Market Discussions

After 2 days of work I have finally finished writing down an heavily illustrated resource that I believe would be very interesting for those who love to study the markets.

There you'll see various things, from exchanges features to spread, from supply and demand to a description of what candle bars are, what EvE in game chart bars are and their basic properties and much more.

There's even a section about "coin toss trading", recently "debated" in a now locked thread, including an example.

I hope you'll like it.


Linkage.

Nice read!

On page 3 picture ferrofluid orders there is a minor mistake, i think it should say highest buy order, not highest sell order at the arrow pointing to the highest buyorder

Damn you VV, now my boss will complain even more about how unproductive I am

Thank you for your feedback, I have corrected the typo. Happens when you finish writing at 4am (I live in GMT +1).




The fear and greed chart is exactly the typical dynamic of price. All those "hills" I have drawn happen for real, these are the head and shoulders, the double bottoms and so on. That's why it's important to learn and see them, they tell you the context of the market and so you can understand whether you are going to buy at a best price, at a good price or right before a massive crash.

Now look at the EvE chart in the post, the one with the zoomed in bars.
The zoomed portion is a double top, a simple glance to that pin bar I zoomed and described all to the right would tell it was the time to dump your stock before the crash.
Furthermore, a two seconds glance to that double top would immediately tell you where price aimed to go.
There is no sh!t, price WILL, I underline WILL do its best to go to its target. Some times it will fail, mostly when the patterns happen against the trend (hence the old motto: "the trend is your friend") or when there is a massive support / resistance level blocking them.
Otherwise, the market at medium term is an open book. Brownian motion my ass.


About the coin toss: your observation is almost right, it misses a big factor that sadly I just *cannot* figure out how to explain in English so I did not write it.

Basically, the market acts like a collective, intelligent being, it reacts and counters mechanic approaches by using very smart profit dodging strategies against the individual market participants.
Despite everything is driven by orders, those orders are statistically subdued to a sort of natural selection. This is why the best of breed orders tend to cluster around certain important levels and this is why the market *uncannily* WILL do its best to take your order and drive it to stop loss. It's not a "brain" but the orders that collectively form a best-fit structure (I know I am probably saying some enormous crap in English, words just don't come to me. If you listen to my trading video (you are susbscribed to my Twitter channel where I post those, right? ) you'll hear how BAD I know English). The best-fit structure packs orders so that they best fill the "empty price space", like bees create hexagonal cells to best use the available volume. This best fit also causes *coincidences* like "fibonacci numbers" (they happen to allow optimal fits) and also to almost always have an order placed right next to yours, that will take you down in the opposite direction.

The above blurb makes sure that despite your coin toss indeed creates a 50% buy or sell "signal", the broker fee plus the adverse statistical orders distribution will make sure your order will be taken, then you will see price performing incredible zig zags (that also happen to best fit the available price space, it's called "price discovery") to literally shake you off. This kills a lot of uninformed traders orders. In their point of view the market will appear like a sentient, evil being purposedly taking them out with a nightmarish efficiency.
It is not so, but the whole mechanic is awesome, amazing to witness in first person, and also scary as hell.

(@Trolls: notice the bolded and underlined bit).

Posting so i'll remember to read tomorrow.

I clicked some of those adsense links, since it seem the best way to actually appreciate the knowledge shared :-)

..Thank you VV for taking your time and knowledge and sharing it. A lot of that stuff is over my head, but very interesting read none the less.

Could you make a more in depth post on the fear and greed aspects?

..Don't really get your post. But have a nice day!

Thank you,

Yes big round numbers are easy to spot and to use and actually the top two profitable RL traders I know exclusively buy and sell at those numbers. Not all the BRNs are equally strong but they are all a good starting point.

Thank you!

I have a whole website section still unpublished and exclusively about EvE and heavily focused on EvE trading. I hope I'll be able to complete it in a decent time frame.