Stock Market Support Groups

This post is dedicated to all the traders who believe in technical analysis. If you're a fundamentalist, don't waste your time reading this post because this doesn't apply to you.

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I was browsing my feeds this week and I saw this

(Click Images to Enlarge)

Side Question : Why wasn't it given the same attention when it first broke out (1)?

Here are a few other notable groups I noticed.

And this one is my personal favorite because of the Description. I admire the honesty.

I would understand true fundamentalists who are in these groups because that's just how it is with fundamentalists - you consolidate all the news and information you have in one "drawer" and that's fine. But for anyone else who isn't a fundamentalist?

Strength in numbers. This is the most common mistake people think works in the markets. "If we group buy the shiz out of this stock, this will definitely go higher." 

But you know what? The market doesn't work that way. 

And I've seen groups where popular gurus, company owners and CEOs are present and give buy recos with outrageous target prices on their stocks - AND then dump shares to your face. 

You think these people care about you? 

The market is like the government. You can lock arms, hold hands, protest and rally all you want with your buddies. But by the end of the day, the market does what it wants, regardless of anyone's opinion or feelings.

Photo Taken From Google Images (Rappler)

If you want to survive in the markets as a trader, follow these two principles : Never trust anyone with a buy reco. And take everything you hear with a grain of salt.

The Anointed Ones and The Bearish Divergence

I'm sure most of you have seen these anointed ones all over social media and stock market groups. The funny thing about these guys is how much they love to be right...

... even when the market tells them otherwise.

So let me first enlighten you to a very powerful prophetic indicator that only a few mortal men use. 

The Bearish Divergence

A bearish divergence appears when the price makes a higher high but the RSI forms a lower high. Simple right? If you want it in more simpler terms, it could be that most people are bullish on a stock but the price isn't going anywhere and suddenly one day, decides to drop - which confirms the divergence. 

Now let me take you to another session of appreciating renaissance art while understanding sentiment cycles. Let's begin!

When a monster rally starts on a stock, people obviously take notice. Anointed ones would then claim how beautiful this company is based on their market experience. So they urge the new bloods to read on the company.

Obviously this would lead into a lot of discussion. Some would try to refute and warn but ultimately drown as things turn when gurus would then claim victory over favorable price actions amplified by the voices of their cult following.

At some point, many would profit from the run. And some would usually share how lovely their experiences were and how glad they listened. Their "work" would then be used as gospel to the unbelievers.

"See? Bagger na kami! (Actually not yet for me, but) Be quiet and just sit tight!" 

But of course not everyone would profit. And when things turn a little sour and a few start to doubt, the anointed ones and their cult would then start speeches that contradict and confuse - ultimately to have the follower confident of his or her position... to be confidently confused.

We all know where this is headed right? But not a lot would accept the market's truth. 

When you see this statement, it really means "I don't know what this statement means but I'll say it anyway so I'll look smart."

This vicious cycle is very prevalent when you see anointed ones here and there hype the certain stock non stop even during consolidations and obvious price dumps.

When a bearish divergence confirms and materializes the bear, that's when things get nasty. So if I were you, I'd be taking what I have even if it is at a loss and don't look back.

Click here to read a previous similar post.

Primal Hunters

I've been playing a PC game recently, one which I've longed to play since it was announced in 2010. I've deprived myself of this dream for too long and now, the wait is over. I just can't help but see the resemblance with how the markets work.

Watch



 

Traders are like Primal Zergs. Those who are able to kill and thrive in this environment, evolve and grow bigger. Alliances are an illusion. The reality is competition and survival. The market is after all, a Zero-Sum Game.


It's Eat or be Eaten. 

The Rationale Behind Multiple Ports

You are the most fearless archer in the whole village. You wander around the woods to hunt the evil that lurks in it. You have found your target, a tiger. The foul beast that has been killing all the villager's animals and your beloved turkey that you have so dearly taken care of for the coming winter. 

You approach silently and pull out your dagger from your sidepocket. The mighty tiger knows what's going on and motions its tail as if beckoning you closer to its presence.

"I've got this" You think to yourself.

You breathe deeply as you prepare to strike. When suddenly, the tiger disappears from your sight! You then notice the painful warmth of your own blood gushing from your neck as the beast delivers a critical bite that ends you instantly.

What the hell were you thinking archer!? You had one job and you used the dagger!

Welcome to portfolio Mind setting 101 ZF Style.

I'm assuming all of you have read these 3 Posts Below :

http://zeefreaks.blogspot.com/p/zf-portfolio-class.html

http://zeefreaks.blogspot.com/2015/01/the-trading-port.html

http://zeefreaks.blogspot.com/2015/06/the-cost-to-trade-for-living.html

Some of you have been wondering why the hell I do resets and have 3 different ports. Let me explain.

