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Replies to #19873 on lowtrade
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lowtrade

12/17/10 8:43 PM

#19875 RE: TA_Sleuth #19873

Playing norms for a manipulated day trader stock.

A perfect day trade!!
Break the day up into morning, lunch, afternoon.

Morning is the most active, price & volume wise.
Rush hour from 9:30 to 10:30 is when the big guys position themselves from the end of day before, selling higher or accumulating lower.
Brunch from 10:30 to 12:00 is when they follow through with rush hours positioning.

Lunch hour is usually a stall point, mid way between the rush/brunch price swing.

Afternoon you normally see another price swing, 1/2 in size of the morning, ending at the lunch stall price.

Usually if they end even, they dive next days rush hour to load up and sell brunch for profits.
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But depending on the ease to manipulate or strength of retails desire seen, they may end the day selling higher or buying lower.

If they end the day selling higher, the next rush hour will start with them loading up lower. Rush hour will dive.
If they end the day loading up lower, the next rush hour will start with them selling higher. Rush hour will run.
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Just keep in mind, they buy lower before they sell higher. Think of the ripple a stone makes in a pond. Large ripples getting smaller. Thats the daily pattern the pro day traders work for. They would love to repeat that forever. But thats not reasonable. Some times they need to end high to keep interest and some times the need to end low to keep control.

You see they think daily and the retail herd thinks trend. If the price stalls flat, retail will loose interest. If it trends up to long, emotion will take control from day traders and if it trends down too long, retail will panic sell and stop trading. In order to keep a steady rev stream, retail must continue to trade.
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How do they (pro day traders) get what they want?

With the aid of the other entity which wants a rev stream, the market maker. M&Ms will chase large block orders, pro day traders place to signal direction.

(I've loaded up low enough, large block order above ask, the M&Ms run to close it!)
(I've sold all for profits, want more lower, large block order below bid, M&Ms will dive to close it!)

M&Ms make money in 2 ways, buy trading their inventory and fees on volume.

Because of the two order books on the OTC. M&Ms can trade in front of retail with their inventor and arbitrage the chase for the block orders pro day traders signal with. M&Ms also love the emotion which increases volume during the day, caused buy fast price direction changes.

The OTC wild west.
In a day traders stock, the retail herds trail boss is the big guys, the wranglers, which move the herd are the M&Ms.