Friday, June 13, 2008
What makes a Market?
A buyer and a seller is what makes a market. If I've got it, and you need it or if you've got it and I need it. Market prices come down to supply and demand. If I've got it and you need it we will eventually settle on a price no matter how wide the spread at the beginning of our negotiations. This is where liquidity comes into play. If the commodity or equity has fewer participants then the spread is likely to be wide versus many suppliers and many buyers whereas the spread will be tight. If you are a newbie, keep this in mind. Start out trading only very liquid, high volume stocks or ETF's. If you want to stay with this game, take a look at something like the SPY or the QQQQ's and just learn how to trade one of those two markets. Then once you get really good at that you may want to add a little leverage by trading the profunds or futures. Keep watching page 1 and 2 and the first 5 charts on page 4 @http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID763084. All time frames monthly,weekly,daily,60 minute and 1minute charts are telling me to be short the S&P 500 right now. I'm still flat the market since coming back from vacation, but for some reason my gut tells me to keep my powder dry and only enter this market to the long side one time frame at a time. 20% increments. One fifth of my funds for each time frame. BE PATIENT! If all the big shots are having to de-leverage, where is that money going to go to work? Maybe the Spyder's and the Q's. I think this is why Buffet made a safe BET ...........
Labels: Nasdaq 100, sp500, trading desk
Subscribe to Posts [Atom]
Subscribe in a reader
