Market Manipulation...
Ok so run with this thought for a moment. Say there is no doubt that the market is manipulated on every level. That Bernie Madoff is correct in saying the game is rigged. If we come to this conclusion then we can stop being a victim of the markets right. Just as a precursor I do believe that in most cases they are rigged. Absolutely and without doubt. I have been a day trader long enough to know that this is simply correct and if you don't protect against it I don't care how astute you are or how smart you think that you are you are going to lose.
If you are a price action person like myself you can see that set ups occur every day. When you least expect it that is when it happens. Back in 2010 I thought I knew beyond a shadow of doubt that the stock indexes were going down. After all demographics were failing and the economy was over indebted along with a host of other fundamental factors that would in no uncertain terms cause you to believe the perma bears. Well suffice to say I took a large loss and continued to ignore what price was clearly telling me. What was it telling me? "You are wrong". Period!
That was the last time it ever happened. I should say that it happened too after I became a profitable trader. Can you make money knowing the markets are manipulated? Sure there are a lot of different cases of individuals over the years who have done it. People who are masters at knowing when they are wrong and right.
You see to do well in the markets you first have to admit that you don't know anything. You can have the strongest conviction in the world and still be wrong. For example the other day oil inventories came out with an enormous deviation from expectations showing that inventories were at all time highs. It should have tanked oil to at least 4 dollars below where it was at 34.40 area. Well it did go down, briefly I might add, and then turned on a dime (for no reason what so ever) and rocketed the other way for a new high.
Why? No other reason then traders in mass selling into the weakness. Same reasons why horrible data emerges from the US and stocks race higher.
You can bitch and complain about it or you can accept the fact that when one person loses somewhere another is winning. That is always how the markets work. It goes hand in hand with my post at Almach the other day where I explained why the buy and hold strategy is a myth. I don't care what the data shows we don't know that the markets would have quit falling after mom and pop sold. We don't know that at all. We know it likely happened because that is how the investment banks and hedge funds make money. When you sell they buy and vice versa. So when they are accumulating buys at the bottom of the market so that it can rise again who do you think is providing the entries? Right, mom and pop who bought at the top and are now selling at the bottom. The pain gets too great like someone holding a trade going badly against them. Eventually you cut your loss and throw your hands in the air and give up. It is human nature. You can only take a beating for so long before you throw in the towel.
Same reason why the EURO will head to 1.2500 at least this year. Everyone thinks it is headed lower. They might be right but that is not how I am playing it.
So remember to make price your friend. Design a system around it so that you clearly know when and where you are wrong. Most importantly, don't ignore it when it tells you that you are wrong.
All the best.
If you are a price action person like myself you can see that set ups occur every day. When you least expect it that is when it happens. Back in 2010 I thought I knew beyond a shadow of doubt that the stock indexes were going down. After all demographics were failing and the economy was over indebted along with a host of other fundamental factors that would in no uncertain terms cause you to believe the perma bears. Well suffice to say I took a large loss and continued to ignore what price was clearly telling me. What was it telling me? "You are wrong". Period!
That was the last time it ever happened. I should say that it happened too after I became a profitable trader. Can you make money knowing the markets are manipulated? Sure there are a lot of different cases of individuals over the years who have done it. People who are masters at knowing when they are wrong and right.
You see to do well in the markets you first have to admit that you don't know anything. You can have the strongest conviction in the world and still be wrong. For example the other day oil inventories came out with an enormous deviation from expectations showing that inventories were at all time highs. It should have tanked oil to at least 4 dollars below where it was at 34.40 area. Well it did go down, briefly I might add, and then turned on a dime (for no reason what so ever) and rocketed the other way for a new high.
Why? No other reason then traders in mass selling into the weakness. Same reasons why horrible data emerges from the US and stocks race higher.
You can bitch and complain about it or you can accept the fact that when one person loses somewhere another is winning. That is always how the markets work. It goes hand in hand with my post at Almach the other day where I explained why the buy and hold strategy is a myth. I don't care what the data shows we don't know that the markets would have quit falling after mom and pop sold. We don't know that at all. We know it likely happened because that is how the investment banks and hedge funds make money. When you sell they buy and vice versa. So when they are accumulating buys at the bottom of the market so that it can rise again who do you think is providing the entries? Right, mom and pop who bought at the top and are now selling at the bottom. The pain gets too great like someone holding a trade going badly against them. Eventually you cut your loss and throw your hands in the air and give up. It is human nature. You can only take a beating for so long before you throw in the towel.
Same reason why the EURO will head to 1.2500 at least this year. Everyone thinks it is headed lower. They might be right but that is not how I am playing it.
So remember to make price your friend. Design a system around it so that you clearly know when and where you are wrong. Most importantly, don't ignore it when it tells you that you are wrong.
All the best.
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