gkadir sterts the thread with:
"I found to my surprise on many ocasions that when at critical support or resistence level, despite there being more orders on the bid, the price goes down vice versa when the price is at major resistence.
Its like if there is more orders on the bid the price goes down. If there's more orders on the offer the price goes up.
I am really confused."
He gets this response from Tvardek:
"This is false. Visible bids and visible offers dont necessarily mean that the stock price will move in the anticipated direction."
then we read:
"Steve, Thanks for the correction."
Steve amplifies his understanding of his position that is contrary to gkadir by saying:
"This is a very common tactic, hell I use it quite often too. I see specs/floor traders work orders like this all the time. It takes a trained eye to know when a bid is real or when its just there to temporarily move the market in one direction to get daytraders to fill them on the opposite side. Its really a true art when done right."
Two months pass... and we hear from FS.
"....it is my understanding that Level II became semi-useless once it was released to the open public. it is now just another pump-and-dump brought to you by the wall street promotional machine (like Steve said, it can almost serve now as a contrarian indicator) if i'm wrong about this, please let me know."
March came and went then a May post arrives.
So the thread initially died because two people more or less reached a mythical agreement. The myth prevailed and two months later the myth is substantiated and a little tweak is added: ....if i'm wrong about this, please let me know.
Steve tells gkadir he is wrong and this is because of the "anticipated direction" Steve bases his "you are wrong" upon. The confirmation of the same view by FS is borne out with the comment: "it can almost serve now as a contrarian indicator"
FS you are wrong. So is your buddy Steve.
I regard gkadir as a person who is "seeking" He simply is making a comment that is his analysis of many observations that are consistent.
My response to this group of people is one made before that drew a comment: "Jack started to tell us a story but never finished it". I did finish and it was not understood. That is par for the course re: me and my comments.
Why did gkadir draw the right conclusions and say he was confused and why did Steve and FS get caught in the trap of this market myth?
They did it all for the same reason.
This myth of the markets could be named the democracy myth. Or the voter's myth.
Steve, FS and gkadir are all playing the numbers game as usual. The market is following the rules of the market game. The two activities are the opposite of each other.
If you believe the myth that people promulgate, you get to not make much money. If you obey the market's rules and ways you get to make as much money as is offered when you become effective and efficient.
gkadir is gradually moving away from the reality of what the market actually does to the places where Steve and FS are sitting being wrong as a consequence of using the mythical party line.
Why cannot gkadir go through the process of figuring out what is going on?
Why do Steve and FS embellish their misunderstandings with "stories"?
The tree for learning about the market's operations has many branches most of which head out to Myths at their ends. A person out there can fall off after a while and go climb the tree again and not get stuck sitting on the mythical branch.
Why do Steve and FS sit on the branch and talk to a person on the trunk asking questions? They "know" the myth. They are teaching it to others.
In a democracy the majority rule. We all know this and Steve and FS "anticipate" the majority ruling or from the "contrarian" view think the opposite. Both are the same view.
What if gkadir had just posed his two concerns in another way? Other than the "democracy" orientation? I mean he did come up with two concerns that covered both directions of the market and he made the correct observations of the consequences of the concerns. Man, this is thinking and being rational at its best but he actually caved when a myth was presentede to him by someone sitting way out on the branch of a tree.
A lot of people climbing the tree go to the branches and sit around the myths.
The query:
At critical support,
If there are more orders on the bids, then the market goes down.
Or at critical resistance,
If there are more orders on the offer, then the market goes up.
Trading at the limits of the range is being described. A lot of people want to buy at support it looks like. It looks like a lot of people want to sell at resistance.
This is the admonition to buy low/sell high being monitored by gkadir.
Who controls the market at Support?
Who controls the market at Resistance?
Are any of these people showing on the level 2 or DOM?
How could they be??
The lesson learned at a given height on the trunk of the learning tree that enables you to climb higher instead of going and sitting on a branch.
By reasoning through to being able to see what is going on, you often get to see how the market works.
[color=blueSo where does gkadir go to observe what he has not seen so far?[/color]
Cool. As he sees this going on, his questions that arose by looking at level II are answered and he is ready to proceed with his next challenges to become more effective and efficient.
What about all the people in the branches sitting in mythville?
That is a tough situation for most people. A person sitting on a branch is stuck as far as learning to make more money faster. That takes recognizing that thecequity curve is stuck at the same slope and the slope is less than the slope of what the market is offering.
What do people way up the tree make?
What do they know? One thing they know regarding the myth presented by other in this thread is that the myth does not work. What proves it does not work is gkadirs observations that started the thread. Those, observations are not a sufficient proof, however. The additional observations at the place where they occur are what allows for a disertation on debunking the myth.
Here come the flamers....lol.......
