Stop losses and their effect on price

[So_Cynical]

So there are trends because the Price is Always Right ?

No there are trends because the price is always wrong !

Yes in a static sense Price is "right"
But in a Dynamic Sense NEVER

There is always a Trend
A Line of least resistance

Why ? Because The price Right now is Always WRONG.
On All or Certain Time Horizons..

The Most dynamic trends might well
Occur when on ALL Time Horizons
The PRICE IS WRONG

I like this concept, it makes some sense in that the price is always changing so never really reflects the real value of the "investment" which can never be accurately calculated at any given time.

 

[Wysiwyg]

A traded Price IS a difference of opinion
or do you think NOT ?
Do you think that a trade occurs when both Buy or Sell ?

Yes there is difference of opinion in future price and hence the agreement on present price.

 

[lukeaye]

I agree with what you are saying motorway, that the constant battle between buyers and sellers creates trends etc.

I am debating another side though, im debating from a fundamental valuation, you can never be right about the stocks price. The price is NEVER wrong compared to a valuation. That the price reflecting supply and demand is always right, not the valuation. Im saying that this is dynamic, so it makes it impossible to value a stock accurately.

As you said, if we had everyone agreeing on the same price, there wouldnt even be movements/ trends in price.

 

[motorway]

Price is Right
Price is Wrong
?
Should I Buy should I sell..
?

Ok If your are succesfull trader

From now on Just Buy when you would have sold and Sell when you would have Bought..

Or even better find a succesful trader
and take the other side of their trades..

In Wyckoff's terms do the opposite of the Composite Operator

Model someone and do the opposite
Investors could do everything Buffet does but in reverse..

Buffet always thinks Price could be wrong
Or maybe it is wrong 80%

BUT could be is not should be !

What might reveal That Price is Wrong ?

The Study of Responses & The STUDY of TRENDS

VOLUME Indications
Speed of REACTIONS

In fact the Study of responses
Reveal what Wyckoff called Character

Wyckoff Distinguished between Appearance
and Character

Character is what matters
And The Study of Responses is what reveals


Motorway

"The study of responses ... is an almost unerring guide"

Rollo Tape (Richard Wyckoff), 1910

 

[motorway]

How many have seen
Prices continue to Trend

Regardless of good news or bad ?

The Study of Trends is Such a Powerful Thing..

The PRICE CONTINUES TO TREND because ?

The PRICE CONTINUES TO BE WRONG

It does not matter what the News / Fundamentals or our WISHES..
Might be or are..

What really matters
Is what is not known..

What WE DON"T KNOW

Because Price will TREND Because Price is WRONG
We need to USE some form of a STOP

regardless of the effect on the Share price..


IF we are on the Wrong side of a TREND
Then We will BE THE END..

LIFE ITSELF or anything ALIVE IS A TREND
ALL Requiring Frequent STOPS

So as There will be BETTER ENDS.. Than there might have been

Motorway

 

[brty]

lukeaye

I am debating another side though, im debating from a fundamental valuation

But what accuracy is there in your valuation?? Again it is the unknowns that are at work against you. Your perception of the fundamental value can/will be completely different to another persons. How do you know if your information is better than theirs??

brty

 

[beerwm]

seems like motorway is saying 'buying/selling pressure' cant be expressed in PRICE instantly.
-thus the diffusion of pressure over time reveals a trend on a chart. liquidity.

 

[beerwm]

Fundamentals vs Techincals,

you can derive a statistical edge out of any combination of factors that effect market prices,

Index
[Announcements/Data/News] - Fundamentals
[Sentiment]
[Price] -Technicals

Stock
[Announcements/Data]
[Assets/Liabilities/Equity/PE/Management] -Fundamentals
[Dividends/Capital Raisings]
[Sentiment/Hype]
[Market Depth]
[Price] - Technicals

Most popular are technical factors as they are perhaps the easiest to interpret,

 

[weird]

Never become involved in any equity, move on ... find a pattern whether it be a move from a consolidation or continued move in momentum, whether trading futures or stocks, you go with wot moves, anything else is just wishing, and real traders make profits or losses on actually trades. Nothing ever fails under perfect analysis.

 

[lukeaye]

But what accuracy is there in your valuation?? Again it is the unknowns that are at work against you. Your perception of the fundamental value can/will be completely different to another persons. How do you know if your information is better than theirs??

brty

Thats what im saying?