Ha! More like "The Great Drunken Panic Buy of 2015"

TA fodder:

Daily chart on this downmove is on declining volume... that's a sign of market strength. I got out of my short around $230.

I've observed that in Bitcoin, secondary tests of lows after selling climaxes (on larger timescales) generally don't play out all the way to the previous low, which would be $160. We might see $200. We bounced off $160 on such high volume that it's going to be one hell of a support level to break back through (expensive for whales, they can't dump forever unless they get the sheep to follow). The lower we go the stronger the reaction rally will be as more supply from weak hands will be siphoned out.

Another reason for the lull is that in the US, everyone is partying for the Super Bowl. I know I'll be away from the charts drinking beer and eating nachos.

My thoughts too... Seems like a shakeout.

Effort Versus Result

Effort to go up is usually seen as a wide spread up-bar, closing on the highs, with increased volume – this is bullish. The volume should not be excessive, as this will show that there is also supply involved in the move (markets do not like very high volume on up-bars).

Conversely, a wide spread down-bar, closing on the lows, on increased volume is bearish, and represents effort to go down. However, to read these bars on your chart, common sense must also be applied, because if there has been an effort to move, then there should be a result. The result of effort can be a positive one or a negative one. For example, on Chart 7 (pushing up through supply), we saw an effort to go up and through resistance to the left. The result of this effort was positive, because the effort to rise was successful – this demonstrates that professional money is not selling.

If the additional effort implied in the higher volume and wide spreads upwards had not resulted in higher prices, we can draw only one conclusion: The high volume seen must have contained more selling than buying. Supply on the opposite side of the market has been swamped by demand from new buyers and slowed or stopped the move. This has now turned into a sign of weakness. Moreover, this sign of weakness does not just simply disappear; it will affect the market for some time.

Markets will frequently have to rest and go sideways after any high volume up-days, because the selling has to disappear before any further up-moves can take place. Remember, selling is resistance to higher prices! The best way for professional traders to find out if the selling has disappeared is to ‘test’ the market – that is, to drive the market down during the day (or other timeframe) to flush out any sellers. If the activity and the volume are low on any drive down in price, the professional traders will immediately know that the selling has dried-up. This now becomes a very strong buy signal for them.

Frequently, you will see effort with no result. For instance, you may observe a bullish rally in progress with sudden high volume appearing – news at this time will almost certainly be ‘good’. However, the next day is down, or has only gone up on a narrow spread, closing in the middle or even the lows. This is an indication of weakness – the market must be weak because if the high activity (high volume) had been bullish, why is the market now reluctant to go up? When reading the market, try to see things in context. If you base your analysis on an effort versus results basis, you will be taking a very sensible and logical approach that detaches you from outside influences, such as ‘news’ items, which are often unwittingly inaccurate with regards to the true reasons for a move. Remember, markets move because of the effects of professional accumulation or distribution. If a market is not supported by professional activity, it will not go very far. It is true that the news will often act as a catalyst for a move (often short-lived), but always keep in mind that it is the underlying activity of ‘smart money’ that provides the effort and the result for any sustained price movement.


The Path of Least Resistance

The following points represent the path of least resistance:

• If selling has decreased on any down-move, the market will then want to go up (no selling pressure).
• If buying has decreased on any up-move, the market will want to fall (no demand), Both these points represent the path of least resistance.
• It takes an increase of buying, on up-days (or bars), to force the market up.
• It takes an increase of selling, on down-days (or bars), to force the market down.
• No selling pressure (no supply) indicates that there is not an increase in selling on any down-move.
• No demand (no buying), shows that there is little buying on any up-move.

Bull moves run longer than bear moves because traders like to take profits. This creates a resistance to up- moves. However, you cannot have a bear market develop from a bull market until the stock bought on the lows has been sold (distributed). Resistance in a bull move represents selling. The professional does not like to have to keep buying into resistance, even if he is bullish. He also wants to take the path of least resistance. To create the path of least resistance he may have to gap-up, shake-out, test, and so on, or he may do nothing at that moment, allowing the market to just drift.

Bear markets run faster than bull markets because a bear market has no support from the major players. Most traders do not like losses and refuse to sell, hoping for a recovery. They may not sell until forced out on the lows. Refusing to sell and accepting small losses, the trader becomes locked-in and then becomes a weak holder, waiting to be shaken out on the lows.


