|
PureBytes Links
Trading Reference Links
|
So technical analysis is about supply and demand, prices, fear, greed and
indecision.
And as the snips below outline(from past Omega posts) it is also about
manipulation by a group that makes the rules, and by the way can change the
rules anytime they want(Hunt Brothers??). They nicely collect money from
you coming, going, and in the middle because they are the middle.
>>> snip <<<< - The trading floor or the NYSE specialist tends to run stops
before a
change in direction causing a short countermove before a major move. -
>>> snip <<<< NASDAQ Level II had some merit prior to rule changes that went
into effect on NASDAQ in early 1997. Since then, it has become less and
less useful. I used it over two years ago and it was evident that Market
Makers regularly mis-represent the size of their positions in an effort to
create an illusion in their favor. I spent several days keeping stats on
which way a potential trade would run-- based on the conventional
interpretation of reading a Level II screen, versus the exact opposite
scenario occurring. My informal observations showed me that it was 50/50 as
to whether or not the Market would follow the conventional interpretation or
run off in the opposite direction. I recently saw an advertisement for a
training seminar on how to successfully mis-represent your Level II
position-- from a Broker offering Level II trading. Imo, the head-fake
scenario was frequently a result of the Market Makers working together
against the sea of little guys to flip a trade in their favor. The only
advantage of having a Level II ECN was the ability to enter and exit a
position with the click of a Mouse, in 1/100th of a second, from 5000 miles
away from the Exchange. Very useful in bailing from a large position that
will cost you a several thousand dollar loss if allowed to exist for the
next 30 seconds. > > Draw your own conclusions –
>>> snip <<<<The intimidation factor is a very real thing. At ADT it was
mentioned butit less graphics terms.A titan local can do this. (A real event
of several I have witnessed). 25 on a 100, a 100 at 25. All of a sudden, the
pit becomes more subdue, ina matter of minutes, your bollinger bands starts
to constrict. And remember, same price is ascratch, no cost at all.The guy
wants to buy and brings the price down 15-20 ticks doing this afterthe
initial drama.1 at 24, some takers, he goes 1 at 24, all volume absorbed
soon.1 at 23. Old hands know his game and that the ammo in his ammo belt is
morethan theirs and thesmallers won't challenge which and when only then can
they will overpowerhis ammo dump (if and until partner arrives to clean up.
So no challenge.)1 at 22, ... 1 at 11. Some paper comes in to challenge.
Line handlers havebeen busy with their clients informing them of the
"situation". Well, at a significantly lower price, demand and supply
reestablishes "equilibrium" and he fills his position, whether closing
oropening you don't know cos he uses the desk also. At the same time with
this exercise, hecontinues the legend and renews the reputation.After a
number of trades get done about 15-25 ticks away from when thelocal started
his action, prices goes back to where it was ...And you were stopped out?
Well smack his bottom baby ...
I guess one of my questions is to those who have traded for many years, upon
reflection - first starting out in technical analysis/trading, would know
the balance that you use now between recognizing regular or normal(if there
is such a thing) prices and patterns(probably your main focus starting out)
and then those that are manipulation and part of "the game." Analyzing your
trading style, are you surprised to see what side of the coin you have to
play to be successful ? Do your trading systems take these factors, if any,
into consideration? If this is one of the "edges" that one must learn over
time it is a steep and painful learning curve. A constant learning process
to play in their game. You have learned and earned, with hard work, an
edge. But the true edge will always and forever be their domain in their
game.
Just barking some thoughts up a tree…
Now is that manipulation study in Omega 2000 an indicator or a paint bar???
|