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Strategies & Market Trends : Trade What You See, Not What You Think -- Ignore unavailable to you. Want to Upgrade?

To: LPS5 who wrote (65)	10/16/2000 12:23:31 PM
From: TraderAlan	Read Replies (1) \| Respond to of 867

LP, I see two other forces at work here. First is the "conspiracy of common knowledge". Retail traders are not creative at all in the placement of their stops. They put them above resistance and below support, either from well-marked highs or lows, round numbers or trendline breaks. Now, how price gets to these points is the issue. Some look at it as manipulation. You know a lot more about that than I do <g>. I believe that markets swing and reverse when supply in one direction depletes itself or demand builds in the other direction. Markets draw themselves to these levels because neither event occurs until the stops are reached. They spike volume and deplete supply. This causes a price pop that encourages demand. The wild cards these days are all the contrary strategies that no longer buy trendlines and bottoms or sell tops. So many traders just sit back and wait for the violations and use the stops as sacrificial lambs to enter in the other direction. Since they represent new demand that stands aside, price cuts through the S/R "like buttah" until they act. Alan