Markets can be Marked Up (or Down)

You cannot help notice how major moves from one price level to another usually happen quickly. This rapid movement from one price level to another is not by chance – it is designed for you to lose money. You can be suddenly locked-into a poor trading position, or locked out of a potentially good trade by one or two days (or bars) of rapid price movement: The Index or stock usually then rests and starts to go sideways. If you have been locked-into a poor trade, you may regain hope, and so will not cover a potentially dangerous position. The next sudden move against you does exactly the same thing, so the process continues.

Conversely, if you are not in the market and have been hesitating or waiting to trade, sudden up- moves will catch you unawares; you are then reluctant to buy into a market where, yesterday, you could have bought cheaper. Eventually a price is reached where you cannot stand the increases in prices any more and you buy, usually at the top!

Market-makers, specialists and other professional traders, are not controlling the market, but simply taking full advantage of market conditions to improve their trading positions. However, they can and will, if market conditions are right, mark the market up or down, if only temporarily, to catch stops and generally put many traders on the wrong side of the market. The volume will usually tell you if this is going on, as it will be low in any mark-up that is not genuine. Yes, they are marking the market either up or down, but if the volume is low, it is telling you that there is reduced trading. If there is no trading going on in one direction, the path of least resistance is generally in the opposite direction!


Manipulation of the Markets

A large percentage of people are surprised to learn that the markets can be manipulated in the ways that we have described. Almost all traders are labouring under various misconceptions.

There are all sorts of professional interests in the world's financial markets: brokers, dealers, banks, trading syndicates, market-makers, and traders with personal interests. Some traders have a strong capital base, some are trading on behalf of others as investment fund managers, pension fund managers, insurance companies and trade union funds, to name but a few.

As in all professions, these professionals operate with varying degrees of competence. We do not have to be concerned by all these activities, or what the news happens to be, because all the trading movements from around the world are funnelled down to a limited number of major players known as market-makers, pit traders or specialist (collectively know as the ‘smart money’ or ‘professional money’). These traders, by law, have to create a market. They are able to see all the sell orders as they arrive, and they can also see all the buy orders as they come in. They may also be filling large blocks of buy or sell orders (with special trading techniques to prevent putting the price up against themselves or their clients). These traders have the significant advantage of being able to see all the stop-loss orders on their screens. They are also aware of ‘inside information’, which they use to trade their own accounts! Despite ‘insider dealing’ being illegal, privileged information is used all the time in direct and indirect means to make huge sums of money.
To put it simply, a professional trader can see the balance of supply and demand far better than anyone else can. This information is dominating their trading activity. Their trading will then create an ongoing price auction.

Floor traders usually complain bitterly if they are asked to modernise, which usually means leaving the floor to trade on computer screens. They will have lost the feel and help of the floor! "I am all in favour of progress, as long as I do not have to change the way I do things", was a passing comment from one London floor trader as he was forced off the trading floor.

Professionals trade in many different ways, ranging from scalping (that is buying the bid and selling the offer) to the long-term accumulation and distribution of stock. You need not be concerned too much with the activity of individuals, or groups of professional traders, because the result of all their trading is shown in the volume and the price spread. Firstly, the volume is telling you how much trading activity there has been. Secondly, the spread or price action is telling you the position the specialists are happy with on this activity (which is why the price spread is so important). All the buying and selling activity from around the world has been averaged down into a 'view' taken by the specialists or market-makers – a view from those traders who have to create a market, can see both sides of the order book, and who trade their own accounts.

However, you do need to recognise that professional traders can do a number of things to better their trading positions: Gapping up or gapping down, shake-outs, testing, and up-thrusts are all moneymaking manoeuvres helping the market-makers to trade successfully, at your expense – it matters not to them, as they do not even know you.

This brings us to the "smoke-filled room syndrome”. Some people may think that when we talk about a moneymaking manoeuvre, some sort of cartel gathers in a smoke-filled room.

"OK chaps, we are going to have a test of supply today. Let's drive the prices down on a few strategic stocks and see if any bears come out of the closet”.

In practice, it does not usually work like that. This sort of thing was much more common many decades ago, before the exchanges were built, and the volume of trading was such, that markets were much easier to manipulate. Now, no single trader, or group of traders, has sufficient financial power to control a market for any significant length of time. True, a large trader buying 200 contracts in a futures market would cause prices to rise for a short time, but unless other buyers joined in, creating a following, the move could not be sustained. If you are trading futures related to the stock market, any move has to have the backing of the underlying stocks; otherwise, your contracts are quickly arbitraged, bringing the price back in line with the cash market.

