My Options Play

[cnms2]

Quote from Multioption:

I do get your point. See, I've always maintained that certain things happen in this world with no plausible explanation; such is the rationale behind Technical Analysis.

Before Sept 11th, 2001, SP500, DOW, NASDAQ were all headed SOUTH, so I was bearish but when Osama Bin Hiding and his cohorts struck, the market took a plunge. I was fortunate to be in the market, but the question is: What drives the market; news or traders? Answer to that question is up for debate!

Some say: markets are driven by supply and demand. Now the question becomes: what drives supply and demand? There are tons of writings on this. TA is a tool to observe the inner workings of the markets, and it statistically works. Is it infallible? No. Can and should we use it? Yes.

 

[Rob on Business]

Quote from Multioption:

I do get your point. See, I've always maintained that certain things happen in this world with no plausible explanation; such is the rationale behind Technical Analysis. but the question is: What drives the market; news or traders? Answer to that question is up for debate!

I was thinking of that very thing when I was last posting. There seems to be an uncanny relationship/correlation between news and TA. What makes it so odd is that we don't assume any predictability to the onset of any quality of news over time, yet we do with TA, and we also correlate news to stock performance. Which leads us to deduce that there IS (as you alluded) some predictability to the quality of events that befall the markets - be it from God or the universe as some would have it. That's not to say WHAT the news will be, but indeed, whether we're due for some bearish or bullish news. And so, timely is the CEO's meeting... Maybe this is the catalyst for the general energy recovery.

As to the question, I think news drives traders, which in turn drive the market.

 

[Multioption]

Quote from Rob on Business:

I was thinking of that very thing when I was last posting. There seems to be an uncanny relationship/correlation between news and TA. What makes it so odd is that we don't assume any predictability to the onset of any quality of news over time, yet we do with TA, and we also correlate news to stock performance. Which leads us to deduce that there IS (as you alluded) some predictability to the quality of events that befall the markets - be it from God or the universe as some would have it. That's not to say WHAT the news will be, but indeed, whether we're due for some bearish or bullish news. And so, timely is the CEO's meeting... Maybe this is the catalyst for the general energy recovery.

As to the question, I think news drives traders, which in turn drive the market.

I quite agree that news drive the traders, which in turn drive the market.

 

[cnms2]

Quote from cnms2:

Some say: markets are driven by supply and demand. Now the question becomes: what drives supply and demand? There are tons of writings on this. TA is a tool to observe the inner workings of the markets, and it statistically works. Is it infallible? No. Can and should we use it? Yes.

For whoever's interested, this is an article about Geometric Brownian Motion: Using Excel to Understand the Math Behind the “Random Walk” of Stock Prices.

 

[cnms2]

Quote from Multioption:

I quite agree that news drive the traders, which in turn drive the market.

There is a whole theory about the noise in the markets and media is one of the noisiest sources. Correctly used multiple time frame analysis and TA filtering allow us to extract the price signal immersed in noise.

You may find interesting the article referred in the following post Forums ›› Main ›› Trading ›› Predicting randomness

 

[hajimow]

Sometimes Traders's trade generate the news that drives the market!!

 

[cnms2]

Quote from hajimow:

Sometimes Traders's trade generate the news that drives the market!!

You made a good point!

"Stocks were also climbing as traders bent on a fourth-quarter rally do everything they can to create one, said Doug Sandler, chief equity strategist at Wachovia Securities

"People just want an excuse to buy," Sandler said."
Stocks Rise on Traders' Hopes for 4Q Rally

 

[Boy Plunger]

Quote from uninvited_guest:

Your order gets filled when stock moves AGAINST you, if you are correct in stock direction your order sits UNFILLED.

We have had at least 2 situations of this already on this thread after I original posted the flaws of this sort of order (AAPL, APA).

If you don't see it why not just ask? Just say, hey pal, why do you believe that it is feasible to trade on the bid and ask and what other trades can be propelled into play if i do so?

TRy to behave yourself. People are giving you feedback on posts that aren't exactly inviting. I know you can do it. We can help.

EDIT: In trading, your plan and all of your tools go up against others. YOu are the general. Now, you want to create and destroy. Smoke and mirrors! Do you know how create long bias? short bias? shorterm? Trading includes these components so you'll need to place limit orders to buy on the bid and vice versa. I hope this general explanation clears up some of the mystery for you. YOu're probably a good fella deep down.

 

[uninvited_guest]

Quote from Rob on Business:

I think news drives traders, which in turn drive the market.

And the same news can drive the markets in different directions. If the DOW has a 100 point move up or down it will be attributed to the main headline of the day, political, economic, buisness, etc.

Sometimes the DOW will move up 100 points on "higher oil prices" sometimes it will move down 100 points on "higher oil prices". Or trade flat for the day.

 

[Rob on Business]

Quote from cnms2:



"Stocks were also climbing as traders bent on a fourth-quarter rally do everything they can to create one, said Doug Sandler, chief equity strategist at Wachovia Securities

"People just want an excuse to buy," Sandler said." [/B]

Remarkable! I never dreamed traders could rally together like that for any one end other than their own gain! Learn something new everyday...