Who's buying the low and selling the high?

Quote from tomahawk:
We all know big money drives (and turns) markets. And there's almost always an OBVIOUS reason (in real time) for why this level became S or R (not necessarily for why it was THE FINAL S or R in the timeframe considered).

So I'm just trying to understand the whole smart money/ dumb money mix that goes on at highs and lows.
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Smart money is only ever referred to on ET by people who have never known smart money. And in general you see many on ET, mostly with no real connections, claiming to know the 'why' of this and the 'why' that. Others on ET keep concerning themselves with wanting to know the 'why' of this and the 'why' of that.

Heres when you start to learn: it IS. Thats right, it is. And then after that its the 'how' that matters. Look at a live chart, any day, any market. Its all in front of you. It is. The 'whys' may always be interesting but it is the 'how' of which you must become master. You have to master the 'how' of making money from markets.

The 'how' is your methodology or system. Take the market and learn it as it is. Forget all the myths, alleged conspiracies, fantasies and other garbage of 'why' a market is what it is. Study and know the 'is'. The 'is' is full of repeat patterns. For the amateur your energies and focus must be on harnessing the daily 'is' of any market.
:)
 
Quote from Cheese:

Smart money is only ever referred to on ET by people who have never known smart money. And in general you see many on ET, mostly with no real connections, claiming to know the 'why' of this and the 'why' that. Others on ET keep concerning themselves with wanting to know the 'why' of this and the 'why' of that.

Heres when you start to learn: it IS. Thats right, it is. And then after that its the 'how' that matters. Look at a live chart, any day, any market. Its all in front of you. It is. The 'whys' may always be interesting but it is the 'how' of which you must become master. You have to master the 'how' of making money from markets.

The 'how' is your methodology or system. Take the market and learn it as it is. Forget all the myths, alleged conspiracies, fantasies and other garbage of 'why' a market is what it is. Study and know the 'is'. The 'is' is full of repeat patterns. For the amateur your energies and focus must be on harnessing the daily 'is' of any market.
:)
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:D :D :D
 
Ok,2 tf you need,just two tf are all you need.

the1st one for mr.Don or the like;
the2nd one(without any indicies) is for the beast like this one:
 

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Traders should be discussing what are the probabilities of success when buying lows and selling highs.

How do you beat the market by buying lows and selling highs.What method is required?

It is possible, only if you know how.

ONLY THE SMART MONEY ON E T , THAT I KNOW DOES IT.
 
You need to understand how big players trade to understand who is selling the high and low. Hedge funds that trade positions in the hundreds and even thousands of contracts, will tend use models to decide if price is above value, below value or close to value. If a market moves away from value to the point where the risk/reward ratio of a winning trade is acceptable, the fund will begin building a long or short position. They will build that position by continuing to add contracts as price moves further from value and based on the sheer size of their position will manage to sell a small percentage of their total position at the top or bottom of the market. However their average price may be 15 points above the bottom or 20 points below the top, depending on the volatility in the market on that day.
 
Quote from tomahawk:

But is it just a lucky idiot piker, or some lucky commercial or local? And if it is one of these professionals and picking tops/bottoms is so wrong, how do they get away with or justify bucking conventional trading wisdom to play these bottoms and tops? You'd have to assume they've done it before and perhaps even as a general practice, and have lived to trade on.
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The highs are made by money that pays the offer, at the market, with the purpose of pushing it higher (smart money with long inventory) or because they are getting stopped out on a panic (dumbasses). The guy first on the queue with a limit order after this pushup is exhausted ends up selling at the high.

Similar mechanism for the low.

So the exact highs are set by buyers, not sellers, and the exact lows are set by sellers, not buyers. Whoever is first on the queue at that moment (lucky bastard, dumb or smart, very few contracts to matter) ends selling the high or buying the low.

Sometimes you see a big market order move the price several ticks in a few seconds at those points. That is big money picking a top or a bottom, and knowing that they can't get the exact high or low for any size, they just buy or sell, AT THE MARKET.

It can be seen all after the fact, unless you are a big trader and you can predict when you are going to sell or buy big yourself, and if no other big traders are present then you are actually creating the extreme. It can all backfire with just one bigger trader than you doing the opposite...

It is all really simple.
 
Quote from Runningbear:

You need to understand how big players trade to understand who is selling the high and low. Hedge funds that trade positions in the hundreds and even thousands of contracts, will tend use models to decide if price is above value, below value or close to value. If a market moves away from value to the point where the risk/reward ratio of a winning trade is acceptable, the fund will begin building a long or short position. They will build that position by continuing to add contracts as price moves further from value and based on the sheer size of their position will manage to sell a small percentage of their total position at the top or bottom of the market. However their average price may be 15 points above the bottom or 20 points below the top, depending on the volatility in the market on that day.
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Thank you. That is exactly what I was looking for in terms of an explanation. I had an idea it might have to do with value models and large scaled-in positions, as referenced in my original post.
 
Quote from eudaemon:

Check the volume done at the exact high and low. Almost always it is a very low number compared to the daily volume transacted. So by definition: a lucky bastard.
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The EXACT high and low always has the ax on one side. That's where "he" puts the brakes on (at least temporarily). Exhausted or replenished inventory.


With 500+ posts since January, I consider myself a lucky bastard.
 
Quote from eudaemon:

The highs are made by money that pays the offer, at the market, with the purpose of pushing it higher (smart money with long inventory) or because they are getting stopped out on a panic (dumbasses). The guy first on the queue with a limit order after this pushup is exhausted ends up selling at the high.

Similar mechanism for the low.

So the exact highs are set by buyers, not sellers, and the exact lows are set by sellers, not buyers. Whoever is first on the queue at that moment (lucky bastard, dumb or smart, very few contracts to matter) ends selling the high or buying the low.

Sometimes you see a big market order move the price several ticks in a few seconds at those points. That is big money picking a top or a bottom, and knowing that they can't get the exact high or low for any size, they just buy or sell, AT THE MARKET.

It can be seen all after the fact, unless you are a big trader and you can predict when you are going to sell or buy big yourself, and if no other big traders are present then you are actually creating the extreme. It can all backfire with just one bigger trader than you doing the opposite...

It is all really simple.
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But what is the ''value'':confused:
 
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