If we take the example of the 'test of supply', what actually happens is something like this:
Groups of syndicate dealers have been accumulating stock, anticipating higher prices in the future. They may have launched their accumulation campaigns independently. Other traders and specialists note the accumulation and also start buying. Before any substantial up-move can take place they have to be sure that the potential supply (resistance) is out of the market. To do this they can use the ‘test‘. Usually they need a window of opportunity in which to act. They do not collude in the test action directly; they simply have the same aims and objectives and are presented with the same opportunity at the same time.

Market-makers can see windows of opportunity better than most other traders. Good or bad news is an opportunity, so is a lull in trading activity. Late in the trading day, just before a holiday, is often used and so on. As they take these opportunities, reduced effort is required to mark the prices down (this is now cost effective), the market automatically tells them a story. If most of the floating supply has been removed, then the volume will be low (little or no selling). If the floating supply has not been removed, then the volume will be high (somebody is trading actively on the mark-down which means supply is present). If most of the floating supply had been removed from the market, how can you have active trading or high volume? (This point refers specifically to cash markets).

Professional interests frequently band together. Lloyds of London, for example, have trading syndicates, or trading rings, to trade insurance contracts, making their group effort more powerful while spreading the risk. You accept this without question – you know about them because they are well known and have much publicity; you read about them, they are on television, they want the publicity and they want the business.
Similar things go on in the stock market. However, you hear little of these activities, because these traders shun publicity. The last thing they want is for you or anybody else to know that a stock is under accumulation or distribution. They have to keep their activities as secret as possible. They have been known to go to the extremes, producing false rumours (which is far more common than you would perhaps believe), as well as actively selling the stock in the open, but secretly buying it all back, and more, via other routes.

From a practical point of view, professional money consists of a mass of trades, which if large enough, will change the trend of the market. However, this takes time. Their lack of participation is always as important as their active participation. When these traders are not interested in any up-move, you will see low volume, which is known as ‘no demand‘. This is a sure sign that the rally will not last long. It is the activity of the professional traders that causes noticeable changes in volume – not the trading activity of individuals such as you or me.

Top professional traders understand how to read the interrelationship between volume and price action. They also understand human psychology. They know most traders are controlled in varying degrees by the TWO FEARS: The fear of missing out and the fear of losses.

Frequently, they will use good or bad news to better their trading position and to capitalise on known human weaknesses. If the news is bad and if, at that moment, it is to their advantage, the market can be marked down rapidly by the specialist, or market-makers. Weak holders are liable to be shaken out at lower prices (this is very effective if the news appears to be really bad). Stop-loss orders can be triggered, allowing stock to be bought at lower prices. Many traders, who short the market on the bad news, can be locked-in by a rapid recovery. They then have to cover their position, forcing them to buy, helping the professional money, which has been long all the time. In other words, many traders are liable to fall for 'the sting’.

Market-makers in England are allowed to withhold information on large deals for ninety minutes. Even this lengthy period is likely to be extended. Each stock has an average deal size traded and, on any deal, which is three times the average, they can withhold information for ninety minutes. If for example, trading in ICI, the average is 100,000 shares and 300,000 are traded, they can withhold this information for ninety minutes. Their popular explanation for this incredible advantage is that they have to have an edge over all other traders to make a profit large enough to warrant their huge exposure. As these late trades are reported, this not only corrupts the data on one bar, but two bars. To add insult to injury, you are expected to pay exchange fees for deliberate incorrect data.

So professional traders can withhold the price at which they are trading at for ninety minutes or longer, if it suits them. However, the main thing they want to hide from you is not the price, but the VOLUME. Seeing the price will give you either fear or hope, but knowing the volume will give you the facts. In trading other markets around the world, you may not have the same rules, but if the volume is so important in London, it will be just as important in any other market. Markets may differ in some details but all free markets around the world work the same way.

As these market-makers trade their own accounts, what is stopping them trading the futures markets or option markets just before they buy or sell huge blocks of stocks in the cash markets? Is this why the future always appears to move first? Similar things happen in other markets – however, the more liquid or heavily traded a market is, the more difficult it will be to manipulate.

