The 7 Steps Of Every Market - Ignore Them At Your Own Peril

The SEVEN STEPS that every trader needs to know to succeed in trading.

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 seven steps 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
President, INO.com
Co-creator, MarketClub

22 thoughts on “The 7 Steps Of Every Market - Ignore Them At Your Own Peril

  1. If you think gold is done with big moves, I think you're in for a surprise, unless you are talking very near-term. I expect more big moves (up) in gold before December.

  2. Thank you for exposing the steps of marketing a stock or other market. It is clear that the average individual is usually unable to enter a market at stage 1. It is also clear that the next best entry points are at stage 2 or 3. From a practical point, how can the MC triangles be used to do just that? Looking forward to your nstructions. Thank you.

    Jean Rene

    1. Jean Rene,

      Monthly Triangles determine trend and possible entry points.
      Weekly Triangles determine timing: exits, entries and re-entries.

      The last triangle issued on the monthly chart should always be used to identify the overall trend. You can also use the monthly triangle as a potential entry point if you can get into the market within the last 3 trading days of the signal. Then you are to look at the weekly triangles for possible exit and re-entry points, or entry points if your monthly is in a steady trend.

      Key Rule: always trade with the trend. Make sure your weekly and monthly triangles correspond in direction.

      *If you are a shorter term trader, it is possible to use the weekly triangles to determine overall trend and possible entry points and the daily chart to determine individual timing points. Please be aware of the short term whipsaws, and lack of overall trend strength.

      As a intermediate-term trader you want to pay particular attention to the fourth Triangle. This is the fourth Triangle from the top that will generate positive or negative intermediate-term signals for you. If the forth Triangle is GREEN, you should then confirm the signals viability status with the color of the fifth Triangle. If both Triangles are GREEN, then a positive movement is likely. However, if the Weekly and the Monthly Triangles are RED, then a negative movement is likely. If the Triangles differ in color then you should consider keeping a sidelines position.

      How It Works

      The direction of the forth Triangle is marketed whenever a market moves over the previous three week high and remains above the previous three week low. The reverse is true when the low of the previous three weeks is broken to the downside, it creates a RED Triangle . This is an automatic stop-out of a long position if the fifth Triangle is GREEN. If the fifth Triangle is RED, it signals that a short sale is in order. If you are not familiar with short positions please consult your broker, or learn more from the experts in our INO TV online seminar service.

      5 Successful Intermediate-term Trading Rules

      (1) The odds are in your favor when you trade with the major trends.
      (2) Always trade using stops. Never Cancel A Stop.
      (3) Plan your trade and trade your plan.
      (4) Never assume a market is too high or too low.
      (5) Go with the flow. Don’t over think your position.

      Best,
      Jeremy

  3. A great synopsis on why the retail, little guy, mom & pop investors should stay the hell out of the stock market. A bus ticket to Atlantic City or Vegas is a better investment (at least there is some entertainment value there).
    *J*
    ~~

  4. I bought back in to AGQ while the rating of it was at 55% for the previous one or two days on MC. Why? Because it seems obvious that there are no REAL remedies in place to help buoy the markets through improved economic fundamentals. There is only "news" available stating that Bernanke may this-or-that at Jackson Hole, Buffet buys into BAC ( my own research indicates BAC is is on a slippery slope now), gold "bubble" ending, improved GDP outlook ( I call B.S.!). Silver is in the unique category of being money AND a necessary commodity in technology. If I had waited for the MC triangle, I would be a little later to the party. Today, AGQ went to 85% on MC. I recognize the safety factor in MC's signals and appreciate this. But for those who really scratch and dig for information, there is also the ability to forsee the trend a little ahead of MC signals without getting into trouble. I am being very diligent in leaving emotion/greed as much out of my trades as I can. One of the best things Adam has said is to "Forget What You Think". BUT, if you have been very careful in your research, you can get a little ahead and still be in harmony with the MC signals I think. But you had better be thorough.
    I think that if we can resist the runaway thoughts and emotions regarding trade potentials AND allocate capital wisely, we will be here to profit day-after-day.
    Just my opinion - I am a VERY green trader still.

  5. "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."

    Hello Adam and all,
    In your algorithm(s), what sort of weighting would you say is in this type of information which very few could possibly be aware of? I would think that the more weighting this information has in MC trending signals, the greater the possibility of 'beating the market'.
    I understand that insider information must not be easily available because it IS "insider information" after all. And, I would almost expect that Adam is one of these "smart traders" mentioned. No?

    Best regards and wishes,
    Bob

  6. This is of course true and great information. But of what use is it when you are not on the inside? Really useless...

  7. The big boyz knew about the margin reduction in gold, hence the big downdraft.
    I don't think we small traders can get the tops or bottoms, just the middle 70%.

  8. Yes, manipulation is fun when your the leader.
    Just look at Buffet this morning.
    BOA is dead, but he'll bank a 20% profit guaranteed and a 6% dividend before they fold next summer.
    How nice!

  9. These steps are right on the button. How many times I've been stuck holding the bag on some gold mining exploration juniors...
    Lesson learned.
    These trade triangles are the key to my success.
    Keep up the good work Adams.

  10. Friends,

    This is realy Excelent observation about Stocks, but by and large, with some minor case to case changes, it is also applyes to all other Financial Markets like Commodities, Currencies or Bullion........ Field may be different......it may be in US, or India or China, country may be different, but Modus Operandi is same at Global level, off course, The Ultimate loosers are also same and that is COMMON INVESTORS OR RETAIL PARTICIPENTS

    Rasesh Shukla
    India

  11. Adam,

    Yep, here we are with two of the biggest double tops in history and the market has rallied back to roughly the 70% level (May 2) and now it is rolling over big time and the folks that got burned in 2000 and 2007 are again getting burned since May 2.

    Personally, I'll be even more bearish and point out that this is pretty close to what happened in 1930 when the market rallied back about 70% from the first crash in 1929. Then it rolled over and the serious blood letting occurred. If I remember right, it did not bottom until about 4 months after the passage of the Glass-Steagall Act in 1934 when the market had fallen to about 10% of it's value just before the Crash of 1929....

    For those not aware, the Glass-Steagall Act was removed in 1999 and the market has not traded much higher since then......

    I believe the phrase is "Buyer Beware", aye?

    Mike

  12. The final step sounds like when CNBC says buy buy buy, I knew a gold correction was coming when it went up a couple hundred bucks in a weeks worth of trading sessions and CNBC was along with jpm GOLD to 2500 bucks!!!! Gold probably will reach 2500 some day but those that bought in the last few weeks are getting heads chopped off right now and will sell it and never go back(thats what i would do) once you get creamed it's hard to go back into

  13. I. Have learned this through my own mistakes in the beginning....I appreciate immensely, receiving your input and knowledge...thank you

  14. Perfect Adam,

    We have seen this over and over again, through the years,

    and the only way to avoid losing money, is been a smart trader (remembering that many times we don´t know about somethings happening in our own company) ... OR CHART ANALYSIS ,,,

    trade triagles can help very much, avoiding chopping markets ,,, and showing the end of the big moves ,,, as it does the day before yesterday in gold.

    have good trade day,

    Mauro.

  15. Smart and highly risk taker will probably position short in step 5 and 6. It is a perfect perfect storm for shorting.

    Cheers to you guys.

  16. Adam, what you say is so obvious when you can look back. How can market club help a trader recognize opportunites early in the cycle?

  17. Adam,

    I'm assuming this works on shorts as well. Is it possible this is what is happening with BAC on the short side? It seems to be on the news almost as much as Gold lately.

    JayG
    Honolulu, HI

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