The Motion Of The Market.The movement of large blocks of shares concentrated in the hands of a few can cause large swings of greater or lessor amounts. Many traders may choose not to be left, too far behind the leader, fearing a separation from the flow of money.
Some mechanism used by the controlling block, a computer generated model, some sophisticated formula or some special intuitive insight, perhaps gained by endless days of constant trading, decides the direction of the day's trade.
The model must work or it wouldn't be used. As well, it must be clever enough so that the bulk of the 'flock' can't figure it out.
They just follow and lose more capital. The objective is to make more capital by taking some of the money away from these losers.
A few lucky followers with some insight, similar to that of the leader, get some of the crumbs that are left behind. Many of the other followers, lose their money over time and end up poor.
Is it also stealing if you choose to follow such a thief, much too closely?
Or is just is it just luck when you don't get robbed yourself?
Monday will be a better day if the model suggests that it will!
Happy trading!
All the best, Java