You will frequently see market manipulation and you must expect it. Be on your guard looking for manipulation and be ready to act. Market-makers cannot just mark the price up or down at will, as this is only possible in a thinly traded market – most of the time, this will be too costly a manoeuvre. As we have already pointed out, windows of opportunity are needed; a temporary thinning out of trading orders on their books, or taking full advantage of news items (good or bad).

It is no coincidence that market probes are often seen early in the mornings or very late in the day's trading. There are fewer traders around at these times. Fund managers and traders working for large institutions (we shall refer to these people as ‘non-professional’ to distinguish them from market-makers et al) like to work so called 'normal hours' – they like to settle down, have a cup of coffee, or hold meetings before concentrating on market action. Many traders who are trading other people's money, or who are on salaries, do not have the dedication to be alert very early in the morning. Similarly, by late afternoon, many are tired of trading and want to get home to their families.

During these uncertain times I'd like to share a couple chapters from a very good book by Tom Williams, called Undeclared Secrets That Drive the Stock Market. For years, Tom was a member of a professional trading syndicate that accumulated, held and distributed stocks at higher prices. No doubt he made a great fortune doing this. Most of his ideas and knowledge can be applied to digital currency markets as well. After all, they are traded by people with the same intentions--to make money.


Random Walks and Other Misconceptions

To most people, the sudden moves seen in the stock market are a mystery. Movements seem to be heavily influenced by news and appear when least expected; the market usually does the exact opposite to what it looks like it should be doing, or what your gut feeling tells you it ought to be doing. Sudden moves take place that appear to have little to do with logic: We sometimes observe bear markets in times of financial success, and strong bull markets in the depths of recession.

It seems a place for gamblers, or for those people that work in the City, or on Wall St – who must surely know exactly what is going on! This is a fallacy. If you can take a little time to understand the contents of this book, the heavy burden of confusion will be removed from you forever. The stock market is not difficult to follow if you can read charts correctly, as a top professional would. You’ll understand exactly how to recognise the definitive moments of market action, and the sorts of pre- emptive signs to look out for, just before a market rises or falls. You’ll know how a bull market is created, and also the cause of a bear market. Most of all you will begin to understand how to make money from your new-found knowledge.

The markets are certainly complex – so complex, in fact, that it has been seriously suggested that they move at random. Certainly, there is a suggestion of randomness in the appearance of the charts, irrespective of whether you are looking at stocks or commodities. I suspect however, that those who describe market activity as ‘random’ are simply using the term loosely, and what they really mean is that movements are chaotic. Chaos is not quite the same thing as randomness. In a chaotic system there may be hundreds, or even thousands of variables, each having a bearing on the other. Chaotic systems may appear unpredictable, but as computing technology advances, we will start to find order, where before we saw randomness. Without doubt, it is possible to predict the movements of the financial markets, and as technology advances, we will become better at it. There is an enormous gulf between unpredictability and randomness.

Unless you have some idea of the various causes and effects in the markets, you will undoubtedly, and frequently, be frustrated in your trading. Why did your favourite technical tool, which worked for months, not work "this time" when it really counted? How come your very accurate and detailed fundamental analysis of the performance of XYZ Industries failed to predict the big slide in price two days after you bought 2,000 shares in it?

The stock market appears confusing and complicated, but it is most definitely based on logic. Like any other free market place, prices in the financial markets are controlled by supply and demand – this is no great secret. However, the laws of supply and demand, as observed in the markets, do not behave as one would expect. To be an effective trader, there is a great need to understand how supply and demand can be interpreted under different market conditions, and how you can take advantage of this knowledge. This book will help you to do this – read on...


The Market Professionals

In any business where there is money involved and profits to make, there are professionals. We see professional diamond merchants, professional antique and fine art dealers, professional car dealers and professional wine merchants, among many others. All these people have one thing in mind; they need to make a profit from a price difference to stay in business.

The financial markets are no different and professional traders are also very active in the stock and commodity markets – these people are no less professional than their counterparts in other areas. Doctors are collectively known as professionals, but in practice they split themselves up into specialist groups, focusing on a particular field of medicine – professional market traders do the same and also specialise in various areas.

