Teaching You to Trade Stocks 2: There Are No Market Makers — Only Winners and Losers!
2006/6/7 22:41:27
The creature known as the "market maker" is very mysterious to most people, but to this ID, it's utterly mundane. This binary opposition between market makers and retail investors probably fits well with the modern Chinese mindset, which is why it has become such common knowledge. But common knowledge is often just a synonym for shared delusion — and not only so-called retail investors, but many so-called market makers themselves have perished within it.
In the typical definition, a so-called market maker is someone who wields massive capital and can control a stock's movement. In the mythology of market makers, they are described as omnipotent — able to transcend technical indicators, surpass fundamentals, and of course the broader market trend is nothing to them either. And we're only talking about market makers for individual stocks here. As for national-level market makers, they become the god of the so-called retail investor. Rumors about these market-maker gods never cease for even a second in the market, constituting the propagation of commonly held delusions.
But these so-called market makers, one after another charging forward, their bones have long piled into mountains. Just a few days ago at a private gathering, I ran into an old uncle from the 1950s generation who said he had prepared two billion yuan and wanted to be a market maker, asking this ID to contact the head of such-and-such company. The man was someone of status and reputation, and not wanting to humiliate him publicly, I mocked him afterward in private. His brain was simply rusted shut.
Of course, even though the mythology of market makers has become such common knowledge, this kind of fool has always been, and will continue to be, charging forward one after another. And precisely because there are so many such fools, the hunters have a bountiful harvest. The more someone puts on the airs of a market maker, the happier the hunters are — because this type basically gets ground to nothing after a few years in the market.
The market has no such thing as market makers — only winners and losers! There are only various types of animals, and an extremely small number of skilled hunters. The market is a hunting game. When you only have a small bow and arrow, you can hunt rabbits. When you have the Dragon-Slaying Saber, catching a few snakes for fun is obviously beneath you — the key is whether you have the Dragon-Slaying Saber!
(To be continued)
Replies
股盲 2007-09-22 22:04:29
000008 is the legendary Yian Technology — a lifelong pain for those standing guard on the frigid mountaintop.
石猴 2007-09-04 22:23:28
Looking at the header image 000008 — what kind of stock is this? The adjusted price actually reached 126 at its peak, shooting from 8 yuan to 120 in a single year in '99, then crashing back to 20 in a single year in 2000. Especially in January 2001, it plummeted from 50 to 20. Hard to imagine how many people were tormented during those two years. There might still be people holding the bag now. Brutal. The market maker must have died a horrible death too.
Drawing stroke analysis on the monthly chart, historical bottoms are actually very easy to find, and the daily chart divergence is also very clear. Impressive (Little Chan's theory is impressive). If interested, you can check out my blog for the daily chart segment analysis.