Why Is The Obvious Not So Obvious?

Vindago · Jul 23, 2015

The Obvious said:
I am currently thinking about how to exploit the Obvious, and that's not so obvious.

What I do recognise, though, is it's no use whatsoever me trading ever again unless I can figure this out.

PS. I gained quite a lot of insight reading these hard-luck stories about trading
http://www.psychforums.com/gambling-addiction/topic108461.html

Yep, that's where the extra work is required...

Vindago · Jul 23, 2015

i960 said:
You'll end up in that trap regardless. In fact, the "flow" can be a trap in itself.

True, the risk is there, but if you "help" the Generals by doing the opposite of what they are doing (with a grain of salt, of course) you are not competing with them, which is what you never want to do, unless you work on larger TFs (swing).

The Obvious · Jul 23, 2015

Vindago said:
True, the risk is there, but if you "help" the Generals by doing the opposite of what they are doing (with a grain of salt, of course) you are not competing with them, which is what you never want to do, unless you work on larger TFs (swing).

I presume you meant "are competing"?

If you read the hard-luck stories link I posted earlier, it's clear that's exactly what many of these people were doing. Trying to buck the trend, not realising who they were competing against.

Vindago · Jul 23, 2015

TO, no I mean exactly that, I do not want to compete with the Generals, so I am going to accommodate them and do the opposite of what 90% of the traders will do (at the end the Generals need to make money and to do so they have to trick the traders to go in the wrong direction).

Remember one pass of one of the OPs poems: "the Zip is down, here comes the crown"... make perfect sense, doesn't it?

The Obvious · Jul 23, 2015

Vindago said:
TO, no I mean exactly that, I do not want to compete with the Generals, so I am going to accommodate them and do the opposite of what 90% of the traders will do (at the end the Generals need to make money and to do so they have to trick the traders to go in the wrong direction).

I was sure that's what you meant. It's just that, to me at least, your post didn't read like that.

Incidentally, do you know who (or what) the Generals are?

Vindago · Jul 23, 2015

TO, for what I understand the Generals are the big financial institutions and the MM...

i960 · Jul 23, 2015

Vindago said:
TO, for what I understand the Generals are the big financial institutions and the MM...

To be fair, they were called "heavy footers":

Market Intelligence-The Key To Profits

jop · Jul 24, 2015

Obvious Question:

Do you want a lot of General ownership of a stock or not?

The Obvious · Jul 24, 2015

Vindago said:
TO, for what I understand the Generals are the big financial institutions and the MM...

I may be wrong but I wouldn't have thought MMs had much effect on price. They make their money in the bid-ask spread, so I would have thought they'd be broadly neutral.

I was watching a top FTSE-100 stock a couple of weeks ago, with a market cap of £21Bn, and it jumped 10% in a couple of days. It got me thinking, who made that happen? It must take some serious money to move a stock like that by 10%.

Vindago · Jul 24, 2015

The Obvious said:
I may be wrong but I wouldn't have thought MMs had much effect on price. They make their money in the bid-ask spread, so I would have thought they'd be broadly neutral.

I was watching a top FTSE-100 stock a couple of weeks ago, with a market cap of £21Bn, and it jumped 10% in a couple of days. It got me thinking, who made that happen? It must take some serious money to move a stock like that by 10%.

TO, you checked if the company reported the earnings? big moves like that are usually due to earning of some significant change in the Company (acquisition, approved drug for pharmaceutical etc.). Big money would not do that on their own even if they could (and probably they could do it)