What are your beliefs? What do you think drives markets?

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Old Aug 13, 2009, 10:57am   #25
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meanreversion started this thread Isn't supply and demand driven by sentiment? The ultimate end user will base his/her decisions not only on financial necessity, but also how they feel.
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Old Aug 13, 2009, 10:58am   #26
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meanreversion started this thread Or in other words, why do trends exist? Isn't a trend just the market manifestation of sentiment..?
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Old Aug 13, 2009, 11:07am   #27
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Trend = supply:demand

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Originally Posted by meanreversion View Post
Isn't supply and demand driven by sentiment? The ultimate end user will base his/her decisions not only on financial necessity, but also how they feel.
Depends... What if they base on just PA. Or are contrarian. Or fade moves because they have the resources. Supply demand ftw!
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Old Aug 13, 2009, 11:32am   #28
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Supply and demand depends on sentiment, if people feel positive they are willing to buy at a higher price cause they believe the price will move in the direction they want and sellers will hold out for a better price because they see the market moving in their direction. If the mood shifts negetive the buyers will want to try and pick up bargins/ pick the bottom and sellers become desperate and sell at any cost in fear of loosing to much of their profit or capital. So it is sentiment in the end that makes the market trend or consolidate at a certain price level in my opinion. And mind you it may not allways be rational as far as you could see and one can never really predict the market reaction to news.
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Old Aug 13, 2009, 11:35am   #29
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Supply and demand depends on sentiment, if people feel positive they are willing to buy at a higher price cause they believe the price will move in the direction they want and sellers will hold out for a better price because they see the market moving in their direction. If the mood shifts negetive the buyers will want to try and pick up bargins/ pick the bottom and sellers become desperate and sell at any cost in fear of loosing to much of their profit or capital. So it is sentiment in the end that makes the market trend or consolidate at a certain price level in my opinion. And mind you it may not allways be rational as far as you could see and one can never really predict the market reaction to news.
No


We've already established that market makers ease the transition of price from one area of high activity to another area where more volume is likely to move and provide liquidity to those who want to buy at whatever price as long as it fits into their scheme.

Plus you have to consider traders who just want to get a kickback from the exchange and they will move a serious amount of weight.

I suppose this will all differ from market to market though.
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Old Aug 13, 2009, 11:50am   #30
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I said supply and demand not buy/sell volume. As I said earlier there are many factors that can affect supply and demand.

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look at recent export (supply) and imports (demand) they are going up because people have destocked (supply) and are now getting new orders (demand) not because business is recovering especially but the world doesn't stop (supply and demand)...just an idea though.
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Old Aug 13, 2009, 12:10pm   #31
 
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Originally Posted by meanreversion View Post
Or in other words, why do trends exist? Isn't a trend just the market manifestation of sentiment..?

Markets, just like the weather, are driven by Chaos Theory. Initial conditions spark things off and pre-determine what comes later, and when - The Butterfly Effect. It all appears random but it's not.
This is how I have traded for years. It's hard work and difficult and can't be automated, but it's also totally spooky.
Indicators are useless most of the time. When you can see the next turn coming and look what indicators are saying, you realise that they mostly have no meaning other than being a rear-view mirror.
What people call sentiment, supply and demand, MM behaviour etc are just responses, not causes. The cause for a rally, reversal, gap, acceleration, or consolidation was determined way before it ever started, as was the actual time when it would start and end.
OK I'm sure this sounds like balony, and especially because I'm not about to explain how to do it. You'll just have to believe me and save yourself the effort of looking elsewhere..... or not :-)
I'm not saying this is the only way to trade, of course it isn't, and for those who have a successful method, stick to it, because this way is hard graft and ideally you need two people to do it, but it is what moves the markets.
Glenn
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Old Aug 13, 2009, 12:18pm   #32
 
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Originally Posted by cr6196 View Post
waste of time with you isn't it, read the whole thing first, the bit where i say it is obvious is supply and demand, whats the difference between demand and buying? I mean would you rather be right than have a clue what your talking about?
Ummm... I'm sorry but the difference between buying and demand is absolutely massive.
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