The Parable of Uncle Joe - How the Stock Market Really Works.

We've just published a new T2W article called "The Parable of Uncle Joe - How the Stock Market Really Works." by Anna Coulling.

Quick Summary: Uncle Joe widget factory does good business until a rival company set up in the neighbourhood selling cheaper widgets. Then no-one wants widgets anymore and there is a glut on the market. So what should he do?

PS. Don't forget to rate the article after you've read it and share your comments on this thread.

A follow up Article please, on how to know what the Market Makers are thinking / are there any Tech indicators to give us a clue to the M/M thoughts ?

The best indicator to use for establishing market makers true intentions is volume spread analysis. Have a look on my website: www.making-bread.co.uk which explains this in more detail and am currently developing a separate site devoted to this topic.

In essence the only activity that market makers cannot hide is volume. If you understand how the markets work you can use this volume analysis coupled with the associated price movement in the candle bar to forecast future price movements.

A quick example if you see a wide spread upbar with little or no volume then clearly this is a trap up move by the market makers. Very simple, really.

Access to level 2 data is also contributing to greater transparency but in my opinion should not be used until the basics have been mastered.

Possibly, but with respect, nothing is ever ' clearly' or 'simply' anything in the markets.

Your example doesn't mention the importance of where the Close sits on that up bar. If the Close it toward the low of the bar, then there is a strong possibility of a fake out. And it is little to no relative volume within the context of previous volume.

As you're in the chair, what could a wide spread upbar with Close toward the top of the bar on relatively little to no volume indicate?

I'll provide my answer by PM to anyone who wants to know, but I'd like to make sure Anna gets a crack.


edit: Nice looking site. And your t2w published article has a hint of Uncle Aleph about it...LOL

Very lightweight article, not sure if that is what T2W tell you to write..... Felt a bit like reading the Sun compared to reading the Times.

Also, (and no offence intended) you need to do some reading on web site design. I'm sure you have some good information on your site, but it is not going to reach your audience without a better designed presence.

JDR - I believe Anna's site is designed specifically to appeal to women and more especially, to those who are not currently traders. I thought the aesthetic appeal was there.

As for the article, as I commented above, hints of Uncle Aleph - which I like very much.

Each to their own I guess. Dont want to hi-jack this thread with web site design discussions.

A good article for newbies. I like the analogy of Uncle Joe's business to that of market makers.