Price drop 12%-14%
I wanted to share some thoughts and strategies.
The price has dropped today between 12% to 14% - I managed to squeeze a top up at 0.0896.
The key to remember is this : posts often focus on shorts, but the most important people are the market makers. Market makers only make money on SELLs and BUYs. On the margin between the two. If everyone is holding, a market maker makes no money at all, zero. So, whatever the stock, market makers need volume to make money. How do they do it when everyone is holding - they generate volume, by either raising or dropping the price, depending on "sentiment".
Sentiment ? Market makers, and big players, have tools which automatically check the sentiment on a share by monitoring social media and the quality of SELLs and BUYs. You can pay a lot of money to subscribe to such tools. What I do often, using this board, is calculate what the "sentiment" is, using my own very simplistic Ilka calculations, and, going by the posts on the board since Friday, including one of my own, I calculated that, since Market Makers need any type of volume to make money and the sentiment is very negative because of you know what, that there would be about a 10% drop today. I wasn't too far, it was, at its maximum, a 14% drop. What that does for a Market Maker is generate volume because for some retail investors 0.10 will have been a psychological wall given the current legal situation, and they will sell. This in turn will have others, like me earlier, who will buy - market maker makes money ! Sometimes the market makers' calculations are even more complex : they will factor in automated robots, the ones used by the much bigger players. This is what happened today : by dropping the price significantly, automated robots kicked in and dumped millions of shares, taking the price further down, and many retail investors with them; those robots then re-purchase either to hold, or to dump again when they've made 3% to 5%, because 5% on $100K is $5K.
This is why, as most on here know, it is so important to know what you own and what you think the "long outlook probability" is like, otherwise you get caught in market makers games (nothing negative - they need those games to make money - if I was a market maker I would do the exact same thing) and you sell, or you miss out on a top-up because you are scared.
The point of my post : when the price moves significantly in the absence of any news always remember both the current "sentiment" and the market makers needs to have volume to make money. Then go back to your own due diligence and you will know what to do for yourself.
On this, let's see what this week brings.
~ IlkaS, Y@h00 RLFTF finance conversations
