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Additional notes to be read in conjunction with level 1 lesson 2

Foundation Principles in Understanding the Market

Most people when they play the market do so with the assumption of repeatingpatterns of price movement as they are represented on a chart From thisperspective price is said to be going up or the price is said to be going down or

going sideways !hat becomes obvious is that price moves in what appears tobe repeating patterns when put on a price chart "ecause of this most tradersbase their trading decisions on #$%$"&' patterns on them $ have no argumentthat this %''M% to be the wise thing to do( and that it %''M% plausible thatbecause of the repeating nature of the chart patterns( that they can be used as atool to predict the market

%cientists look out at nature and find regularities in it so that they can predictresults )hey can do this because nature contains fi*ed laws that can be reliedon and can be used as a sound basis for future predictions $t APP'A+% that thesun goes around the earth but the +'A&$), which is not #$%$"&' is that the

earth goes around the sun For years human beings believed that the sun wentaround the earth( "'-AU%' it APP'A+'. that way

!hen we look at the market it appears that the price goes up and downaccording to the laws of simple supply and demand that becomes #$%$"&' onprice charts as patterns that are an objective indicator of this supply and

demand

!hat $ am suggesting to you is that the markets do

not move by the simple laws of supply and demandbut rather on the expectationsof future price( heldcollectively by everyone active in the market Andfurther( $ contend( that this e*pectation is manipulated

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by the people who make the market and it is thismental manipulation that mainly determines the riseand fall of the prices not the laws of supply anddemand

"ecause of this $ see price charts as a visible e*pression of manipulated beliefsconcerning future price And when $ am looking at a chart $ read it from thisperspective $f a price chart is read in the normal way it is simply becomes a toolused by the market makers to manipulate your e*pectations as to what the futureprice is likely to be +emember when the market makers have set themselves upto profit from an increase in prices( they need the market to start rising in orderfor them to make money on the rising prices )hey have to get lots of traders tobelieve that buying is good $f the marker makers have set themselves up forlower prices( they need the market to start falling in order for them to makemoney on the falling prices )hey have to get lots of traders to believe that selling

is good

,ou can see then that these market makers work behind the scenes engaging inrepeating cycles of manipulation which involve a setup and an e*ecution )he setup phaseconsists in the market makers putting themselves in a good position tomake money on a strong upward movement of price or a strong downwardmovement of price )he execution phase is the collective manipulation of thee*pectation of future price so that there will be heavy selling or buying in thedirection that the market makers want

)he market makers cycle of manipulation consists of

a %et Up Phase and an '*ecution Phase !e tradethis cycle( not the charts based on price

My method of reading the charts reveals when the set up phase is happeningand more importantly reveals the emergence of intensity of belief about future

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price that always occurs at the beginning of the e*ecution stage )hen $ knowwhether to buy or sell because $ know the direction the market makers are

manipulating the market in order to take their profits %o $ make my profit byfollowing the market makers cycles of manipulation( which consists of a set upand an e*ecution $ use charts /0&, to see this cycle because this is the onlyway $ can make pips on a consistent basis

-atch up with you soon

Martin -ole

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