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Isn’t this manipulation then of retailers by the algos and insto...

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bobsacramento

1,202 Posts.

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10/05/18

22:19

Post #: 33022948
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Originally posted by Roostar ↑

Like Bulkowskis stats, the 50 day / 200 day MA cross is a technical phenomena that historically can indicate the reversal of a trend.

IMO opinion though (and although I do monitor them looking for flags) many of these TA triggers don't fly all that well in the spec end of town...they work better in the high turn over currency exchanges and ASX top 200's type stocks and indicies.

Another thing that has crossed my mind in the past is that many of these technical indicators can be played with and capitalized on by the algo and insto traders (which can be easier to do with a spec - minnow stock that is devoid of any LT fund or large corp investment). The herd mentality has many retails traders sticking to these rules and retail traders are generally more skittish when it comes to daily price action. With good reason as they are 'playing' with their own hard earned. Therefore retail can be tempted by larger/smarter/more sophisticated trading platforms to run for the hills...almost on command. Thus a small push below these TA indicators or support levels can trigger the stop losses they have all been trained to set in the hundreds of courses and book all aimed at the mum and dad investor.

Its almost a case of: while the world plays by the rules, as a trader, you need to bend or break those rules and identify a totally different set of rules to live by. In my limited years of investing I have surmised that technical indicators are merely loose guidelines that can never be relied on verbatim at this spec end of the market.

Sometimes, yes, things play out absolutely text book perfect, but many, many times I have been way wrong on where I believed a price would move.

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Isn’t this manipulation then of retailers by the algos and insto traders? Force retail out on stop losses, which then triggers them to pay a broker fee to sell their shares while buying up shares cheaply?

This seems like systematic manipulation IMO, where there seems to be a different set of rules for algos and instos.

AVZ Price at posting: 18.5¢ Sentiment: Buy Disclosure: Held
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Isn’t this manipulation then of retailers by the algos and insto...

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