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- #202
- Jan 1, 2018 3:33am Jan 1, 2018 3:33am
- Joined Mar 2011 | Status: I should be on your ignore list | 5,597 Posts
- #203
- Jan 1, 2018 4:13am Jan 1, 2018 4:13am
- Joined Oct 2012 | Status: Trade Small, Win Big | 4,988 Posts
If you are good at something, never do it for free--Joker
Hi, Quick question. How does the smart money reverses the trend ? Let's say SM adsorbs all the pending retail shorts on a downtrend, once there are no more shorts, does SM start buying initiating new large long positions ? and in that case who is the counter-party if there is no one left to sell ?
some quick questions which need a longer response
I will write something later.
- #206
- Edited 9:23am Jan 1, 2018 9:05am | Edited 9:23am
Hi, Quick question. How does the smart money reverses the trend ? Let's say SM adsorbs all the pending retail shorts on a downtrend, once there are no more shorts, does SM start buying initiating new large long positions ? and in that case who is the counter-party if there is no one left to sell ?
Answer: The smart money changes the mindset of herd from e.g. short to long with a bullish trend reversal pattern and a subsequent strong move to the upside. Once that change of the mindset is completed the long trend will run further without the help of the smart money.
Why does the trend run further (after a reversal pattern and strong move) without the help of the smart money?
Reason 1: The greed based emotions of new bullish traders
Reason 2: The fear based emotions of short positioned traders (they will exit when their maximum pain tolerance is reached -> bring long orders into the market)
After a reversal pattern occurred e.g. a double bottom, the emotions of the members of the herd have the result that the herd as a whole will bring more long orders than short orders into the market. These emotions (greed of the long traders / fear of the short positioned traders) will nurture the upward trend.
Let's say SM adsorbs all the pending retail shorts on a downtrend, once there are no more shorts, does SM start buying initiating new large long positions ? and in that case who is the counter-party if there is no one left to sell ?
Answer: No, the smart money doesn't start buying initiating a new large long position after there are no more shorts from the herd. Instead, the smart money started building a large long position earlier, during the downward move.
If you look at following sketch then you can see that the smart money was buying during the entire downward move (the green area). In the upper part of the green area the smart money exits the short position with profit. The exiting is done by buying back the short position. After the short position is exited the smart money has no position (the cart is empty). In the lower part of the green area the smart money fills the new long position.
How to look at the Forex market
To better understand what I have written before it helps a lot if you look at the forex market like this:
The inner core of the forex market consists of the inter bank market. This inner core is the smart money.
You can see the smart money as the service provider for the forex market. The smart money takes automatically the imbalance of the herd.
If the herd (as a whole) owns a net long position then the smart money owns automatically a net short position:
If the herd (as a whole) owns a net short position then the smart money owns automatically a net long position:
The herd (as a whole) is moving from one state to the other. At the same time the smart money is automatically moving to the opposite state.
The smart money can "help" the herd to make the decision to change its state
-> chart patterns, trend reversals, strong moves etc.
Reminder: there is a FREE signal service where M30/H1 signals are provided, with a telegram group and signal voting!
You find it in the new SIGNALS-section on the website.
1. Please register to get the invitation links to the telegram group and channel
2. After you receive the signals you should go to the voting page to vote for or against a signal (according to the guidelines which i have written in this thread and based on your personal judgement)
Please invite as much fellow traders as possible. The more people vote and discuss the signals the better it will be for the less experienced traders.
This is what a very experienced trader "Mustafa Faisal" says about the signals which were automatically delivered into the telegram group:
And Mustafa knows to trade. See his analysis of the recent signal on AUDUSD:
So don't miss the great learning opportunity and join the telegram group!
You find it in the new SIGNALS-section on the website.
1. Please register to get the invitation links to the telegram group and channel
2. After you receive the signals you should go to the voting page to vote for or against a signal (according to the guidelines which i have written in this thread and based on your personal judgement)
Please invite as much fellow traders as possible. The more people vote and discuss the signals the better it will be for the less experienced traders.
This is what a very experienced trader "Mustafa Faisal" says about the signals which were automatically delivered into the telegram group:
And Mustafa knows to trade. See his analysis of the recent signal on AUDUSD:
So don't miss the great learning opportunity and join the telegram group!
I can't see any comments either. That's what I can see right now: {image}
You and Tim need to join the telegram-group too, not only the telegram-channel!
In the email where you found the link to the channel there is also a link to join the group.
There are 2 reasons why i provide both:
1. you can unmute the channel to get alerts (sound/blinking on your mobile phone)
2. you can mute the group, so you don't get disturbed by every message of the group members
Link to the FREE Signals
Link to the Free Double Top/Bottom Indicator
- #219
- Jan 3, 2018 12:06am Jan 3, 2018 12:06am
- Joined Mar 2011 | Status: I should be on your ignore list | 5,597 Posts
