Additional notes to be read in conjunction with level 1 lesson 2

Foundation Principles in Understanding the Market

Most people when they play the market do so with the assumption of repeating
patterns of price movement as they are represented on a chart From this
perspective price is said to be going up or the price is said to be going down or
going sideways !hat becomes obvious is that price moves in what appears to
be repeating patterns when put on a price chart "ecause of this most traders
base their trading decisions on #$%$"&' patterns on them $ have no argument
that this %''M% to be the wise thing to do( and that it %''M% plausible that
because of the repeating nature of the chart patterns( that they can be used as a
tool to predict the market
%cientists look out at nature and find regularities in it so that they can predict
results )hey can do this because nature contains fi*ed laws that can be relied
on and can be used as a sound basis for future predictions $t APP'A+% that the
sun goes around the earth but the +'A&$), which is not #$%$"&' is that the
earth goes around the sun For years human beings believed that the sun went
around the earth( "'-AU%' it APP'A+'. that way
!hen we look at the market it appears that the price goes up and down
according to the laws of simple supply and demand that becomes #$%$"&' on
price charts as patterns that are an objective indicator of this supply and
demand
!hat $ am suggesting to you is that the markets do
not move by the simple laws of supply and demand
but rather on the expectations of future price( held
collectively by everyone active in the market And
further( $ contend( that this e*pectation is manipulated
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by the people who make the market and it is this
mental manipulation that mainly determines the rise
and fall of the prices not the laws of supply and
demand
"ecause of this $ see price charts as a visible e*pression of manipulated beliefs
concerning future price And when $ am looking at a chart $ read it from this
perspective $f a price chart is read in the normal way it is simply becomes a tool
used by the market makers to manipulate your e*pectations as to what the future
price is likely to be +emember when the market makers have set themselves up
to profit from an increase in prices( they need the market to start rising in order
for them to make money on the rising prices )hey have to get lots of traders to
believe that buying is good $f the marker makers have set themselves up for
lower prices( they need the market to start falling in order for them to make
money on the falling prices )hey have to get lots of traders to believe that selling
is good
,ou can see then that these market makers work behind the scenes engaging in
repeating cycles of manipulation which involve a setup and an e*ecution )he set
up phase consists in the market makers putting themselves in a good position to
make money on a strong upward movement of price or a strong downward
movement of price )he execution phase is the collective manipulation of the
e*pectation of future price so that there will be heavy selling or buying in the
direction that the market makers want
)he market makers cycle of manipulation consists of
a %et Up Phase and an '*ecution Phase !e trade
this cycle( not the charts based on price
My method of reading the charts reveals when the set up phase is happening
and more importantly reveals the emergence of intensity of belief about future
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price that always occurs at the beginning of the e*ecution stage )hen $ know
whether to buy or sell because $ know the direction the market makers are
manipulating the market in order to take their profits %o $ make my profit by
following the market makers cycles of manipulation( which consists of a set up
and an e*ecution $ use charts /0&, to see this cycle because this is the only
way $ can make pips on a consistent basis
-atch up with you soon
Martin -ole

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