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.

Adam Hewison
Co-creator, MarketClub

17 thoughts on “The irrefutable laws of the market

  1. Adam,

    I have viewed you videos for some time and have always found them to be informative. It is good to get informed views and opinions from others. This is another piece that keeps educating investors like me.

    Recently I have been keeping a watch on the moving averages (20, 50 & 100) on markets in Asia, Europe and US. It would appear as if the 20 has breached the 50 on many markets and is closing in on the 100 on many also (on the way down). The last time this occurred was at the start of the big down and the reverse on the way up. My studies reveal that it takes a substantial amount of energy for this to occur. What do you make of this and is this part of the process for your triangle technology?

  2. This also works in reverse for a Bear Market.

    We have had 4-Weekly Red Candles for the $SPX since December.
    I started watching closely in Week-2 with the Weekly Red Flag.
    I put in a few shorts at the end of Week-3 Red Candle with
    appropriate stops.

    When (and if) last weeks low (1,044.31) on the $SPX is taken out,
    I will put in some more shorts with appropriate stops.

    When (and if) Nov.09's low (1029.38) on the $SPX is taken out,
    (this will mark a lower low on the weekly chart cycle)
    I will put in the rest of my shorts with appropriate stops.

    My thesis is that Greece, Portugal, Spain, Ireland and Iceland
    will put upward pressure on the US dollar, and the $SPX hates
    a strong US dollar right now.

    My downward target is a test of the Jun/July 2009 highs.

    My conclusion is the risk of shorts is low and the potential
    gain is high.

    I really appreciate the education I have received from Adam
    and the Market Club Library since joining in December.

    Now, I will do well in either a Bear or Bull market, and will never
    again have to endure those 25-40% losses because a ''financial
    adviser'' let my funds go down the tubes during a big market correction.

    Happy Trading.

  3. Chiman,

    Thank you for your feedback.

    The concept behind the trade triangles is in fact that they track insider trading in the sense that the insiders are always first but they leave footprints in the marketplace. Our trade triangle technology has been designed to spot these footprints and take advantage of the insiders knowledge.

    All the best in your trading.

    1. Hi Adam,

      Can you provide a little more details of how trade triangles are able to spot these footprints?



      1. Mazin,

        Thank you for your feedback.

        The trade triangles are the algorithm that we developed here based on the work that I did many years ago on the Chicago Mercantile Exchange where I was a member of the International Monetary Market (IMM).

        More than that it's hard to describe. I can say that it does catch the big moves and helps filter out some but not all of the bad trades.

        All the best,

  4. That is the law of the jungle. Should the value investors who see a bargain be blamed after all no one asked them at what level they would sell. Or is it the journalists who create the final buying frenzy? Or is it the nespapaer editors who are so desperate for copy that they will print anything if it is handed to them? Or is it the greed of the small investor anxious to make some money so he can get heart surgey for one of his kids, or even be able to afford a reasonable holiday?
    Wholly Molly folks lets not get into the blame game. It is only a game we all hope to win
    May the markets be with you.

    1. Barry,

      The reason that I made this post is to point out that this is how markets really work and that markets get hyped on the upside. Just look back at what happened to the gold market recently. Also look at what's happening to the equity markets to the hyped up on good news.

      I do agree with you that the only game in town and you must play to win.

      All the best,

        1. Maria,

          Thank you for your feedback. Forex trading is the biggest market in the world and as such is much more difficult to manipulate. However the irrefutable laws of the market place do apply to this market just a little so.

          I hope this answers your question.

          All the best,

  5. Adam,does this mean we outsiders can never win in the market? even the trade triangles are not based on insider information!

  6. So are you saying that only those who have insider knowledge about the market or a stock are the only ones who make any real money in a move?

    1. Hal,

      Not at all.

      By following a game plan and our trade triangles technology I expect you will do very well.

      All the best,


  7. Adam, that was a superb and concise synopsis of the markets!
    I would file it under 'must reading for any investor'.
    The best thing I've read all day.

  8. May I add that after the smart traders have taken their money off the table then they take short positions?

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