Being a trader (which I shall call Market Hacker for this subject) is not easy, you need to know the ins and outs of the system and you can never become one (Black or White) if you blind yourself from the reality (that there is a battle going on with Traders vs. Traders and worst... Humans vs. Machines). Add the fact that both sides are now use trading bots with powerful connections to the market (high frequency trading), they can pump and dump the market on opening and last price to confuse any trader whether trading for the shorter or longer term.
I would recommend first that you read my previous blogs (although not necessary for this topic)
What is a system and what is it "not to hack"?
A system, just like your operating system, a computer game, business process, etc. runs on rules! example is a rule in society that says "No Jaywalking". In a world where everybody follows the rules, it is so much fun right? wrong! because turns out someone got ahead of other people by jaywalking! they got around 20% faster and became more productive as a result. they got the promotions for being always ahead of others and not sweat staying in the sun's direction. Upon learning the technique, the law-abiding population at a rate of 10% per day switched to becoming violators as the risk-reward becomes more enticing.
Have you played a new game that just got released for P3,000 and is now available on steam? oh you got yours for P200 only in Divisoria? complete with cheat codes? Awesome! you are also a hacker because you just hacked thru the system wherein a good citizen is expected to buy original products which supports the developer's hard work. Yet, you did not and even proudly explain "What idiot would pay these stupid developers for something they work hard for years" right?
So! who has never violated a rule or two raise your hand! :D obviously none... Here is the simplest way to define a hacker in the terms of a System Engineer like myself... Whenever you bypass and violate a system's rules for how it is normally expected to work, you are already hacking and exploiting weaknesses in the system!
The Stock Market's System
It has a very simple purpose... to trade shares of companies whose worth is based on its fundamentals. If a company's Assets are growing, its share value grows with it! if the Assets are declining and business is dying, its prices obviously fall (at a well formulated price). This is because the stock prices have a simple formula of how the company is performing (growth rate, earnings, etc.). The rule is you use the fundamentals to see if one is overpriced or cheap, has potential growth or declining, has sound leadership or corrupted, and so on. and with that, The rule is "Invest on good companies and sell the bad ones based on their financial scorecards". With fundamentals, the market is sensible and more predictable.
But something happened along the way such that fundamentalists are being killed by the increasing breed of "violators". The lazy generation and the availability of stock trading has given the rise to "Stock Trading" and when I say trading I mean it. You are not an investor, but a merchant who buys low and sells high based off market demand. But that is not where the true hacking is of course! Eventually everyone has to buy something and sell something when the time is right. Market hackers however aim for compounding their wins by following trend cycles. As cycles happen every day, week or month, market hackers have their eyes fixed on the monitors (or bots) and are ready to trigger on their signals.
This is why the market becomes more and more volatile as the number of traders increase who uses different techniques outwitting each other.
Traders are not limited to people who work on a job and trade the markets which are the majority. But you should never worry about those guys, those are C-class Market Hackers. What you need to worry are the big guns. There are bigger hackers at play like the NEWS Media outlets, The brokers (who knows or controls your orders and can use the volume to manipulate the market), The Guru's and Experts who profit more on the advice than their stock trades and of course the Companies themselves who are free to do insider trading with no repercussion (specially in the Philippines). So if you have not read that article yet, please click here.
Know your enemy's disaster level
“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”
― The Art of War
- Wolf (Outsiders like you and me)
- Tiger (Gurus, Fake news propagator, Fake trading group admins)
- Demon (App and Platform owners, they monitor and learn your trades along with others and can use them for their advantage.Worst the apps could have viruses on them)
- Dragon - (Big Companies doing insider trading and uses their media extension to cause market turbulence)
- God - (Big Financial Institutions who can pump volume in a market)
ASTRA aims to help White Hat Hackers
So then why is ASTRA reading trends and much like similar market tools made available, rely on trends and not fundamentals. Well, because ASTRA believes this is the "new normal". It is not that fundamentals are totally dead! that is for us to utilize and it is used to support your stand on your investment! ASTRA is just focused on trade behavior analysis and shares it to us so we can get a sense on how the market is trending. It believes the market is rigged because it aims to learn, visualize and expose incidents of potential market manipulation so others can avoid these traps.
We who are part of developing it are also victims of these traps before and this is why we made ASTRA to help others learn and avoid them in the future. We share this freely as it may help you guys in your trading journey. Whether it helps you or not, remember that "In stocks you should never blame anyone or anything! because at the end of the day, it is you who pulled the trigger"
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