The primary tactic institutional investors don't want retail traders to know involves two key characteristics before they exit the market.
First, they always sell off at a high position after a continuous surge. The initial characteristic is a high position with increased volume or a sharp opening higher, followed by significant fluctuations, indicating minimal rise—referred to as large-volume self-inflation. This attracts many follow-up orders, allowing them to sell at good prices. However, they can't sell all their holdings at once like retail investors.
So, they create high-level fluctuations, rising and falling, to give the illusion they are accumulating, attracting retail investors to buy in. For example, they may rise and fall in one day, sell a batch, drop sharply the next morning, then rise in the afternoon, creating the illusion of stability. This repeated pattern causes retail investors to increase their positions, allowing the main force to sell off smoothly.
The second characteristic is more complex and difficult to understand: "the stronger the top." It seems counterintuitive, but institutional investors must maintain a strong price to instill confidence in retail investors while selling off. They can’t let retail investors sell first, or they’ll miss the high prices. They create new highs to stimulate retail interest, causing the trend to feel strong. This appears in technical indicators as divergence after shock or adjustment and then a new high.
Understanding this can put you ahead of 99% of retail investors.
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