“All the fluctuations in the market and in all the various stocks should be studied as if they were the result of one man’s operations. Let us call him the Composite Man, who, in theory, sits behind the scenes and manipulates the stocks to your disadvantage if you do not understand the game as he plays it; and to your great profit if you do understand it.”
High probability trade setups are formed at the TURNING POINTS. If you are able to identify these turning points, then nothing can stop you making the best out of your trading. In this article we will try to identify the TURNING POINTS for any stock or commodity.
We are all players of the GAME. There is someone who makes us play the GAME and we play. Now we will try to IDENTIFY the behaviour of the COMPOSITE MAN. This Composite man will perform his task in the following manner:
- ACCUMULATES the stock at Lower Price
- Marks UP the stock Price
- Distributes the Stock at Higher Price.
If we identify the ACCUMULATION process of this composite man then probably we can follow him and can create a VERY HIGH PROBABILITY SETUPS.
Composite man will accumulate the stock at lower price and during this accumulation process there will be other traders who will also create their LONG position in the stock. Once the composite man is done with his accumulation and is ready to MARK UP the price, he will first try to remove most of the BUYERS from the stock. This will be achieved by bringing the price down just for the purpose of removing the buyers from the trade. Most of the BUYERS will keep their STOPLOSS just below the nearest LOW and the price must reach there to remove them from the trade. After all the composite man has already accumulated the stock and will never keep the price down for long time and hence he will immediately bring the price UP, atleast above his average price. Now the most of the LONG positions are there with the COMPOSITE MAN. Now the stock is ready for the MARK UP.
You can learn this strategy.