the table behind you.

Two well-dressed men are talking. One looks familiar. He’s a hedge fund manager you’ve seen on TV.

You don’t recognize the other guy. But, from the sound of it, they work together.

They’re talking excitedly about one stock... and how they bought $1 billion worth of it today. By the end of the week, they plan to buy several billion more.

• What would you do if you overheard this?

You’d be smart to buy that stock first thing the next morning.

After all, hedge funds are what’s known as “smart money.” They’re among the world’s most connected and sophisticated investors.

More important, they control a lot of money. When they concentrate billions into one stock, that stock will often surge.

Unfortunately, the chances of overhearing a conversation like this are slim to none. But there is a reliable way to know what stocks hedge funds are buying…

• Today, I’ll show you a unique way to “front-run” hedge funds.

Master this “tool,” and you’ll be able to consistently buy stocks just as the smart money starts pouring in.

To be clear, I’m not talking about reading SEC filings like “13Fs.” As you may know, big hedge funds are required to disclose the stocks they’re buying and selling on a quarterly basis in 13Fs.

Anyone can read 13Fs online. Many rookie traders try to use them to “read the tea leaves” on what hedge funds are buying.

Problem is, by the time a 13F is released, the information in it is stale. It tells you what the hedge fund did in the last three months. To profit from this information, you need to know what hedge funds are buying now.

• That’s why you should pay close attention to trading volume.

Trading volume measures how many shares of a stock trade hands over a given period.

For a trader like me, volume is easily the most important indicator after price... because it clues me into when hedge funds are quietly loading up on a stock.

You see, hedge funds don’t invest like you or I do. Remember, they often control billions of dollars. So when they’re investing in a company, they won’t buy millions of shares all at once. Instead, they’ll “scale in” to a stock over weeks or months.

They do this for two reasons: to prevent the price from spiking... and to hide their actions from others who would front-run them.

• Hedge funds go to great lengths to hide their tracks…

But they can’t hide volume.

Huge volume is a telltale sign that hedge funds and other big institutions are buying a stock. But remember, they want to be discreet. So, you’re not going to see a 1,000% volume spike.

Instead, look for noticeable increases. I’m talking 10%, 20%, or 50% above normal trading volume. This sort of rising volume often lets me know that “someone big” is buying the stock.

And remember, these surges in trading volume are not a secret.

Anyone can see them by pulling up a basic chart.

• Here’s how I used volume to recommend a stock for my premium subscribers...

In January 2020, I recommended fast-moving stock CrowdStrike (CRWD) to my readers. It’s a well-known company these days. But in 2020, it was smaller and under the radar.

Look at the vertical bars at the bottom:

Source: StockCharts

In late 2019, I noticed an unusual uptick in volume. You can clearly see this in the blue box above. This told me the smart money was building a position in CrowdStrike.

(It was later reported the buyer was none other than hedge fund billionaire Steven Cohen.)

Shares took a downturn in March 2020 due to the coronavirus meltdown. But as you can see, they recovered in a flash… and shot to new highs by June.

By buying shares in explosive stocks when the smart money leaves its “footprints,” we can position ourselves before the masses pile in.

I use this tool all the time. Another example is 10X Genomics (TXG)…

I recommended TXG in June 2020, saying at the time: “Heavy volume has been pouring into the stock since the broad market bottomed in March, which is another sign of strong institutional demand.”

We booked a 107% gain in 14 months.

In March of this year, I recommended Carrier Global Corp. (CARR)—which sells heating, ventilation, and air conditioning solutions—saying:

A breakout here would be extremely bullish. And there’s a good chance that’ll happen soon… To understand why, let’s take a look at CARR’s daily chart.

Here, we can see heavy buying volume pouring into the stock over the past few days. This is very bullish. After all, big buying volume often precedes big moves to the upside.

Source: StockCharts

I believe it can hit $80 within the next 12–18 months.

CARR hit $80/share earlier this year, even faster than I anticipated.

In short: Don’t ignore those vertical bars...

They’ll clue you into what the smart money is really doing…

And let you ride the wave higher… before it becomes big news.

Justin Spittler
Chief Trader, RiskHedge

PS: I just released my first-ever on-camera walkthrough of the proprietary indicator I use to make money in the markets.

This chart helps me pick the right trades every week because it tells me what kind of market environment we’re in. Is it time to get aggressive or play defense? That’s a super important question to get right every week, especially with the election around the corner.

Check it out here.