minishark

Thanks for your input since, as usual, there is little out there that leads to the truest picture of how Professional Money views and acts on the same charts that we all see. You figure that if the statistic is correct that 95% of all retail traders get it wrong... then the quest for proper knowledge should be directed toward the following question: How does Professional Money see the same chart that I am looking at and know how to act in silent coordination with other Pro Money participants? I would appreciate your opinion, confirmation, and/or corrections to the following: I have studied up on Wycoff's method of Volume Spread Analysis which begins to enlighten those who are passionately seeking the knowledge of how to understand exactly HOW the markets are manipulated in favor of Professional Money. I have found that the market is a constantly changing story that is playing out in the 5min time frame. In short, if Pro Money truly wishes to take price higher... they will first move the market swiftly lower to flush weak holders out... this is the first step in establishing a NEW ZONE for buying at "wholesale prices". Step 1: The first sign of Pro Money stepping in to BUY is recognized by an extended DOWN bar on HIGH volume that finishes formation in the middle, or better yet, toward the upper 10% of the bar. Stopping a falling knife can only be accomplished by Professional Money, since their analysis is better, more accurate, and includes their ability to SEE full transparency of order flow as they make their markets. Step 2: After the first sign is established visually on the chart... this sparks the patient interest of other Professional Money players. Price will rise to reach technical level retests... then will be rushed to "TEST" that prior LOW. *Here's an aside: All the books out there teach traders that the "Trend is your friend" and can be seen as price continuing to make new lows or new highs. WRONG! Step 3: Often, as Professional Money forces the test on the prior low... they will intentionally throw the public off by allowing price to take out the prior low... therby fooling 95% of traders into thinking that the downtrend is still in place. This is important for the next phase for the move UP. Step 4: RETEST IS ON LOWER VOLUME Since price is driven by Professional Money, only they have the ability to "PAINT" the volume in the way they do. If the retest of the recently established low creates NEW LOWS but is done so by marking a volume bar that is significantly lower then the original "stopping volume" bar... then the silent community of Professional Money players can assume that this ZONE of price has now been established as a temporary BUY SUPPORT ZONE for WHOLESALE PURCHASING. Step 5: Swift price rejection at the lows to TRAP unsuspecting retail traders on the short side. This is a key psychological component Professional Money players use to their advantage. Since 95% of traders saw that price made a new low on the retest... they think the Trend is their Friend and that they will beat the market by SHORTING the break of those new lows... a fools game. They have essentially just become FUEL that will actually LIFT the market HIGHER as they slowly realize their doom and act to BUY to cover their losing SHORT trades. Step 6: Professional Money traders were watching the retest on LOWER VOLUME as their sign to jump in and help to propel price higher on the 1st sign of a solid momentum rush UP. Their activity in unison is enough to SHOCK price UP through the recent zig-zaging congestion zone which quickly TRAPS all short traders into their losing positions. This ensures that the SHORT SQUEEZE will be in play when price pushes UP and OUT of recent consolidation highs... Just above these highs is where the resting BUY STOPS are sitting wating to be tripped to start the infamous SHORT SQUEEZE. Step 7: The first rush up and out of this ZONE is seen by the losing crowd as ANOTHER SHOT AT GETTING SHORT, since they still think that the UP move was only a minor squeeze and price must be heading lower since they witnessed new lows on the last retest move down. Dumb money will short this rally too, only to be forced again to cover their losing positions as Professionl Money continues to BUY price higher and higher... forcing all losers to also BUY to cover their shorts. The opposite can be witnessed when Professional Money is done with the UP move, and the general mechanics are reversed. The first sign of Pro Money stepping in to SHORT is recognized by an extended UP bar on HIGH volume that finishes formation in the middle, or better yet, toward the lower 10% of the bar. There will be a retest... and maybe even 2 or 3 retests... but when Pro Money is convinced the buy volume has officially TRAPPED enough retail traders on the wrong side of the move... That's when they act to psychologically force the losing crowd to help propel price in their intended direction. That's my take. As mentioned, I'd appreciate your professional confirmation or reaction to this viewpoint. Thanks very much! Regards.