I believe, there are no bulls and bear in the market, there are just stock operators. These operators are the people/institutions with the big money and resources to take stock from point A to B and then back to A. Read below in your free time to understand, how operator runs stock, trap retailers & how they generate profits. And in the whole process, how and when retailers lose their hard earned money.
Phase 1 - Pumping In this stage consolidation happens, the longer the consolidation time frame the better stock will move.
Phase 2 - Increase in OI If the stock is in Derivatives then they will buy calls, futures & short puts before Bull Run.
Phase 3 - Breakout Buy with the huge volume for a day or two, to push stock beyond resistance zone. This is the phase when every financial advisor generates call for retailers and this is the phase when retailers get their 1st loss because of phase 4.
Phase 4 – Shakeout (Dump in small quantity) Now the operator dumps stock in small % of quantity bought and this is the phase where they hunt for retailers SL. If someone bought shares for Swing trade (For 1 or 2 weeks time frame), then there SL will get triggered first. Swing operators usually view charts in 2 hours timeframe. These people usually keep their SL of certain candle low or below VWAP or some pivot point or maybe some other indicator (1st mistake retailers think that the operator is stupid & doesn’t know how retailers think or where they keep their SL). Definitely thinking that we can outsmart these people so easily is the biggest mistake retailers make. If someone bought shares for short-term duration (Less than 1 year or usually 3 to 6 months) then there SL will be triggered next because there SL will be somewhere in the consolidation phase depending upon the risk appetite. These retailers usually view charts in 1 Day time frame. In this Phase operators cover the interest cost and make small profit on the amount invested for so many months. Remember depending upon the market condition like during Covid Fall recovery when free lunch was getting served to all retailers operators skip this phase.
Phase 5 – Stock Rally (Bull Run) Again breakout, in this phase small institutions or investors enter into the stock or average out their buying. Now the retailers who already lost their capital in the stock will not enter because of fear or hate from the stock (Yes emotions play an important role in the market). In this phase small institutions, investors, retailers buy/sell stocks and book small profit & losses. Definitely losses are booked by retailers who have bought shares without research and are gambling with their money.
Phase 6 – Stock Dance Operators will make stock dance for few days to generate retailer’s interest for quick 5 to 15% return and trap some on the higher price.
Phase 7 - Dumping (Bear Run) Before dumping they will again go long on put & short futures/call. Now those who have bought shares for Swing will book small losses & short term/long term retailers are gone because stock sometimes takes years to come back on the buying price. In this phase retailers won’t even get the time to exit from the stock.
In the stock market there is no lift. When stock goes up, it takes the stairs (Up-Down-Up), stock gets tired, it rests and then again starts it journey & when if falls then it is always jump from the terrace (Free Fall).
In this whole process, Operators, small institutions or investors generate good profit, doesn’t matter whether it’s going up or down they make money and retailers lose money if not in 1 stock then in another.
Now the question is how a retailer can save themselves from these sharks, who are there to take pound of flesh and how can a retailer take profit from their jaw.
Follow this 3 Step process to get success in the stock market.
1. Knowledge & Setup – Get detailed knowledge of all the instruments & major indicators available in the market. Create your setup, decide your time frame, calculate your risk appetite and back test your system. 2. Research – Do extensive research on the stock, decide your entry, SL & exit strategy before investing in any stock or instrument. This research can sometimes takes days or weeks to find the right entry and if your entry and timing is right then 80% of the battle is won. 3. Disciple – Trade like a robot & never allow your emotions like fear & greed to overpower you. Know when to average, book loss and take profit. Without mastering these 3 steps one cannot make a profit in the stock market.
Remember without these 3 steps you will just bleed more & more in the market. Don't be a bull or bear, be a opportunist (Be an Eagle).
Thank you for your valuable contribution to the TradingView community and keep up the good work!
Good clear chart with good clear explanation.
I liked the explanation of how operators run stocks, trap retailers and how they generate profits.
Highest-Bidder
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in ultra short term, operators move stock prices according to retailers positions. in short term as per technical indicators, but in the long run, operators can't defy or go against fundamentals of a stock.
gamblers always lose money, traders win sometimes lose sometimes. net = negligible profit. it's only who have patience and holding power, irrespective of share price movement, earn real money.
why blame operators, when our own psychology of greed takes over prudence.
Vinay227
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@Highest-Bidder Yes agreed, but the way they play with the mind of retailers by creating fake news, calls to trap us, that is where we have to master and use our brain to outsmart them.
If you remember there was news of ethnol in the last days of June according to which all sugar stocks were supposed to rally but what happened is from the start of July they are falling some are more than 50% below from there high. There fundamentals are still good, there growth prospects are still there but majority of them are still falling.
Highest-Bidder
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@Vinay227, exactly. I had sugar stocks which were in handsome profit. But the news of ethanol came and i didn't booked. Retailers can't outdo operators until they also unite like Reddit users in US. Operators are strong because they have insider news, technical team, latest IT resources, and above all they work in sync, in a group.
If retailers can unite they can also benefit from the market.
Vinay227
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@Highest-Bidder, That's why I follow trend and price instead of news and instinct. There is a saying Bhav Bhagwan Che (Price is God). Simple BB, RSI and MA are sufficient to confirm the trend. If the price is not showing strength then y would I buy or keep stock in my portfolio.
Vinay227
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@Highest-Bidder Couple of days back I posted an idea related to Adani Green & Fortis Health. Also, along with Adani Green I bought ATGL & ADANITRANS on the same day and all now ADANI stocks are giving Upper circuit and Fortis is also giving more than 10%. Entered in all these stocks based on pure price action. Stocks were showing strength so I entered once they show weakness I'll exit, simple, no news nothing.
Highest-Bidder
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@Vinay227, I only trade in NIFTY50, Bank nifty stocks. Or at the most nifty Next50. And among these which are in F&O segment. I don't have a portfolio holding. Stock Futures & CE/PE are a better way to go both ways (Long & Short). EQ only players only make money in a bull market.in baarish market they lose money.
Vinay227
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@Highest-Bidder, That's true, once you have mastered all Greeks then F&O gives best ROI. But this is the place where most of the new players loose money. I m still learning and backtesting them, once I have created my system and I m sure 80% of the time my calls will work then only I'll start trading F&O. No Rush
Highest-Bidder
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@Vinay227, 80% accuracy is not possible, no matter how much you learn. Backtesting is one thing, but when you take actual trades in F&O, that's when operators grind you. Because there real money is involved. Operators are not there to give you free lunch.
Backtesting is a myth. Once more retailers take substantial positions, operators never let the stock move in the anticipated direction, UNTIL majority on retailers exit.
These things no one teaches you.
Vinay227
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@Highest-Bidder, Thanks for the heads-up, till now my Positional trades are going good and I have started BN options trading in small qty, which is also generating decent profit. Fear & Greed are the 2 biggest enemy of trading and that is where I m training my brain and trying to trade with system and logic only and no emotions. I wasted a lot of time and money by following other people calls because of which I generated fear of losing so I am trading with more cautious now.
Let me tell you something that happened today, I received a call from someone who said sir if you invest 1lac and trade on my calls then I'll give u 30% return every day. To which I told him sir why are u calling me to invest, you trade urself on your calls and in 2 months time that 1 lac will become 460cr and by the end of 3rd month u will be richest person on earth. Y r u wasting time in making clients. My target is to earn 10% of capital deployed every month which is also huge I know and so far I am able to achieve it. Let's c what happens in the future.
Thank you for your valuable contribution to the TradingView community and keep up the good work!
Good clear chart with good clear explanation.
I liked the explanation of how operators run stocks, trap retailers and how they generate profits.