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by Ashraf Laidi
Posted: Feb 22, 2010 5:00
Comments: 8936
Posted: Feb 22, 2010 5:00
Comments: 8936
Forum Topic:
Gold, Oil & Indices (Equity & Bond Indices)
Discuss Gold, Oil & Indices (Equity & Bond Indices)
money to make with a 400:1 leverage, no i don't buy that
simplicity that stock markets only function with "noise traders"
that is traders who gather information from ..you guess it- chart astrology. While the profs have all the information and act accordingly all they have to do is to confirm noise traders their analysis is correct to eventually get the price they need for profit. So its not a proverbial rumor it is plain and simple maths.To built their traps profs disguise as speculators at the futures markets , generate gaps , and let the herd follow , at little extra cost, but mostly with extra profit.
If the market has only informed traders - such as insiders - no one would buy an overpriced asset and no one would sell an underpriced asset. So it needs a herd of chartastrologers to provide the liquidity that the handful of informed traders scoop up. And there is no way out of that.
This does not hold in forex markets as even the bigger players are dwarfed by the biggest, the central banks.
it works.