what are they up to? Do you care?

[arabianights]

You can't do a statistical test on a story (e.g. 'Central Bank is selling $XXXX').

Although let me give an exception which proves this rule. IBM was buying someone or other (from memory it was buying shares in Intel... or this may have been the other way round) and would buy puts at the same time to hedge its holding against price falls. IBM would go to the less liquid options market first and then buy the underlying. Renaissance Capital noticed that large put buying was almost immediately followed 30 seconds later by someone buying the share. So when they saw the put buying they would buy the share and hopefully sell it to big blue for a couple of cents profit in 30 seconds or so.

Now, you can easily do a test on the transaction pattern. But another possible explanation for the above would be a change in an OTC hedge from the options market to the underlying market (for example). Now, if you had convinced yourself that it was the latter I suspect there's a danger you'd be trying to come up with far more sophisticated strategies to take advantage of this... and you'd get it all horribly wrong because you were wrong in the first place.

All comes back to Rumsfeld, known knowns, known unknowns and unknown unknowns

 

[foredog]

Please excuse the aggresive tone...but...

So what if stop hunting goes on...get over it.

Adapt to this and trade once a break is well under way or on the pullback or just see it as a nother business expense.

If you're shrewd enough you'll get stopped out for 5 on the fakes but make 25 on the real ones....

 

[wasp]

exactly, it doesn't matter if it does or not, or false breaks etc... my point is not 'it doesn't happen' but as you say, do you consider it? Do you work it in to your methods? How do you define it? Do you know when it is happening? Do you consider it? (etc...)

These things may or may not happen but, are you thinking about it or just waiting for a S/R level, a trendline break, a pinbar or Ross Hook as if you are, you may as well just whack on the macD...

 

[DaxDestroyer]

Okay, take an extremely liquid market like the Euro....

IB's and hedge funds are trading huge sizes so they need liquidity to get in at a good price, but, unlike stocks and shares, there doesn't need to be a buyer for every seller as there are many other elements (ie commerce).

Now, apart from the few, most hedge funds and IB's for clients, are just as ignorant as the average retailer, just trying to get the best prices for their clients and make as much $% as possible.

I know a few hedge fund traders who certainly don't go into the euro looking to suck anybody into anything, they are struggling as hard as everyone else to be the best and have their best R:R possible.

CB's just do what they have to when they have to, IB's and HF's are looking for the best prices and retailers are just trying to survive... Everyone is trying to guage what the institutions and CB's are intending and trying to get in with them.

I'm not saying it doesn't happen but, I think too much is read into 'stop hunting' and 'false breaks' and 'sucking people in', ther is no elite manipulation group, just alot of money as ignorant and dumb as the next and the last.

Don't get me wrong! I'm not a believer in the elite manipulation group, BUT I KNOW(!), that there exists a PPT and I KNOW, that the Bundesbank IS playing the markets using TECHNICAL SYSTEMS to have MAXIMUM IMPACT.

The real reason is the nature of the markets. If everybody is "fine" with prices, you have range trading. A trend evolves always, when many people have WRONG positions and have to run for cover This is what I meant.

So the "daily manipulation" is done by the intelligent players, who are (ab)using the shortterm flow (=guys who have to trade as they are paid for or guys who think they have as there is "news"). IF they manage to suck them into a position, they can slaughter them afterwards

 

[foredog]

exactly, it doesn't matter if it does or not, or false breaks etc... my point is not 'it doesn't happen' but as you say, do you consider it? Do you work it in to your methods? How do you define it? Do you know when it is happening? Do you consider it? (etc...)

Good points Wasp.

I don't worry about the fakes.

if it breaks below that line sell, if it doesn't keep going then your stop will take care of that.
Trying to figure out which are real and which aren't will drive you mad and you'll miss some of the good ones by tring to miss the bad ones

 

[DaxDestroyer]

exactly, it doesn't matter if it does or not, or false breaks etc... my point is not 'it doesn't happen' but as you say, do you consider it? Do you work it in to your methods? How do you define it? Do you know when it is happening? Do you consider it? (etc...)

Everything happens and everything should be considered. But at the end, you need your systems / systematic approaches and you just trade. If you combine an edge with a bit of intelligent money management, you are there, in the GREEN.

What else would we want?

 

[wasp]

Everything happens and everything should be considered. But at the end, you need your systems / systematic approaches and you just trade. If you combine an edge with a bit of intelligent money management, you are there, in the GREEN.

What else would we want?

Which circles us back to the original thread reason and the poll....

