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

To: Arthur Tang who wrote (809)	5/27/1998 10:47:00 AM
From: Arthur Tang	Read Replies (1) \| Respond to of 1471

Market making revisited. Market making to move stocks is based on two main factors. One is greed and fear. People fall in love with a stock and got greedy, and will buy regardless of risks. People then get scared and can not tolerated a moment to dispose their holdings at a loss. Then, there is the strong hands and weak hands factor. Strong hands are not market makers' good customers. They buy and never sell. The weak hands fell in love with the stock and overbought. They take profits and drive the price down. Market makers borrow stocks to satisfy the weak hands. Then, they buy back from the weak hands to make a living. Greed and fear then is the psychology to promote weak hands to leave their money on the table. Worse yet, if you are a big stockholder, the specialists and some market makers will take 4 weeks to find a buyer for you at some low price, which only you lose money. The small investors still trade at the daily round lot prices.