An oscillation is normal after a largish price move. The pendulum always swings too far and traders recognize it. They place orders to take advantage of the folks who overshot the target. An equilibrium is reached and the general trend of the market usually resumes.
The bot traffic seems to be reinforcing the damping effect and the operators seem to be positioning their orders to take advantage of the unwary.
But what do I know?
I cannot say how much I agreeThe bot traffic seems to be reinforcing the damping effect and the operators seem to be positioning their orders to take advantage of the unwary.
But what do I know?
Nice explanation macsga! Hey, I just got in line with the physics guy. Cool. I like the string theory stuff.
Back to business:
If my idea is correct, I witnessed one of the operators make ~64k USD in about half an hour. His bots dampened the oscillations downward then made three buys, igniting green candles for the first time in a while. When the sheep got on board with the upswing, he sold in four batches at very near the top.
Who knows. I love a good conspiracy theory.
Thats why i've been saying TA is a self-fullfilled prophecy.... the more ppl use it talk about it the more "real" it become and thus.... manipulator will skin you....
If i want TA trolls, i would be on Elitetrader forums.....a heaven for TA charts and future predictions.
