The IRREFUTABLE LAWS of the MARKET
SIX STEPS that every trader needs to know to succeed in the markets.
Step 1: A move begins with the sponsors (smart traders) who have insider knowledge as it relates to a particular stock or market. This information will move a market up or down depending on the insiders' information. These buyers are smart, very smart, and recognize trading/investment opportunities very early in the markup cycle.
Step 2: Days, weeks, or sometimes months after a move has started, there is a brief mention in the electronic media (radio, cable, TV) or on one of the internet chat boards that a market has moved. The public hears for the first time and begins to get interested, but does not buy.
Step 3: A blurb of information appears in print media. The move also begins getting more exposure on blogs and internet message boards. The public starts paying a little more attention, and will buy a little bit.
Step 4: Wall Street and LaSalle Street brokers go into full hype mode and hawk the market to their customers. The public begins buying in greater volume.
Step 5: A full-blown front-page article appears about the particular stock or market in one of the major financial newspapers, magazines, or financial websites. This is often six months after the fact and after a market has shown its greatest appreciation. There is often heavy public buying, even a possible frenzy, as all media, brokers, and so-called "gurus" start to tout the market.
Step 6: As step 5 gets underway, the sponsors or smart traders begin to move out of the market and take their profits off the table.
The Final Step: The move ends, the market falls, and investors lose money.
Does any of this sound familiar to you? If it does then you know the key rules of engagement in the market. If none of this is familiar to you then learn to recognize these six step asap. Your financial life depends on it!!
This is how the markets have worked since the beginning. I hope this insider market tip is of help to you.
14 thoughts on “SIX INSIDER STEPS That Every Trader Needs To Know”
As a vulture capitalist, I would buy puts at step #6 and profit from the slide. Love those timely 'sell triangles'.
Just want to add that at Stage 6, I keep an eye on 'Oversold Stochastics', light volume and 'exhaustion gaps'.... In particular when I see a gap up on light volume, it's time to go!
I think we're still at early days in the gold play. We'll see. If it's going to top, you'll see a media blitz (hasn't happend yet) and a mighty one-day spike.
there are others times where you don't need a real economic reasons behind for people buying a stock on the market.
Some time ago, I read a book about "predit market with technical analysis". It was good and let me know about the inestability of the market and the influence of the short term traders (~30% daily volume). When the market is unstable, the short term traders can initiate a movement, similar to the insider but without economic reason behind. Due to the automatic trading systems and medium term traders, this movement get intensified because the The Feedback Loops and the temporal intention of trades. It can stay 3 months when down and 6 when moving up.
Most of us have studied this stuff about market movement and the
dumb money (the herd) is the last in and the smart money (experienced
traders, etc.,) are the first out at the top verifying the buy high
sell low-buy low sell high syndrome that is ancient in the market.
Unfortunately, we are in a severe repression to light depression environ and the consequent volitility with up two days down two more allow only the real, really smart ones to prosper! Most people should stay the hell out of this market!
Yes, it does sound familiar. Think real estate. When that bubble got near the top, everybody and their dog were "flipping" real estate hoping for the quick kill. But alas, it was too late by then, and now many are stuck with quickly depreciating properties they can't unload.
Those are great observations that we should all heed carefully, Adam. Laws, as you rightly put it.
Yes, it sounds like gold. However, I have personally been talking up gold to everyone I know that will listen. I can tell you that 90% of them DO NOT INTEND to buy gold at this time. So, I feel gold is a very safe bet right now. I made $6,600 profit in 3 months trading gold on Kitco.com and it is very easy right now to get in and get out and make money with it. And it's fun. They key is "getting out" when the run is over, and Kitco makes it really easy. You should try it!
I would keep a very short rein on any long gold positions right now. Bullish sentiment is about at the same extreme high levels as the March 2008 top, which usually preceeds a drop. If you look at the Elliot wave analysis, this also indicates that a significant drop is highly likely soon, possibly to as low as $600, before the next leg up. I'm looking to short it on the way down when I get a confirmation from the Trade Triangle chart on GLD.
Glad to hear you made some nice profits so far, Nathan, but keep your eye on those Trade Triagles so you don't get burned. We've got a huge advantage over the 'average' investor, if I can put in a plug for Adam and Market Club!
I agree completely Adam. Now show us how to recognize steps 2 or 3 so we can pile in and clean up.
Does the Trade Triangle Technology get us in at step #1??
XX- K -XX
Thanks for your comment.
Yes, Trade Triangles gets you in pretty close to step one.
All the best,
I totally agree with these statements. Everyone gets in when the market is about to have a new top. Jon
Sounds very familiar, Great Article.
Thanks for the article Adam!
Early buyers, Accumulation, Bull rally, Distribution/Topping and Bear run. Sounds like Gold doesn't it???
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