straight forward question. There is absolutely nothing wrong with the market. The market is always correct. Failure signal / false signal is very common. there is no such thing as a 100% accuracy signal.
Well if its stops that are being executed, then in means that first of all, someone had a buy order waiting at that price, and the seller of the stock was willing to sell it. If price is dropping, there are still transactions happening so the buyers and sellers agree. (If nobody wanted to buy, then the seller couldn't sell and you wouldn't see price even move) What you can say is that the sellers overwhelm the buyers. If all of a sudden 100 people want to sell, but only 10 are willing to buy at $10, then we get those transactions done, but still 90 people need to trade. So where is the next set of buyers? Is it at $9.90? Maybe another 10 get sold here, and so on. Now we have to wonder, if everyone wants to sell, why is anyone buying? Well, look at all the V reversals we have in this huge bull market. It drops at the open, and by the end of the day its higher. So for some traders, getting the opportunity to buy at $9.90 all the way down to $9 is maybe a gift. The seller got scared and is happy to unload, and the buyer is happy because he thinks it will go higher and he's happy he didn't have to pay $10 a share. For price to move, one side has to be more aggressive. If the seller is more aggressive, he sells to the guy that has a bid showing. If there are not that many bids, price will need to keep dropping and finding more bids lower until all the sellers are able to get their trades done. Eventually the price gets low enough that there are lots of bids and everyone wants to buy at $9. Now what might happen is that buyers get more aggressive and they hit all the offers. So everyone who is looking to sell posts and offer, and all the buyers are desperate to get in and are willing to pay higher and higher prices. So in a way, buyers are buying the lower bid of the sellers as you say, but its not that the buyers are rapid, its the sellers that are eager to unload and hitting all the bids on the way down. The stops are simply an order that you have where you're one of the desperate sellers wanting to take any bid. You might get out at $10, or 9.90, or even lower depending on how many people want to sell in total, and how many are lined up to buy at each price level. But getting back to my original post in this thread, there are exactly the same numbers of bought and sold shares. Its just that one side is more desperate to sell at worse prices, while the other side will buy, but they will only do so at lower prices.
A friend sent this: Many people are at a loss for a response when someone says, "You don't know Jack Schitt." Now you can intellectually handle the situation. Jack is the only son of Awe Schitt and O. Schitt. Awe Schitt, the fertilizer magnate, married O. Schitt, a partner of Kneedeep &. Schitt Inc. In turn, Jack Schitt married Noe Schitt, and the deeply religious couple produced 6 children: Holie Schitt, Fulla Schitt, Giva Schitt, Bull Schitt, and the twins: Deep Schitt and Dip Schitt. Against her parents' objections, Deep Schitt married Dumb Schitt, a high school drop out. After being married 15 years, Jack and Noe Schitt divorced. Noe Schitt later married Mr. Sherlock, and because her kids were living with them she wanted to keep her previous name. She was known as Noe Schitt-Sherlock. Dip Schitt married Loda Schitt and they produced a nervous son, Chicken Schitt. Fulla Schitt and Giva Schitt were inseparable throughout childhood and subsequently married the Happens brothers in a dual ceremony. The wedding announcement in the newspaper announced the Schitt-Happens wedding. The Schitt-Happens children were Dawg, Byrd, and Hoarse. Bull Schitt, the prodigal son, left home to tour the world. He recently returned from Italy with his new bride, Piza Schitt. So now if someone says, "You don't know Jack Schitt", you can correct them. Not only do you know Jack, you know his whole family. To which I replied: "Actually, Jack Schitt is a character in Jasper Fforde's Eyre Affair and Lost in a Good Book. So I can proudly say I knew Jack before you knew Schitt."
The trader's objective is to have his money "in tune" with whatever the market is doing. The market sometimes/often does things that surprise you... even astonishes you. And it changes from whatever it was doing to something different... then changes again at another point. Trader needs to have a way of coping with all of that so that his money is in the right place as much of the time as he can muster. Personally, I use the "Price TA" approach. If that didn't work, I can't even imagine what would. (Guessing and Hoping ain't gonna get it. Luck seems to desert just when you need it most.)
This is very similar to the game of a large trader: accumulating a position, then dumping stocks, again attracting small traders, again dumping stocks. And for the third time the sale of the leftovers. Institutional players often do this.