It’s important to realise at this stage, that when we refer to the definition of a professional, we are not talking about the ‘professionals’ who run your investment fund or pension. At the time of writing this section (June 2003), the vast majority of investment funds have been making huge losses for the last 4 years! Furthermore, some of these investment fund companies (including insurance firms) have even closed down, owing to their inability to invest wisely in the markets. People nearing retirement are extremely worried, as the value of their pension plummets further into the doldrums – some pension companies have even been reported to be teetering on the brink of financial crisis. In the UK, the vast majority (if not all) of the endowment funds are in trouble, even failing to make meagre returns of 6%, which means that most homeowners are now at serious risk of not being able to raise funds to pay for their homes.

The ‘professionals’ in the previous examples do not live by their trading talents, instead they receive a salary from the respective investment or pension fund company – which is just as well, since these people would otherwise be homeless! I make no apology for these scathing comments, since millions of people have been adversely affected on a global scale, and billions of dollars have been lost to the witless idiots who have been given the responsibility of investing your hard-earned money. The truth of the matter is that most fund managers find it difficult to make profits unless there is a raging bull market.

So what do I mean by a professional trader? Well, one example is the private syndicate traders that work in co-ordinated groups to accumulate (buy), or distribute (sell), huge blocks of stock to make similarly huge profits. You can be absolutely certain that these traders have made more money from distributing stock in the last four years, than they did during the bull market in the 1980s. Why? Because we have just witnessed one of the best moneymaking periods in your lifetime – the largest fall in stock prices for decades...


Accumulation and Distribution

Syndicate traders are very good at deciding which of the listed shares are worth buying, and which are best left alone. If they decide to buy into a stock, they are not going to go about it in a haphazard or half-hearted fashion. They will first plan and then launch, with military precision, a co-ordinated campaign to acquire the stock – this is referred to as accumulation. Similarly, a co-ordinated approach to selling stock is referred to as distribution.

Accumulation

To accumulate means to buy as much of the stock as possible, without significantly putting the price up against your own buying, until there are few, or no more shares available at the price level you have been buying at. This buying usually happens after a bear move has taken place in the stock market (which will be reflected by looking at the Index).

To the syndicate trader, the lower prices now look attractive. Not all of the issued stock can be accumulated straight away, since most of the stock is tied up. For example, banks retain stock to cover loans, and directors retain stock to keep control in their company. It is the floating supply that the syndicate traders are after.
Once most of the stock has been removed from the hands of other traders (ordinary private individuals), there will be little, or no stock left to sell into a mark-up in price (which would normally cause the price to drop). At this point of ‘critical mass’, the resistance to higher prices has been removed from the market. If accumulation has taken place in lots of other stocks, by many other professionals, at a similar time (because market conditions are right), we have the makings of a bull market. Once a bullish move starts, it will continue without resistance, as the supply has now been removed from the market.

Distribution

At the potential top of a bull market, many professional traders will be looking to sell stock bought at lower levels to take profits. Most of these traders will place large orders to sell, not at the current price available, but at a specified price range. Any selling has to be absorbed by the market-makers, who have to create a 'market’. Some sell orders will be filled immediately, some go, figuratively, 'onto the books‘. The market- makers in turn have to resell, which has to be accomplished without putting the price down against their own, or other traders’ selling. This process is known as distribution, and it will normally take some time for the process to complete.

In the early stages of distribution, if the selling is so great that prices are forced down, the selling will stop and the price will be supported, which gives the market-maker, and other traders, the chance to sell more stock on the next wave up. Once the professionals have sold most of their holdings, a bear market starts, because markets tend to fall without professional support.


Strong and Weak Holders

The stock market revolves around the simple principles of accumulation and distribution, which are processes that are not well known to most traders. Perhaps you can now appreciate the unique position that the market-makers, syndicate traders, and other specialist traders are in – they can see both sides of the market at the same time, which represents a significant advantage over the ordinary trader.

It is now time to refine your understanding of the stock market, by introducing the concept of ‘Strong and Weak Holders.’

Strong Holders

Strong holders are usually those traders who have not allowed themselves to be trapped into a poor trading situation. They are happy with their position, and they will not be shaken out on sudden down-moves, or sucked into the market at or near the top. Strong holders are strong because they are trading on the right side of the market. Their capital base is usually large, and they can normally read the market with a high degree of competence. Despite their proficiency, strong holders will still take losses frequently, but the losses will be minimal, because they have learnt to close out losing trades quickly. A succession of small losses is looked upon in the same way as a business expense. Strong holders may even have more losing trades than winning trades, but overall, the profitability of the winning trades will far outweigh the combined effect of the losing trades.

