Hi Dollings …..
The following are thoughts, opinion, andmeanderings only.It is not to be taken as advice or taken otherwise than the ramblings of an old man.
What does the maxim "Know yourenemy better than your friends - know their ways - think like them - anticipatethem - USE them" mean, and relevancy to PLS?
The maxim, for me, is relevant to andcan be applied in all manner of situations where you want to gain a competitiveadvantage and even-up the transactional or situational playing field.It can be used in anything where there are two or more combatants. You can use it in share trading, procurement, competitive sport, or other areas of life.Anywhere where you want to improve the outcome in your favour or decrease the effect/risk of the opposition on the outcome.
In effect, it is a game-plan – eg. aprofessional (or amateur) team does not go on the field without known who theopposition is, who are the strong players, what leg does my opposite number useto side step – is it right or left, how fast are they over 100m, how they won/lostthe last ten games, relative strengths, where are my weaknesses, etc.All critical information in improving your chance of winning, or negating the risk of being creamed.
In trading it:
a)Helps you make money, or
b)Helps you not losing money
It goes with other great maxims:
-A fool and his money is soonparted
-The stock market is where wealthtransfers from the impatient to the patient
-Rule 1 always protect yourcapital, Rule 2 always remember Rule 1
-etc
Why I think it is important to me – 40 yrsago I lost a lot of money on the market.Young, impetuous, impatient, naive.I never want to go there again as I now do not have the time to make it up again, so I am very careful.Sit like a cat on the sidelines and watch.Be patient. See how things work.If I don’t understand, I do not take part – best way to lose is to not understand the arena you play in.If you do understand, watch, wait, pounce!
The maxim in relevance to PLS has got tobe taken in its context to understand it.
The conversation leading to it was:
Aljen888:That last fiveminutes was pure mastery - push it up from 0.8425 to 0.87 (still under VWAP) tograb maybe 2 million shares then push it down again to 0.845 for the auction..Only took a couple of minutes Wizardry at its best, pure mastery - maggots -well done.
dfs1:Yes, I watched inadmiration. They certainly know their shite.
Aljen888: "Know your enemy better than your friends - know theirways - think like them - anticipate them - USE them"
The situation:
The market is made up of many parts andplayers.
On the one hand we have theprofessionals – institutions, brokers, banks, shorters (maggots) and otherinfluencers.These have BIG MONEY, Smart Money. These are the heavy hitters.Deep, deep pockets. Suits and big fat cigars (figuratively).These are the ones that pull the levers, turn the dials, push the buttons, and move the market.
Then on the other hand we have – well, me(and you).We are extremely small potatoes (with respect).We, in the scheme of the market are nothing – a pimple on the arse of an elephant.We are the sparrows that hide in the foliage, waiting for the crumbs to be dropped by the biggies above, we see an opportunity and dart out of cover to get the crumb – but not before checking that there are seagulls, crows, or something bigger – vultures - are around to pick us off, then dart back for cover hoping we have all our fingers and toes still intact.
Everyday, before I turn on my laptop, Iput on (figuratively) my flak jacket and helmet.I say a little prayer to my God – “Please let me get through the day without loss.Protect me from those that want to screw me. Protect me from impatience. Take away my emotion and let me see clear fact. Amen”.
When I say know thine enemy – it is theprofessionals that in this situation are my enemy – they want my shares, andwill play with my emotions to screw me out of them.I cannot compete with them – I have no levers to pull, or buttons to push.I need to work smarter.I need to understand how they work.I need to get inside their head and think like them.How do they make profit? How and what mechanisms do they use?How do the levers and buttons work? I need to know how they behave so I can see the facts before me – no smoke and mirrors – the market is never how you see it – it has one purpose – to get my shares (an amateur, small potato against goliath).
In previous posts I have referred tohoovering.Just like a vacuum sucking up the shares. They (the prof operators) hoover up, then down, then up, then down. Maximising the accumulation. Shake out as much as possible from small time amateur hands who are susceptible to fear (and greed).They have the money, the know-how, the time to shape the market to their ends.I do not figure to them other than – I want your shares son. I am not a person, I am an inanimate object to them. Give me your shares. I want your shares………..