Trendie is trying to decipher if he can achieve better results, as we all do, and there is only one way of doing this, further understanding and getting better W/L ratios.

Otherwise, you fall into group 1 and 'as long as you make money, who cares'... which, I am all for, don't get me wrong, but like the car example, I prefer to understand what is happening under the bonnet to be a better driver, than to just accept, by pressing accelerator and brake at the right times, will get me from A to B alive.

 

[arabianights]

right, but imagine if you couldn't open the bonnet, and all you had to learn about cars was a 1930s highway code and an engineering manual for a 747. You might try to improve the car by giving it wings and perhaps start smoking a pipe. Would this be an improvement?

 

[foredog]

If it's a Rover...YES

 

[DaxDestroyer]

If it's a Rover...YES

 

[wasp]

right, but imagine if you couldn't open the bonnet, and all you had to learn about cars was a 1930s highway code and an engineering manual for a 747. You might try to improve the car by giving it wings and perhaps start smoking a pipe. Would this be an improvement?

... Yes, retailers are limited in the information and knowledge that those, say Gammajammer have access too, but, the charts, studied and analysed enough do tell more than an 747 on a conveyor belt manual.

Newbies are too attuned to the usual educational system that books tell all and believe everything they read when in truth, they are made to sell and make the author money, and the real study needs to be done from the charts.

One doesn't need to know Russia's CB economic views and goals for the next 2 months to see in the charts, the main larger participants intent.

 

[arabianights]

but how will you ever know that it is really the larger participants' intent? Even if you develop 100% foresight from studying charts that isn't enough to tell you that your reasoning bears any basis to the reality... where as knowing that if price does xyz then usualy abc happens is testable, dig

Also, most of the larger participants are wrong too

 

[wasp]

You won't for sure, neither does GJ, but he is more aware in his position granted. One can be more consistent within their approach though if when price reaches a level of S/R, if rather than just a 'failure to Breach', or a break and pullback, (trading book cliche 101) they spent more time studying the action at these levels, and how the participants usually play these things, they would be more attuned to the next events to unfold...

 

[Paul71]

In a sort of follow on from Trendie's 'different or better' thread....

There are 2 types of retail trader imo, one who just wants a sure fire consistent income, and the other who wants just that, but is also driven by understanding and learning and really trying to get to the core of his market like Neo at the end of the matrix and truly 'understand'. See attached.

So why is this in the psychology, not general or first steps thread?

From Mr Stochastic to Wykoff and Ross hooks.... These are all 'ways of making money' from the markets, giving a higher % ROI with minimal W/L and high R:R but do they make you understand more? Not in my view...

So where are you in the poll?

______________________________

So this thread is for opinions when it comes to reading between the lines...

Big boys, Big money, smart money, strong hands... call them what you will... We all see a chart, see major S/R, hear the UK or US news, see triangles, pendants, channels, moving average crosses but who tries to look through the chart (per attachment)...

A certain member posts charts into the future and explains a lot of the action with strong hands sucking in weak hands, or, you will hear lots of talk about stop hunting...

Sounds plausible and this changes obviously to the market as there are different participants and its easier to manipulate a stock but are there a group out there in each market moving it around and doing what they want per the above, or is everyone, from CB's to hedge funds and the herd, just trying to buy low and sell high.... Do you consider it?... Does this come into your thoughts when you see S/R 'holding' only for a spike to appear... Was that stop hunting? Was that an IB filling a better price for a client....? Is everyone on the NYSE floor after a good fill or better price or trying to screw each other over....

So for the benefit of all, those of you who try to look behind the candles, what are your thoughts?

Despite good earnings, did stock A rise because the last quarter reports were good or because the 'smart hands' took it below S/R to suck in shorts?

Did cable tank because of poor retail sales or because the BoE had something else going on at the same time?

how much of the market behaviour is manipulation of stops and orders and screwing the herd and the 'weak hands' or is everyone as ignorant and your stop was taken out because a client at a hedge fund wanted price up higher for his short position....

Do you think about it, do you care, what's your opinion?

Mmmm, i've voted for the top option, 'give me the money'. I personally believe that my own insight has probably come as far as it's going to, which isn't really that far in certain terms. It's all there on the table so to speak, if we are talking about transparency. I personally believe i've put too much effort into 'thinking' in the past, it just wasn't worth it, but i'm glad i've got certain things out of my system.


Joe Ross, "trade what you see not what you think", that's a very 'healthy' attitude to have, if you ask me.