I am reading a fantastic book on buying and selling, initial published in 1924, by Richard D. Wyckoff, titled &quotHow I Trade and Invest in Stocks &#038 Bonds&quot. Although most of the examples in the book pertain to stocks, the insights into the nature of buying and selling are related no matter what instrument you select to trade.

I am particularly drawn to the authors’ appreciation of the ebb and flow nature of markets and how this perspective can be utilized to fantastic impact.

&quotIt is difficult to over-emphasize the significance of studying the technical place, particularly when generating a speculative dedication. Many individuals might say, &quotWhat is a weak or a powerful technical place?&quot My reply is, in short, that a stock is in a weak technical place on the bull side when it has been purchased and is held by a big quantity of outside speculators when most of these are searching for a profit when the cost of the stock has advanced to a point where no further purchasing can be stimulated for the time becoming. It stands to cause that when purchasing energy is exhausted a stock should decline, no matter how powerful its finances, management or earning energy.&quot

&quotOn the other hand, a stock is in a weak technical place on the brief side when the bears have exhausted their ammunition by selling all they can find the money for and when the purchasing energy of investment and speculative purchasers is such that it resists the stress of the bears in other words, when need overcomes supply. The weakness in such a place is discovered in the fact that all these who are brief are potential bulls they should, faster or later on, cover their commitments in order to near their trades. They do not want to remain brief indefinitely.&quot?. &quotBears, following they have sold brief are an component of power, not of weakness.&quot

Maybe the nature of all markets is greatest described by the Chinese Yin Yang symbol.

In every bull move, and in every bear decline, are the seeds of their own destruction.

Malcolm Robinson
LIFFE Pit Trader &#038 Digital Trader
InstinctiveTrader.com