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Strategies & Market Trends : Classic TA Workplace

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To: Galirayo who wrote (137742)10/21/2006 3:57:28 PM
From: skinowski  Read Replies (1) of 209892
 
Don't they just make the market and flow with the ebb and tide?

Precisely. At least as related to financial markets - they are a buyer to every seller, and a seller to every buyer - they by definition must take the opposite side of trades. But - if they must short into a rally, they'll demand a premium for their risk, and if they must buy into a decline, they'll bring the price lower and lower, and load up cheap.

They are "smart money" NOT because of any superior intelligence, but because the crowd is usually wrong - "investraders" push things too far and end up loading up into the wrong extreme.
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