Principle One
Don't Trust The News
The herd will panic after substantial falls and start to sell usually on bad news. Then ask yourself.
Are the trading syndicates and market makers prepared to absorb the panic selling at these price levels? (must be on a down bar).
If they are, then this is a strong sign of strength.
Principle Two
The herd will at some time after substantial rises as seen in a bull market become annoyed at missing out on the up-move (FOMO - Fear Of Missing Out) and will rush in and buy, usually on 'good news'. This includes traders that already have long positions, and want more. Then ask yourself.
Are the trading syndicates and market makers selling into this buying? (must be a up-bar). If so, then this is a strong sign of weakness.
Does this mean that the dice are always loaded against you when you enter the market?
Are you destined always to be manipulated?
Well, yes and no.
A Predator Trader Rather Than a Victim
A professional trader isolates himself from the herd and has trained himself to become a predator rather than a victim. He understands and recognizes principles that drive the markets and refuses to be misled by good or bad news, tips, advice, broker advice and well meaning friends. When the market is being shaken-out on bad news, the professional trader will be buying. When the Herd is buying and the news is good he is looking to sell.
You are entering a business that has attracted some of the sharpest minds around. All you have to do is to join them. Trading with the strong holders requires a means to determine the balance of supply and demand for an instrument in terms of professional interest, or lack of interest, in it. If you can buy when the professionals are buying [accumulating or re-accumulating] and sell when the professionals are selling [distributing or re-distributing] and you don't try to buck the system you are following, you can be as successful as anybody else in the market.
Singapore
Chart
Pattern
Analysis