The Yin And Yang and Ebb and Flow of Trading

I’m reading a fantastic book on trading, first published in 1924 by Richard D. Wyckoff, titled “How to operate and invest in stocks and bonds.” Although most of the examples in the book pertain to stocks, the ideas about the nature of the negotiation are important, no matter what instrument you choose to trade. I am particularly attracted by the appreciation of the authors of the nature of ebb and flow of the markets and how this perspective can be used to great effect. Pueblo “is hard to overstate the importance of studying the technical, especially when making a speculative commitment. Many may say,” What is a weakness or a strong technical position? “My answer is, in short, that an action is in a weak technical position in the upside when purchased and is in the hands of a large number of speculators from outside, when most of them are looking for a profit when the share price has advanced to a point where no more than the purchase can be stimulated by the moment.

Clearly, when the purchasing power of depletion of a stock must decrease, no matter how strong its finances, management or purchasing power. “” On the other hand, a stock is in a weak technical position on the short side when the bears have exhausted their ammunition from the sale of all who can pay and when the purchasing power of speculative and investment buyers is such that it resists pressure from the bears, in other words, when demand exceeds supply. The weakness of this position is in the fact that all those who are short bulls are possible, but must, sooner or later, the coverage of its commitments to close its operations. It is not a short time they want to remain indefinitely. ?. “Bears, after they have sold short are an element of strength, not weakness.” Perhaps the nature of all markets is best described by the Chinese Yin Yang symbol. Every movement of bulls, and every decline in bear, are the seeds of its own destruction.