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11/05/23
18:58
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Originally posted by exberliner1:
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You cover most of the tricks here but missed one. In a hot stock you sometimes get situations during the trading day when the buy side depth is weak for a short period of time. The trick here is to dump into all of it and push the SP down several levels at a time and hopefully attract a pile of trailing stop loss and standard stop loss sells. This creates the illusion that the real market is down here where you have pushed the stock. You then do it again if you can. Now you are down several levels X 2. But you have sold a useful chunk of your holding which on the face of it doesn't make sense. However if you over the course of the process you end up selling 2 to buy 3 at a much lower price then you are actually increasing your holding at a lower price than just buying off the offer. This allows you to take a decent spread between your average buy price and the VWAP if done properly. BEZ only went through a $100mn mkt cap a few days ago and most instos usually don't buy stocks with a mkt cap below $100mn unless they are specialist micro cap funds. I doubt that big instos with $billions under management would be interested in BEZ as it is far too small. But, brokers loading up their trading book, and specialist gold stock funds seeing the mkt cap enter their buy zone will be employing the sell 2 to buy 3 concept. I know this to be true as in a previous life I was the insto trader employing exactly these tactics to fill order from my portfolio manager as cheaply as possible. I might add that I was doing this in Europe when I lived there and not in Australia but I could certainly see evidence of my old strategies at play today. So even though we were down today the reasoning behind the fall I find strangely positive because we are seeing professionals start to take an interest in BEZ. EB
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Good explanation of manipulators taking advantage of the great unwashed. Beggars the question of my favourite hobby horse.Why do these amateurs use stop losses?. If you’ve done your research and are not a panic merchant on a minor(often manipulated) pull back you are invariably stopping gains- not losses. Wake up and change your strategy or you’ll end up like 90 % of pip/day traders-BROKE.