100% correct BUT how does that help you make money in the financial markets--- truth is, it doesnt. Peace my brother. surf
In broad terms I quite agree that AMT explains the movement of the market. In the short timeframe, one has to accept that whales move price because they can and want to. That movement has nothing to do with fair value or even the value that the market ascribes to it. I've traded ES during European market hours and twice had stops that were close to 3 points from the market taken out by a spike that lasted all of 5 seconds. To say I was pissed off would be an understatement, and yes, I stopped trading that outside RTH.
If your post is in reference to the ES, you're correct. The short-term movements have little to do with fair value per se because of all that goes on in the ES/SPX. This is not the case with the NQ, which is why I trade that instead. However, over the longer-term, the ES is just as subject to AMT as any mean-reverting instrument, as I showed in my chart.
Very well put. I'll add that I learned a new word today: Bigotry is a state of mind where a person obstinately, irrationally, unfairly or intolerantly dislikes other people, ideas, etc.
The only truth is it does not help you. You need not jump to the erroneous conclusion that it therefore helps no one. You speak of the financial markets as though they are somehow different from any other market that has ever existed. They are not. It is as though you cannot possibly demean yourself to be bothered with something that could possibly be governed by something as archaic and prosaic and as simple as the Law of Supply and Demand, so you postulate an entire mythology of the complex mystic market to elevate your own understanding of what it is you think you do. It really does strike me as an ego thing. I wish you peace as well. I wish you also to enjoy at some point a more open mind about these matters.
This all really boils down to this: You either believe the premise conveyed in the picture below or you don't. If you do, then there is a good chance you might find DbPhoenix's materials and trading method useful to you. If you do not accept that premise, then there is little likelihood you will find DbPhoenix's method useful to you, and you should look for something else to help you. To continue this discussion is a colossal waste of time, because the discussion has been and continues to be framed around what people seems to think about DbPhoenix, rather than around the premise at the foundation of what he teaches which is the shockingly controverisial assertion that the financial markets are governed by The Basic Law of Supply and Demand.
I mentioned the ES but in reality short term apparently irrational price movement can be seen elsewhere. I've tracked CL following the EIA report and as a single example, inventory build much in excess of what was expected was followed by a steady rise in price for much of the day. I had an open option position and this was one time I said I'm not going along with this BS. Price went down sharply into the close and continued that trend into the next day. My point is that over the long term, price will reflect what the market deems to be fair. It doesn't take a straight line getting there so that is where we observe the ebbs and flows of buyers and sellers trading. We shouldn't think that AMT explains any and all price movement. Sometimes there is, for want of a better word that comes to mind, manipulation by traders large enough to move price for no other reason than they want to. It is of course interaction between buyers and sellers, but describing that as AMT at work is like describing rape as one form of relationship between a man and a woman.
Given that a trade represents an agreement between a buyer and a seller and each is free to enter into the trade or not, AMT does in fact "explain" any and all price movement. Sellers cannot move price without willing buyers. Buyers cannot move price without willing sellers. What is "fair" is what represents value to either one party or the other, perhaps both. This changes from one price print to the next.
Jeez DB, let's not get pedantic here. I thought my rape analogy addressed your point. A run on stops hardly reflects willing buyer willing seller. Some do say that rape happens because women invite it, I don't accept that. You don't need to feel any obligation to defend AMT, it is perfectly logical. It just does not explain every movement of price in the market in the context of seeking a generally accepted value. Some price movements have nothing to do with finding accepted value. Perhaps you don't see that in NQ, but I track instruments in FX, futures and stocks and I see that all the time.