It would seem trading should be a tug-a-war at about every stage; even after major news comes, it would seem market efficiency should bring the stock prices to a medium price level, plus or minus a bit to give people a chance to respond/ consider a response. However, the major swings that have been occurring in the markets seem to indicate the market prices are being primarily controlled by limited parties who affect the indexes then automatically the stocks. This may also explain why such a high percentage of people lose lots of money. When the public is primarily long, their counterparty is short, and vice versa. To the extent the counterparty is the same AND has big money, means they will simply take an assessment of what their net position is, then bring the market in the opposite direction. If there are several counterparties with big money, you think they wouldn't coordinate anything between themselves? If you say they have no control over major news events--but they do have control over the level of response to those news events--and sometimes the exact opposite happens. I don't rule out the possibility two big groups will work against each other, and I don't rule out that in many/most situations each group is for itself, but when they are majorly long or majorly short, I do find what recently has happened as being quite revealing. Probably the market recovered to the level it did just when everyone dumped their long positions/ bought puts. Also, even if they are still net short, but it doesn't take away from their ability to do a temporary shakeout against the retail folks. Of course some of you will say "don't be daft" and pretend as if you know better.
So if I understand you right, the individual investors edge would be to NOT go with the herd.....being the big money is using herd psychology to its advantage?
This isn't your Professor's Stock Market. Outside of Academia, Fear and Greed rule the day. Step away from what you think you know and study Price Action, read a tape or monitor a chart (without any 'indicators' obstructing your view). You'll be amazed it what you can learn, and no, one does not need to 'manipulate' anything to profit from the markets. - Spydertrader
The last time that I saw Greenspan on the tube, he said that the market was controlled by a few individuals. The bastard that interviewed him didn't take it any further. Boy was I pissed.
Mr. Option Trader, I was at best slow to pick up on what was going on and it cost me quite a bit of money. I no longer trade stocks or options because both games are rigged (worse than roulette)...I watched a youtube video a few months back where Cramer admitted that he personally was able to control a market for about $5 million... i believe that is what he stated you are now at the same point I was a couple years ago...you need to make a decision; do you want to play in their sandbox, by their rules, and occassionally be thrown a bone OR do you want to quit and switch to a market that is harder to control? make your decision!
Da-net, I appreciate you for caring, and I mean it seriously. Thank God, I only lost about $500 (on QQQQ) when I saw the price begin to go wanky, and made more money on other plays. I already came to my conclusions earlier as well (also learned the hard way), that you only place a trade when you are 99% or 100% sure*, not 80% sure; in the latter, you are 80% sure gonna lose. (*alternatively, if you are hedging another position.) Spydertrader, I agree with what you say about the opportunities, because when they manipulate to extremes (in order to squeeze out as many retail folks as they can), they usually create excellent buying opportunities.
It's our job as traders (and I use the term loosely) to make the markets work for us. It is NOT our job as traders to blame someone else for our inability to take money out of the market or to piss and moan because the market doesn't conform to our naive idea of how things are supposed to work. The fact that so many threads here at TrailerTrader.com consist of "the Bilderburgs stole my $5k trading account" shows that most people should stick to buying lottery tickets.