A variant of the proof of the first axiom of Dow - page 4
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2. Any other information, in a market mechanism, is derived from the Price and why re-count them? It is only misleading. Comprehensively analysing the Price is another matter.
Comprehensively research the market, the people who trade. To look at what is happening through streams of diverse data and to make your own predictions. That is how I see trading. You cannot understand many things that have happened and are still happening in the market, just with the price and its history. Alas...
People trade in the market and the market gives a verdict in the form of a price, taking into account all their efforts, and it is almost impossible for traders to take them into account again.
The market is the people, Yusuf.
It is the people, not the mythical market, who move the price. They are the ones who raise or lower it by their actions. Price is formed as a result of the actions of the crowd at any given time. Of course, there are market makers - that is, those who have the greatest influence on price movements at certain moments - but it is still people. Even robots have people behind them. So, there is no market, on its own.
You have to predict people's actions. Their intentions and aspirations. And look at the data, which can tell a lot about people's actions. That's why I'm all for getting a variety of data. To see what people in the market have done and are doing. Then I will have a better understanding of what they will soon be doing next.
When are you going to prove the second axiom of the Dow?)
The market is the people, Yusuf.
It is the people, not the mythical market, who move the price. They are the ones who raise or lower it by their actions. Price is formed as a result of the actions of the crowd at any given time. Of course, there are market makers - that is, those who have the greatest influence on price movements at certain moments - but it is still people. Even robots have people behind them. So, there is no market, on its own.
You have to predict people's actions. Their intentions and aspirations. And look at the data, which can tell a lot about people's actions. That's why I'm all for getting a variety of data. To see what people in the market have been doing and are doing now. Then I will have a better understanding of what they will soon be doing next.
When are you going to prove the second axiom of the Dow?)
There are mostly banks, investment funds and other big players in the market who do not reveal their intentions and there are millions of them, how are you going to account for them?
Calculate from a variety of data. Banks are people too, the only difference is the volume available to the trader and his strategy. So it does not matter who moves the price. It is important what volume and strategy he has.
Banks are forced to trade to align and optimise their currency portfolio in order to minimise possible losses in the event of unexpected declines in the quotation of any currency, as well as the execution of their clients' orders in any currency. Our banks are not allowed to trade in the market for commercial purposes.
With heroic effort and at the cost of four pages you have shown that the profit of a manufacturing company depends on the price of the goods it produces and sells.
Theoretically, you could go even further and "prove" that a brokerage company's profits depend on the price movements of the assets it trades.
What's next?
Where is the promised "proof of the Dow axiom"?