The Magic Hand

Recently, this term of “Magic Hands” is heard really often… I wonder why is it so often heard these days? “Magic Hand” or “Operator” has been there since the beginning of stock market and has been continuing since then. So, why now? Is it because it is like some fashion that has been popularized by some model? Hmm…. Maybe, or I guess might be because of a few reasons; 1) Timing 2) Easy to accept.

Timing:
Why do I say it is timing? One, it is believed that the upcoming and ongoing elections have its effect… It is believed that the government is behind and supporting the KLCI.
Two, recent price movements of KLCI. It is believed that the massive price movements recently is due to the supposed to come corrections are supported by the “Magic Hand” or the government. How true is this? I don’t know… But I will give my views later.

Easy to accept:
Why do I say it is easy to accept? It is because we have been in a community where we believe that the stock market is like a gambling place and it is controlled by the “Big Boys”, so small potatoes like most of the people only go to gamble their luck. With this mentality in mind, of course people will subscribe to the believe that the “Magic Hand” controls all the movement of the market.

My views:
Now, I will give you my opinion, but of course just my comment. I’m not saying I am definitely right. But maybe just for reference. As I have said, I fully believe that the so called “Magic Hand” or “Operator’ exists, but they have been here all these while, so there is nothing new about it and we need not get too paranoid with it. Very often these days when the KLCI goes up, we hear people saying the “Magic Hand” is doing its work, the KLCI goes down a bit, we hear people saying “Magic Hand” tired. But I believe the right thing and the right perception should be the same as before, the KLCI is up because buyers are buying and it goes down because the sellers are overwhelming the buyers. Isn't this the correct approach towards the stock market? An even more interesting phenomenon is that whenever the KLCI shoots up at the end of the day’s trading session, people will say it is the work of the “Magic Hand”. Well, maybe it is, but it is also very common for heavy buying at the end of the day. This can be read in “Trading For A living” by Dr. Alexander Elder.

The question now is, why are we so fascinated by this “Magic Hand”? Maybe it is because by believing that the movement of price is all controlled and fully manipulated, we need not learn anymore, because no matter how we learn, the price is beyond our understanding because they are controlled by something else. But HELLO! Since the work of operators are here all these while, and if you really put the effort into learning Technical Analysis (TA) properly, you would understand that the work of these so called “Magic Hand” is all written in the charts as any abnormal price movements will be plotted down as charts. Of course you can argue by saying that they will manipulate the charts to trick those TA believers. This is true, which is why we have a thing called cut loss in TA as a countermeasure.

We need to set our mentalities right to survive in the stock market. One, please wake up! Almost 95% of us are not stock operators and we would not get any information into how they work and how they plan to work. Thus we should not go into speculating. And we need not care about how they manipulate the price. Since we are here to make money, why don’t we concentrate on how to use their activity to make money? In order to do this, there is no such thing as a short cut. You will have to LEARN and READ. As I have mentioned, people take shortcuts by believing in “Magic Hand” because they would like to believe there is nothing they can do to predict their actions. So please, think again. TA may not be able to predict their actions, but they are are most accurate method to track their action that is readily available to the public (Who Are Willing To Learn).

It is always true that government tries their best to prevent their people from being too superstitious and believing only in the supernatural because this will stop the people from exploring into other means like science. Which means the country will not be developing. There is nothing wrong to ponder about their existence, but lets not get too carried away.

I know this piece of posting will offend a lot of people, but please… All I want is to give a wake up call to the readers. And it is to the benefit of the readers, not mine. So please do take some time to ponder over this. We are not operators, and we cannot see things through their perspective. All we can is to try to move along with their actions and effects through a method called Technical Analysis. Please do pick up a good TA book and read it To Understand. Please don’t just read to finish, get into the basis of how the method is derived. Please…. I do not want to see my dear friends to succumb into the mystic world and forget that they are living in a real world of science and art any analysis…