Broker's, Media and market talk all in your best interests

In the past few weeks some emails arrived which has shown there is a great deal of bright people who have seen what truth looks and sounds like, but equally there are a lot more who just dont understand that they are being fed a BS story.

Allow me to elaborate. When you trade your money only you have earned the right to spend this money. Why then do traders spend so much time looking at the financial news, the myriad of financial websites, forums and printed media which all feed them old information and well past its sell by date. Perhaps it is a case of the herd want to be led and the fear of the unknown is worse than being able to make decisions based on what you can see for yourself, especially when you know that most retail traders will not make money in trading.

Who has your best interests at heart?

Your broker?
The newspapers?
The financial TV news channels?

Why not employ some logic to this and look at who the above target as their income stream, could it be the advertisers are the ones who are really in control, after all they all spend millions on adverts and unless they see results they would not advertise. And with all advertising there must be a customer. Who could this customer be, after all these big names have all the information in real time from the real news services all over the world who charge them big money to stream this into their offices 24hrs a day. The advertisers have no real interest in making money from the mainstream news, because the pro money people are the ones who make the news the media reports......smell anything yet?

As this mental picture slowly builds, now think about what it is you see and are being fed. All the content you see and hear is old news, far too old to make money from and all these stories and adverts are of no use to pro money, they have taken positions long in advance of the 'breaking news'. It stands to reason the target of the big three, is you.

For over a hundred years it has been proven and tested over and over again that people react to news, and if you get the news before the next guy, guess who has the better deal?

There is more power in the fear of loosing than there is winning, and so any held money in a bearish market will see much faster declines over rising markets. The pro's are of course all well positioned with open arms to take your dumping panic. They call this bag holding.

Dont take my word for any of this, but go and conduct a simple test. Find a stock that has had a major news release and watch for its gap opening, it doesnt matter if it gapped up or down, just look for the gap. Now go back in time on a chart over at least a weeks trading and see has the stock been bought into or sold off.....slowly to not tip off or create volume spikes.

What you will see if pro money dont get caught on the wrong side most of the time, they know that if the news is bad, the herd will have a ton of sell orders waiting at the next mornings open and there will also be lots of market sell orders on the day. These orders must have buyers, who are the buyers?....pro money, and they wont be buying unless they know the direction in which the stock has to go and will be driven by them.

You can see a similar effect before earnings, in particular note your favorite stocks and watch for a few weeks before earnings and see can you spot the stock tapering off, or a slow rise. It can be very telling.

I mentioned stocks because most of this nonsense cannot happen in the major Forex pairs due to the high liquidity and the non existence of a currency ownership instrument. Gaps in currencies are less frequent and dont cause the same ripple effects as seen in stock trading. I wont even get into stock manipulation, you can see that in the charts around news times, earnings and quarterly results etc.

You will still be lied to your face on the financial news channels which I treat as the best fantasy entertainment there is and I laugh happily at the screen most evenings. During live trading the TV is firmly off. It is great fun listening to the 'big dogs' as some call them and how they call the market, especially when it comes to currencies and commodities. One clown said a few weeks ago he was strongly bullish on Silver.

Below is the daily chart of Silver. Our big dog who was so strongly bullish on silver paid enough money to the TV channel to allow him come on air and help him sell into the herd buying.....cos they heard some expert on TV saying Silver is a strong buy. The dog is close to ending his run now and a choppy market will set in. Our hero is now out of his position and any of the herd who bought in are screwed.

Another example will help cement this in your mind. How about we look at the much pimped South African Rand, one of the many developing countries who have 'been on a successful bullish trend' according to the media in recent weeks. The result of this not to be missed buying opportunity for your whizz kids?

Oh dear, you were lied to again.

And to really hit it home, use your own means to detect when anything is being hinted at you to buy or sell from those who do not have your money in your best interests. Here is the Rand on a monthly chart.

Down she goes in grand style.

Many years ago I heard a good saying.....if you want to truth, follow the money. For us, it is great to see where the money trail is leading, either into supply or demand and even better, we can wait until we see the pro's lead the way.

I could put show some charts from the London session which is where most of the currency action takes place and where the open and close is treated just like the above chart, but at a much faster pace.

Day trading is being able to see what kind of market we will have for the day, and expect early on for a push and reverse, they must get most of their orders filled in a limited time and getting to new supply or demand is very important for them, and then get to the opposite side before the close.