PVSRA trading strategy. Part 2. How the market really works
PVSRA trading strategy. Part 1. Introduction
After reading the first part about PVSRA trading strategyyou may be a little confused. That's normal. In the second article we will look at the whole background of the market. The main secret is that the market can neither be mathematically calculated nor described with the help of simple logic. That is why even the most advanced mathematicians of our time have not been able to unravel the essence of the market.
Logic is the sister of math, and it is also impossible to understand the market only through it. Have you ever watched a child trying to put a puzzle together for the first time? Have you ever noticed that with time he starts to put together more and more complicated pictures? The same is true for the market. Studying PVSRA trading strategy is somewhat similar to putting a puzzle together. Over time, our subconscious mind accumulates more and more different patterns and situations, and we begin to read the market better and anticipate plans better market makers. In general, working on PVSRA strategy is a real art, where math and logic are not even close to each other.
How the market really works
Imagine this picture: a fast-riding rider on a horse with a cart with seated passengers attached behind him. Everything is happening somewhere high up in the mountains on a narrow winding road with a steep drop down on one side. The rider has a crazy look on his face, but at the same time a smile on his face. The horse also has a wild look and some white foam on the edges of his lips. The passengers in the cart are shaking with fear, because every minute they could be flying off into the abyss. In fact, in the market, it's about the same thing. The cart is the price, the market maker is the rider, and the passengers are the ordinary ones. Investors.
Do you understand what we are talking about? Market price does not depend on sellers and buyers and is not determined by supply and demand. The price depends entirely on market makers.
Market makers are vicious deceivers and manipulators
The market is the brainchild of a few banks that "create supply and demand". The market serves the commercial community while market makers clip coupons. Market makers opened the market to create favorable conditions for currency transactions. But their main goal is something else - to raise even more profits. Market makers move the price up and down, "creating a liquidity"They execute orders with "smart" and "dumb" money and pocket the commission from each trade. When there are orders above and below the current price, who do you think sets the price movement path so that all orders are executed? And since market makers know exactly how the price will move next, they open positions in the right direction and get additional profit.
To summarize:
- Market makers manipulate the price to attract silly money into the market against the price movement.
- Market makers manipulate the price to attract smart money in the direction of price movement, but it is too late because after a while the price starts moving in the opposite direction and stops are triggered.
Market makers have complete control over the price and effectively "leverage" other people's money to execute their own orders, after which the price moves in the right direction and the profit is locked in. On the other hand, such actions create market volatility and we just need to be on the right side.
In the third article we will look at the indicators used in the trading strategy PVSRAand examples of entry points.
Interesting conclusions. But, if profits depend so tightly on market makers rather than demand, it's worth picking the coolest of them all and monitoring their actions closely. There's a lot to learn there by developing a gut feeling.
Tens, maybe even hundreds of millions of traders closely follow the actions of market makers, and the result is known, 97% are out of luck. And each of them thinks that he is the smartest and is able to get into the remaining 3%.