Maybe it's an obvious question but I think I will give some of my thought about it.
Every participants in the market has one purpose only when trading : TO MAKE MONEY!!
Whether it's retail trader, fund manager, BlackBox Trader, Algo Trader, HFT, etc. Only one single purpose: TO MAKE MONEY!!
It's like a soccer game. The main objective is to win the game. So, if their gate is in danger, every defenders will do the obvious things. Defending the gate. It may be a tackle, block the shoot, or blocking the player. It's natural thing to do and it has a pattern.
This purpose alone also can give you a pattern in a chart. The "TO MAKE MONEY" objectives will give some scenario like : where to entry, exit, profit taking, stop loss. Think about it. If a trader has a loser trading setup, he won't use it as it didn't make him money. However if he has a winning setup he will use it over and over again until it won't work anymore. Use it over and over again from million of participants out there may create a pattern that repeat over and over again. A novice who trade recklessly may become washed out in the long run or he has to join the community of over and over again sucessful traders to become a sucessful trader. Unfortunately only few traders can join the elite group trader.
This is my opinion why market has patterns. Because one purpose : TO MAKE MONEY...
For those of you who doubting the market has a random action, it's not. Everyone in the market has only one purpose. Like soccer players in the field has one purpose to score.
Well said; if we can recognize what the big players would do given a certain pattern, we can make a lot of money. :) But again, like you said, only few traders can join the elite group trader. We can keep trying and may be someday, sooner or later...
ReplyDeleteYes, the sooner the better :) tks for coming FFXD.
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