Data443 Risk Mitigation Inc (ATDS)

[stockvaper]

"Why does LDSR's price go down after good news:?
By Stockvapor

Shockingly, that's good news. Here's why:

Welcome to the OTC world. I'll try to explain this question. It has nothing to do with LDSR at all....here's why.

Below is the LDSR chart from 1/2/2019 after close. I set the PPS trades at 1 minute intervals. Notice the 3 red bars in the last 7 minutes of trading? Those (red bars) is the PPS dropping; where market makers (MMs) are forcing the PPS down after the LDSR news came out. This is usually done by “shaking the tree”. First they will take out any stop losses. Then, if they need to take it down more, they'll start artificially lowering the bid so the ask has to come down to meet it. How does the ask come down so fast? “Selling at market”. When you "sell at market", you're literally telling the stock broker to sell all of my order at whatever the current bid is. See what's coming? If the MMs lowered the bid to pick up shares, ALL of the “sell at market” stocks are toast. Thus a low ball sale to the MMs. Those are the red bars. (I'll explain below, later, why MMs do this).



Now, understand, any one OTC stocks usually has only 2 - 3 MMs that have the exclusive right to make a market for them. In return for the responsibility of assuming the task of making a market for a OTC stock, the MM is (like I said earlier, granted exclusion) and they are allowed to make their money the same way that traders do. Except it's easier for MMs because they have the technology and SEC license to see much more and do much more. They can see ALL bids and asks placed from any source for any length of time; (even days or weeks). Thus they can calculate (literally mathematically and problematically) what will happen in the coming minutes to hours. (These “calculated views” are very close to what's actually coming. Some bids/asks can always be canceled or changed, but usually that doesn't change the big picture).

So, here's an explanation that will make it easier to digest. (Before we get to “why”).

Scenario:



A recon Sargent (spotter) is stationed on a hill looking for the enemy approaching in the next valley. (One military unit in valley A cannot see the enemy military unit in valley B). So the Sargent is placed on the hill to peer down at valley B. He sees 3 enemy military units coming his way, and his unit (one unit) is ordered to defend valley A. (All units in this scenario are equal in equipment, technology, training, etc. for this purpose). So, the Captain of the valley A unit understands immediately, if he doesn't want heavy losses, he must contact command headquarters and request immediate reinforcements.

So, what just happened is, by seeing the "big picture", what's out in front of you that no one else can see, you know how to respond to avoid heavy losses by getting more units.

Well, MMs are the Sargent on the hill. They see what's coming and realize, if the PPS “ask” is going up significantly in the "next valley just ahead", if they don't want heavy losses, they need more reinforcement units (shares) right away. So they drive the PPS down, (as explained above), and pick up the low priced shares for as long as they need to have enough reinforcements (shares) to back them up and avoid any losses. When they have what they need, they let the stock go back up and up...when it's getting near it's peak, (big picture again), the MMs sell the low priced stocks they pirated earlier. That's just how they make their living. It has absolutely nothing to do with the stock (company). They do the same tactics for ALL OTC stocks.
This is also SEC compliant (within certain rules) for MM's to do this. This is how they keep a “somewhat stable stock price”; this is how they make their living. It's not being mean to LDSR or stock traders.

So, now, when you see the red bars increase significantly like the chart I presented here, that's the MM's calling for stock reinforcements.

Lessons learned:

When LDSR stock goes down after a good news announcement, I would consider that excellent news in itself, in addition to the PR. (The big picture says the future asks are heading up.

Never use “stop losses” or “sell at market” (especially when trading in the OTC).

When the PPS of a stock, for any reason, just “suddenly drops drastically”, that's almost always the MM's “stock fishing”. (To confirm, look at an LDSR chart showing PPS trade history for one day in 1 minute intervals...as the LDSR chart from yesterday shows....if there are significant red bars, its almost always caused by the MMs raiding stocks. Which I, and some others, refer to as “Bear Raids”. There are times the stock going down drastically is for another reason; e.g. extremely bad news released by a company, but if that were the case, you'd probably know about it before you checked the stock price. Also, rarely there will be actually high rollers shorting the stock to buy it los and sell it high; simply emulating what MMs do.

A company's stock price suddenly going down anytime (with or without good news) in the OTC market is usually MM initiated. The company has nothing to do with it. Sorry to say, but rarely do the MMs even know what the company is or what they do.