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Jan Willem
Very fine job!
In a concise mail you have clearly summarized many very useful insights
I will treasurize. Thanks very much.
Now a new question about Efficient Markets.
IMHO:
a) the major part of a Company's shares (let's say e.g. 60% at least)
are owned by those who control it; they usually don't put them on the
market because take profits from the incomes of the Company;
b) the other part is freely exchanged within the market participants,
among which are big Firms, Funds and traders. The formers are the
'strong hands', meaning they have a lot of buying power: they place
trades to join their own profit goals, determine the major movements in
market prices;
c) individual traders/investors (many of us) usually have at their
disposal computers, real time data feeders etc., but have very low
buying power in respect of the 'strong hands' and their actions aren't
cohordinated and synergic, so are able to produce just very low price
movements, in respect to those produced by the 'strong hands': just the
'noise' we can see in the price charts.
So, IMHO, the strong hands determine the trend of the market and if a
trader wants to profit he has to understand what the s.h. are doing and
follow them: this is the sense of the old adage "Trend is your friend".
Are those points of wiew in the right direction?
TIA for your opinions and nice trading
Tommaso Galanti
Italy
J.W.E. Roberts wrote:
>
> Hi Tommaso,
> Welcome to the Forum! Re. your questions:
> .... <snip><snip> .....
> 3. We operate in so called "Efficient Markets"; which I rather call
> "Information Saturated Markets". In practice this means that soon after
> somebody has developed a really good trading system, everybody starts using
> it, which in turn means that it will not work anymore. As a point in case
> you could have a look at the time honoured 200-day MA: The number of bear- &
> bull-traps in conjunction with it has grown enormously since people use PC's
> to analyse equities. To put it differently: In the market-place, when you
> start behaving along established lines there's sure to be some guy who'll
> skin you alive.
>.... <snip><snip> .....
> Hope this helps & that I've not turned too fatherly (patronizing). Happy
> Trading,
> Jan Willem Roberts
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