Barkerville Gold Mns Ltd BGMZF

For New Traders

[Roxy10]

The stock market is a forum for debate between buyers and sellers on the values of companies. That is the nice explanation. The reality is that the stock market is a war between buyers and sellers, who each want to take the others money. The stock market is rough, and if you don't approach it with the disposition of an irritated general, you will lose. In the stock market, nice guys finish last.
Sun Tzu's, The Art of War serves to highlight many aspects of trading, since trading the market is much like warfare. Here are some quotes from the book, and their application in trading:
"All warfare is based on deception."
Suppose you are a large hedge fund, and you want to accumulate a stock. You know that taking a sizeable position will move the stock higher, and you will end up paying higher prices as day traders jump in to the frenzy. With shares on the books already, you can afford to sell a little bit and paint the chart with a negative technical set up that should entice some selling pressure from nervous retail investors and overzealous short sellers. That selling pressure will help you fill your larger buy order.
You may also bring your buying in phases. Let the stock fall back and trigger stops, shake out nervous investors and free up stock to build the position. You may post fake orders in the Level 2 screen to make traders believe that there are large sellers and add further worry among the uncommitted buyers.