Trade What You See, Not What You Think Message Board

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Strategies & Market Trends : Trade What You See, Not What You Think

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To: Threei who started this subject	10/17/2000 4:49:51 PM
From: chris-	of 867

Part 3... Please realize that tricks are not illegal, but are simple happenings that are no different from the message board screamers. There is no difference in the guy that says this medical device is going to bring in millions trying to entice buyers and the Market Maker that flashes huge bids to try and show strong support at “x” price to entice buying. Even if there was, as long as we understand that they are trying to lead us down the “obvious” path and we can respond accordingly, then we have progressed out of the early speculator stage. We are still falling for “new” things seen and shown but we are developing a database of information and events that shield us from making mistakes by following the obvious path. We are observing the psychology of other market participants through price and volume and responding to our observations within that time frame. Normally this stage of speculation is still met with some profit resistance as a trader struggles through the application of emotion control. Emotion control is by far the biggest key to the end result as a successful trader. Again, back in the last 1600’s, and still true today, Joseph Penso de la Vega stated that “There are many occassions in which every speculator seems to have two bodies, so that astonished observers see a human being fighting himself.” We see many times a trader thinking that he sees something that is not there. Each uptick when in a long position is great, while each downtick is the worst thing possible. They enter a long position and see every market index or future’s uptick as positive and market downtick as negative. They try to support long positions with all the good news they can both written in headlines as well as broader market moves themselves. When the trader steps back emotionally unattached to the trade, they see what matters. The tape itself. We often see too many times a stock that goes against the broader trend to rely on the illusion that a stock will ‘always’ follow the market or that some unrelated stock within separated sectors will follow each other. While a few stocks may follow each other, day to day, they aren’t the same with a high degree of certainty. In each case, the tape of that stock and what is readable is what matters.

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