Weak Holders

Most traders who are new to the markets will very easily become Weak Holders. These people are usually under-capitalised and cannot readily cope with losses, especially if most of their capital is rapidly disappearing, which will undoubtedly result in emotional decision-making. Weak holders are on a learning curve and tend to execute their trades on ‘instinct’. Weak holders are those traders who have allowed themselves to be 'locked-in' as the market moves against them, and are hoping and praying that the market will soon move back to their price level. These traders are liable to be 'shaken out' on any sudden moves or bad news. Generally, weak holders will find that they are trading on the wrong side of the market, and are therefore immediately under pressure if prices turn against them.

If we combine the concepts of strong holders accumulating stock from weak holders prior to a bull move, and distributing stock to potential weak holders prior to a bear move, then in this context:

• A Bull Market occurs when there has been a substantial transfer of stock from Weak Holders to Strong Holders, generally, at a loss to Weak Holders.
• A Bear Market occurs when there has been a substantial transfer of stock from Strong Holders to Weak Holders, generally at a profit to the Strong Holders.

The following events will always occur when markets move from one major trending state to another:

The Buying Climax

Brief Definition: An imbalance of supply and demand causing a bull market to transform into a bear
market.

Explanation: If the volume is seen to be exceptionally high, accompanied by narrow spreads into new
high ground, you can be assured that this is a ‘buying climax’. It is called a buying climax because to create this phenomenon there has to be a huge demand for buying from the public, fund managers, banks and so on. It is into this buying frenzy, that syndicate traders and market-makers will dump their holdings, to such an extent that higher prices are now impossible. In the last phase of the buying climax, the market will be seen to close in the middle or high of the bar.

The Selling Climax

Brief Definition: An imbalance of supply and demand causing a bear market to transform into a bull
market.

Explanation: This is the exact opposite of a buying climax. The volume will be extremely high on down-moves, accompanied by narrow spreads, with the price entering fresh low ground. The only difference is that on the lows, just before the market begins to turn, the price will be seen to close in the middle or low of the bar.
To create this phenomenon requires a huge amount of selling, such as that witnessed following the tragic events of the terrorist attacks on the World Trade Centre in New York on September the 11th 2001.
Note that the above principles seem to go against your natural thinking (i.e. market strength actually appears on down-bars and weakness, in reality, appears on up-bars). Once you have learned to grasp this concept, you will be on your way to thinking much more like a professional trader.


Resistance and Crowd Behaviour

We have all heard of the term ‘resistance’, but what exactly is meant by this loosely used term? Well, in the context of market mechanics, resistance to any up-move is caused by somebody selling the stock as soon as a rally starts. In this case, the floating supply has not yet been removed. The act of selling into a rally is bad news for higher prices. This is why the supply (resistance) has to be removed before a stock can rally (rise in price).

Once an up-move does take place, then like sheep, all other traders will be inclined to follow. This concept is normally referred to as ‘herd instinct’ (or crowd behaviour). As human beings, we are free to act however we see fit, but when presented with danger or opportunity, most people act with surprising predictability. It is this knowledge of crowd behaviour that helps the professional syndicate traders to choose their moment to make a large profit. Make no mistake – professional traders are predatory beasts and uninformed traders represent the symbolic ‘lamb to the slaughter’.

We shall return to the concept of ‘herd instinct’ again, but for now, consider the importance of this phenomenon, and what it means to you as a trader. Unless the laws of human behaviour change, this process will always be present in the financial markets. You must always try to be aware of ‘Herd Instinct’.

There are only two main principles at work in the stock market, which will cause a market to turn. Both of these principles will arrive in varying intensities producing larger or smaller moves:

1. The ‘herd’ will panic after observing substantial falls in a market (usually on bad news) and will usually follow its instinct to sell. As a trader who is aware of crowd psychology, you must ask yourself, “Are the trading syndicates and market-makers prepared to absorb the panic selling at these price levels?” If they are, then this is a good sign that indicates market strength.

2. After substantial rises, the ‘herd’ will become annoyed at missing the up-move, and will rush in and buy, usually on good news. This includes traders who already have long positions, and want more. At this stage, you need to ask yourself, “Are the trading syndicates selling into the buying?” If so, then this is a severe sign of weakness.

Does this mean that the dice is always loaded against you when you enter the market? Are you destined always to be manipulated? Well, yes and no.

