Originally Posted by WamoIf I understand things correctly, you need to identify the currently perceived fundamental value, then recognize the false move you have described which baits all the uninformed retail traders, and then trade back in the direction of the fundamental value. All of this can be seen on a naked price chart.
Retail traders don’t really move the market most of the time. False moves against fundamental values can even bait semi-informed professional traders. Sometimes they can bait even informed traders if certain market participants have goals unrelated to fundamental values, and are willing to risk capital to achieve objectives within a certain time frame, before the overwhelming amount of fundamental value order flow can catch up with them.
I don’t want to make things too complicated, but there are so many possibilities.
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Fundamental Value and Informed Traders,
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