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12/12/2011

How to trade in a market controlled by big funds

I am not going to reinvent trading methodologies to make money in the stock market. Many will still advise clients to buy low sell high, to follow charts, to follow all kinds of formula to make big profits in the stock market. People who still believe in these methodologies are still living in the dark ages.

The stock markets today are no longer the stock markets of yester years. Stock markets today are infested by big funds with super computers to monitor every trade, to play against every investor, and take the best computed positions against them, to come out the winner. Someone says it is like playing against Robocop. How many can beat the Robocop? Why are they allowed to do it is a different story, a story of ethics and morality.

Many are still following faithfully and religiously on their sure win methodology and game plan and still losing. When they think it is time to enter the market, when they think the price is low, they were wrong. Confirm, double confirm. The price would go lower. Sometimes they may make a bid or two and think their methodology is right. They did not know that at those moments, the computer was biting on other bigger gains and they happened to be on the side of the computer.

They are still some syndicate plays that are making good money. These are the real winners with the right methodology, which they would not disclose to anyone. Trade secrets or whatever, there are small pockets of winners in this new game. Other than them and Robocops, the rest are condemned to be losers.

Anyone still day dreaming of beating the Robocop and his super computers with his grand plans and grand strategies? Please, remove your blinkers. The only method to be on the winning side is to know what the computers are doing and be on the side of the computers.

An equivalent example of the game so far is the 4D run by the Tote Board. By sheer odds, the operator is likely to make a certain profit. What if the operator uses the data available in his computer on who bets on what and how much will be the payout of each number? And with the super computer, the operator decides which number to open for maximum profit instead of the current method of pure chance. The Tote Board even go to the extent of ensuring that there is no cheating, that pure chance is truly pure chance, no one allowed to use his computer to his advantage.

See the difference?

1 comment:

agongkia said...

Hehe..Should consult the MSN's Lijiang emperor.I sense both of you can give good advise on what to buy.
Not in Lijiang now but he likely has his eye glued to the screen on stocks.
That's why he got no time here.

Your last para reminded me of Chap Ji Kee.Going by your logic,I may have to change my tactic of buying my favourite numbers.
Maybe I can start trying to buy the number of the size of my mei mei's undies perhap.Rare number got more chance?