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Strategies & Market Trends : Technical Analysis - Beginners -- Ignore unavailable to you. Want to Upgrade?

To: LWolf who wrote (7174)	12/2/1997 12:41:00 PM
From: Robert Graham	Respond to of 12039

I think the second stock referred to in the article is close to the example Bob had regarding floor traders making a profit on exagerated price (which happens more often in the futures market, but the regular equity market is not immune). I thinkk this is more likely to happen with more illiquid issues of stock, and the MM of the NASDAQ. So I think much of the same stuff happens with the stock market, but perhaps in a little different way, and in some cases, not as much. Humand beaign are humand beings no matter where thay are. Many look for that "easy" or "guarenteed" dollar. They wa tthe "edge" over everyone else and they are willing to move into the grey areas of ethic, and with some into illegal actions, to obtain that "edge". And in this context, I ind that most of them pretty much think in the same ways. I think even many normally ethical people can allow themselves to be pulled into these grey areas. After all, the are on the floor responding to the chaos that can run rampant at times of the floor, and it is normally an anxiety inducing just where in short order you can see your sizable investment disappear. It is too easy to get pullled into the "fear" or "greed" swings of the market. Floor trading and its equivalents are very difficult ways in making money. Over 90% do not make it even as a day trader, where they can support themselves comfortably. So in this situation, after getting tossed around for a period of time, after seeing your cahs go from $100,000 to $80,000 to $70,000 to $120,000, to $110,000, where my point here is there can be large swings, no wonder some in order to survive move naturally to the grey areas of trading. And the MMs are human beings too. I am not condoning htese practices. But I suspect most people who attempt to survive the floor trading experience learn quickly how important it is to be pragmatic, that is if they are to survive. SO those "lines" between what is "proper" or "legal" and what is not become blurred if they are not very careful. ANd when you find other traders operating well into this grey area, it becomes even more of a jungle to those other traders. I read somewhere in an article about that story of the "mob" manipulating the price of the stock: "I have never found a market that the mob did not want to manipulate". I think someone in the FBI said this. Their description of the racket reminded me of the boiler room operations of the past, which IMO do indeed have their form in current day markets, but not anywhere as frequent or as obvious. Matter of fact, the SEC is currently looking into changes in regulation that pertain to cold calling by brokers. Manipulation in the way the mob attempted to manipulate the stock is not new. This has been around for just about as long as the stock market as been around. And despite all the rules and regulations, forms of it still happens. It is just that what the mob did was more blatant than most in recent history. And look at the incidents of "cooking the books" by the high-tech companeis. For the SEC rules and regulations against this practice, it does happen all too frequently. Just some thoughts of mine. So in summation, and in an attempt to take this post and move it back toward the topic of this thread, I want to say that TA is not the entire picture of a stock and its market. But this can be handled for instance in how a trader manages theri money in trades,where losses are cut quickly and profits are allowed to run. the idea here is to utilize TA as a tool to take the side of the trade that has the odds on your side, and then have money management approach that keeps you from getting into too much trouble (keep alive) when you find that you are on the wrong side of a trade. In this way, you can be around for that next trade. But then this assumes that your approach has mechanisms in place that will allow you to see in a timely manner that you are on the wrong side of a trade. Bob Graham