The average retail trader seemingly has no chance and gets whipped in and out of trades as the policy makers, large institutional investors, hedge funds and analysts move the markets to their favor.  There are always market participants that are in the know and get in and out ahead of the moves.

Jim Cramer, Mad Money host, admitted to manipulating markets when he was a hedge fund manager through releasing inaccurate news that allowed him to enter/exit positions to his favor.  If you don’t believe this occurs, then I would suggest that you are naïve.  One only needs to look at sentiment indicators such as option open interest and volume ahead of large stock moves and more often than not it is a precursor to a move.  How did they know?  At turns in the market, astute retail traders can see on candlestick charts massive down thrusts (distribution) on volume that is more often than not initiated by “smart money” so that they can shake weak holders out of the market to get better long position entries.  You can also see up thrusts (accumulation) on volume, selling to late buyers in a “suckers rally” to get the best exit prices only to see that market reverse with the uninformed retail trader left holding the bag.

I am going to suggest three ideas for you to consider in order to help you combat the wall street shenanigans.  1)  Do not trade without hedging your positions.  You can then learn to trade directionally hedged inside of strategies like collars and reverse collars.  2)  Learn to read candlestick charts with volume analysis.  This will help you spot when the “smart money” is trying to take advantage of you through manipulating the market.  3)  Let the “Big Money” do what they are going to do.  Look for major trends and get the “Belly” of the move and follow the trend.  That way, you are less likely to be hurt at the bottom or suckered at the top of a trend. 

Come visit us at www.marketamer.com and learn how to trade.  Best, Robin

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