A professional trader isolates himself from the ‘herd’ and becomes a predator rather than a victim. He understands and recognises the principles that drive the markets and refuses to be misled by good or bad news, tips, advice, brokers, or well-meaning friends. When the market is being shaken-out on bad news, he is in there buying. When the ‘herd’ is buying and the news is good, he is looking to sell.

You are entering a business that has attracted some of the sharpest minds around. All you have to do is to join them. Trading with the ‘strong holders’ requires a means to determine the balance of supply and demand for an instrument, in terms of professional interest, or lack of interest, in it. If you can buy when the professionals are buying (accumulating or re-accumulating) and sell when the professionals are selling (distributing or re-distributing) and you do not try to buck the system you are following, you can be as successful as anybody else can in the market. Indeed, you stand the chance of being considerably more successful than most!

LTC has hardly budged during this move, interesting. Seems to have found a comfortable bottom.

Is somebody talking?

Actually I use your posts as a reverse indicator to make money. How's that for sentiment?

Hence the prolonged bear market and recent shakeouts. That is how Wall Street buys.

Trolls are out in force... Better cut your loose guys

http://podcast.runtogold.com/2015/01/btck-128-2015-01-24/

Starting @ 7:00, this is Tony Gallippi of BitPay... The whole podcast is worth a listen, but this part stands out:

Better wake up the sellers then.

It's already been brought down... If they continue to double digits suddenly everyone will be aware of the game. They can only accumulate for so long before the market gets wise.

It would trap them into thinking the market is going down, when in reality we're beginning to round out on lower volume (daily chart). If they panic short toward the bottom there is little to no chance to profitably close and open a long, instead they will be in the red and wish the market down on emotion, troll forums talking their book, etc. It also catches stops of longs who would take profits into any small rally. These shakeouts usually happen on lower volume toward the end of the trading range before a big move in either direction. Whales are a clever bunch and know that many retail investors (daytraders) are not well capitalized and easily spooked.

If whales are bullish and accumulating, they need to rid the market of as much floating supply as possible, since this is what would be dumped into any subsequent rally. Once a rally starts, they are highly defined by how much selling there is. No selling, the market trends higher. Whales help the process by taking big long positions. We saw this during the last big reaction from the selling climax to $166. Often it takes time for whales to accumulate so to not mark up the price against their buying, which is why we didn't blast off right away.

In each case, a strong downward move prepares the market for an equally strong upward move by removing supply from the market, and vice versa by introducing supply to the market. I would not be surprised to see a decent rally in the coming days.

Blackcoin was a pretty epic pump too.

Yeah it's interesting to watch the whales there play. There are some very skilled ones too that use professional tactics for accumulation/distribution... One more drop should pull out the rest of the retail shorts. Sad to see so many traders getting fleeced. Thanks for the coins though.

Well, you'd better stay off Wall Street, never run for political office, never work for a large company, or god forbid work in the entertainment industry. Because everyone in every one of those establishments will knock your game piece off of the board in an instant, given the chance.

You call it a cult. The whole human race is a cult then: A cult to better ourselves at the expense of others. It's called natural selection.

Sorry to say but the world today is not such a rosy place once you're out of the nest. In my view we attract so many unskilled investors because they see it as a chance to dig their way out of a shitty life position. They don't have access to traditional investment vehicles like many of us in the US and EU but (thanks to technology) they happen to have a computer and are technically literate. To them Bitcoin is a way out, a way to financial freedom to whatever degree they'd like to use it. It is an opportunity for many who are stuck under the thumb of corrupt governments siphoning off their country's resources and fruits of its citizens' labor. Obviously a change like this would not happen overnight, and not necessarily with Bitcoin. Large price swings may scare some people, but looking at the bigger picture it is a blip. And there will be more price swings, more volatility, and more resistance by centralized powers. Strap in or get off the bus.

Here's another version of the chart. See where it says "point of maximum financial risk/opportunity"? It think it is relevant.

Making up stories to fit what you think is happening with the price is easy, this is a trading pitfall IMO, just like the new "traders" on reddit who are convinced this thing will go to zero because of "mining inflation"....

1200ltc buy could have been me I'm anticipating rising prices so I've been grabbing a few.

It's not a government it's private forum and the owners can do as they please.

It's pretty bad. I'm not going to post any TA unless newbie jail is brought back. This is the most popular thread on the forum and quality posts get shit on day in and day out from these shills with nothing to contribute.