I have never ever heard the real truth as regards to market action on television or in newspapers. As a trader, you will find you are constantly mislead by lies, roomers, misinformation. So on the basis of this information arriving on your doorstep will give you and thousands of other traders a completely wrong feel as to the markets real intent
Believe me, the markets move on the shifts of large blocks of professional money, tipping the balance of supply and demand one way or another, which to the trained observer you can read.
Supply and Demand
We have all heard the pundits in the money section of our news programs telling us that this market or that market, has gone up, down or sideways, for some specific reason or another.
The price of oil has gone up and the stock market has fallen. - for example.
Of course, at another time the price of oil will rise and the stock market will rise too - but nobody ever seems willing to explain this apparent dichotomy. The simple truth is that nobody really knows why news may have caused the markets to move in one direction or another. News doesn’t actually drive the markets, it follows it.
Prices are driven by supply and demand. When demand is strong and supply is limited prices rise. When demand is weak, or supply is excessive, prices will head lower. If demand is strong and the news is, bad prices may still move lower, but the market will react less strongly than if the demand had been weak or there was too much supply. The market may even rise despite the worst possible news.
The key to trading successfully is to determine the balance of supply and demand in the market.
Many good traders have a sense of this without even trying, there are ‘natural’ traders who always seem to be on the right side of the market, but if you are not able to do this instinctively you can learn to do it through Chart Reading Method? And you will be amazed at how much you will learn in a short time.
I will use Acronyms. You will understand these simple terms shortly…
ND — No Demand; NDW, or ND-Wave — No Demand Wave
DB — Demand Bar; DW, or D-wave — Demand Wave
SB — Supply Bar; SW, or S-wave — Supply Wave
NS — No Supply; NSW, or NS-wave — No Supply Wave
SLK — Stop Loss Killer; SLKT — SLK at the Top (bearish sign), SLKB — SLK at the bottom (bullish sign)
EVR — Effort versus Result; EVRW — EVR wave; EVRT — EVR at the Top, EVRB — EVR at the bottom
SOS — Sign of Strength
SOW — Sign of Weakness
ZOS — Zone of Strength
ZOW — Zone of Weakness
SFDB — Support from Demand Bar
RFSB — Resistance from Supply Bar
TF - TimeFrame (period)
Cha Cha - Change in Character