I'm a gamer and I look at the markets as a game. If you've played FPS (First Person Shooter), RPG (Role Playing Games), RTS (Real Time Strategy, or TBS (Turn Based Strategy) games like Team Fortress, UFO, Heroes, Final Fantasy, Diablo, Mech Commander, DOTa, etc, you will notice that there's a wide spectrum of characters and classes with their unique abilities and skill sets. One class just can't have it all. And every character has their own set of strengths and weaknesses.

If you're an archer, you attack and kill from afar. You don't go all out rambo knockin' on the enemy's front door! You play what's given to you and use it to your advantage. So act your class if you want to survive and stay in the game. If you feel the need to pet that darned tiger on the head before you kill it, switch to an assassin or a character that can take extreme punishment.

If you're a tsupitero, handling and growing a port that has 500k is easier than a port that has 2M. The bigger the port, the harder it is for the tsupitero.

If you're a trend follower, you'll probably have no issues with handling a 10M port, But it wouldn't be easy growing it performance wise as opposed to the tsuptiero.

If you are handling a sleeper port, you need to have extreme patience to endure the times when you see other stocks moving while your's are sleeping.

It's all about balancing volume, technique and the mind.

The most lethal thing a trader can do is to act the trader that they are not.

When you come to a deep level of understanding of who you are as a person, as a trader - your strengths and weaknesses, and put this into your advantage when you enter the markets, you'll be surprised of what you can do.

Port Snapshot as of 2.23.2016 Lunchbreak

Do not try to be someone who you are not. Embrace who you are. 

The 9 Alignments of Traders

Too lazy to make an introduction. 

As the title suggests.... oh just read the title will ya? 

Alright, let's start: 

# 1

These guys are everywhere. In forums and other social media. Sometimes you just wonder if their kindness is for real or not. But be wary though, not all of them are good for you. While most of them have a good heart, only a few actually know what they are doing.

AKA Gurus, Master Ginyos.

LAWFUL GOOD

"Bring enlightenment to all traders, I come."

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# 2

You should definitely get a few of these people as allies. They love spreading truth and honest to goodness analysis - no matter how bad it is. They practically do the homework you're supposed to do.

NEUTRAL GOOD

"Fear not uninformed citizen! I shall impart my 

knowledge of the good and evil of the company."

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# 3

This is the majority of the people you meet. They want to profit as much as you do and they want it now! They party together, cry together, be 'ipit' together. Oh you know what I mean. 

Hanging out with these groups for longer periods can be dangerous to your trading style. So 'hang' in moderation.

CHAOTIC GOOD

"Together we shall draw the charts 

and make everybody happy hearts."

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# 4

This group of traders are usually the lonely, misunderstood players in the markets. Slow, boring, and tend to explain things in a very technical way - as if listening to some mysterious ancient  language.

LAWFUL NEUTRAL

"The only Friend i have is the Trend."

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# 5

I'm sure you've encountered at least one trader who is like this. That one trader who seems to know everything and yet doesn't give you a damn straight answer. 

TRUE NEUTRAL

"The collective prohibits me to give any feedback on your stock."

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# 6

"How the hell are you supposed to profit when everything is red?"

Oh these guys know the answer to that. They love it when everything and everyone is in pain; 

you might even hear their sadistic laughs if you listen hard enough.

CHAOTIC NEUTRAL

"Let there be blood on the streets! #Permabear #Gigols"

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# 7

You MIGHT have already met this exclusive group of basterds. They have enough buying power to control a few to several stocks. Oh how you wish you could be part of this group. But then again, once you're IN, you can never get OUT. Be very careful.

LAWFUL EVIL

"Are you talking to ME?
We shall bring order in the markets! 

Call the crew! Let's jock this B#&!!"

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# 8

Traders turning sadists with tons of buying power or shares - just waiting for the right time to short and unleash the evil they have amassed. Can't blame them though, they earned it. This group originally comes from all the "Neutrals" we mentioned above. And after selling, they love looking back at their work and say "I Told You So."

NEUTRAL EVIL

"There is a natural order in every stock cycle. 

And the current cycle is death!"

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# 9

If there was a crystal for evil of the purest form, this group would be it. They just want to watch the world burn. And if they would be given the chance to sell odd lots to everyone, oh they would!

Don't worry. They have a special place in hell.

CHAOTIC EVIL

"The stock did a break out I hear? 

Let me sell a couple of millions for entertainment."

So which Alignment do YOU have?