Yesterday, it wasn’t a hoover (domestic Electroluxtype variety), they had out the industrial ‘Green Machine’ street cleaner – theone with the little guy inside, brushes each side, water jet, turn on a dimecleaner.You get the picture.Well, he went up and down the street between the address .0825 and 0.93 several time.He paid particular attention to the street between 0.845 and .088.Cleaned it out numerous times.A mate or associate was reloading some of the addresses for him to maximise the capital transactions taking place. I say ‘Green Machine” as it was a heavy trading day – 42 million changed hands.
When the conversation above took place,I was expressing exactly what I saw happen – it was masterful how a couple ofmillions shares were hoovered in the last five minutes of play.Really awesome watching it.It had been trading at 0.845 - 0.85 for much of the last hr of play (at a VWAP of .8772). Then 5 minutes to close the trading range started to increase from 0845 – remember, well below VWAP – gobble, gobble, gobble – kept on increasing, 0.85, 0.855, 0.86 – gobble, gobble, gobble – 0.865, 0.87 – they just swept up around 2.5 million shares. Then short back down to 0.845 ready for the auction.All within 5 minutes – amazing stuff. This is the domain of the professional.I cannot compete, manipulate, or otherwise influence the market like this.
So how does this help me (or you). Well, if I know the behaviour of those that drive the market, make the deals, and influence things, then I can maybe use it to my advantage. ie if I buy 100,000 units at the low when they are sucking the supply dry at the low end address on the street, then sell when they make the dash to suck at a higher value, I can pick up some crumbs – that’s one scenario – I make $2,500 in 5 minutes! In another scenario you might observe the behaviour on a weekly basis (there are only some many variations of hoovering that happen) to buy low and sell high.Another scenario is to just observe in awe at how the market plays – yesterday was such an occasion – again, well done maggots.
Anyway, this is how I see things, andhow it helps me.You make you own mind up about whether it is useful to you and its relevance to PLS.
Merry Christmas all (even maggots).Taking a few days off HC.Suddenly realised that Christmas is upon me and the missus. Out sorting things this morning – bedlam on the roads and in the shops – but got another bucket of paint for my Christmas stocking.
All the very best – Harry – hope youhave a good one.
PS here’s another one apt for thesituation (know thine enemy) – Kenny Rogers – The Gambler
Merry Christmas all.
On a warm summer'sevening
On a train bound for nowhere
I met up with the gambler
We were both too tired to sleep
So we took turns a-starin'
Out the window at the darkness
The boredom overtook us
And he began to speak
He said, "Son,I've made a life
Out of readin' people's faces
Knowin' what the cards were
By the way they held their eyes
So if you don't mind my sayin'
I can see you're out of aces
For a taste of your whiskey
I'll give you some advice"
So I handed him mybottle
And he drank down my last swallow
Then he bummed a cigarette
And asked me for a light
And the night got deathly quiet
And his face lost all expression
Said, "If you're gonna play the game, boy
You gotta learn to play it right
You've got to know when to hold 'em
Know when to fold 'em
Know when to walk away
And know when to run
You never count your money
When you're sittin' at the table
There'll be time enough for countin'
When the dealin's done
Every gambler knows
That the secret to survivin'
Is knowin' what to throw away
And knowin' what to keep
'Cause every hand's a winner
And every hand's a loser
And the best that you can hope for
Is to die in your sleep"
And when he'dfinished speakin'
He turned back toward the window
Crushed out his cigarette
Faded off to sleep
And somewhere in the darkness
The gambler he broke even
But in his final words
I found an ace that I could keep
You've got to knowwhen to hold 'em
Know when to fold 'em
Know when to walk away
And know when to run
You never count your money
When you're sittin' at the table
There'll be time enough for countin'
When the dealin's done
You've got to knowwhen to hold 'em (when to hold 'em)
Know when to fold 'em (when to fold 'em)
Know when to walk away
And know when to run
You never count your money
When you're sittin' at the table
There'll be time enough for countin'
When the dealin's done
You've got to knowwhen to hold 'em
Know when to fold 'em
Know when to walk away
And know when to run
You never count your money
When you're sittin' at the table
There'll be time enough for countin'
When the dealin's done
MERRY CHRISTMAS
(20min delay)
