A absolute Chinese stock market speculate theory
To be an investor especially a speculator who must know how to compete with others, we should both deal with hundreds of operation every year, in market coupled with thousands of up to date news everyday and compete with other speculators which makes market like a game. The reason why Chinese speculators call it as chips theory, is partly in response to serious market manipulation that market is more like a casino ,partly because game theory foundation. Along with security price fluctuate in secondary market, different trading volume appears in different price section which is formed to different buying cost region on one stock.
However, when the stock price increase to $14, investor F joins in and buys 3 shares from investor C which transaction ...view middle of the document...
In contrast to developed countries’ well-regulated secondary market, it should be noted that analyzing how chips (stock) transfer from smart capital (manipulator) to small shareholders is an useful tool to predict the stock future price .In order to get unbelievable profit, the smart capital must “buy low sell high”by manipulate price, all of operation will be shown in chips position changing, in spite of all operation is under water.
There is a classic market manipulation case which happened in 2011, operated by some of northern west PE managers.
Furthermore, the market manipulation in all of world will has six stages, (1) collecting chips (stocks) at low price, (2) detecting that other large shareholders’ opinion to this stock, (3) pushing up the stock to where is far from its cost, (4) fluctuating the stock price which can make those who bought the stock at low price at low price, (5) rocketing the stock price and getting the peak ,(6)selling the chips(stocks) at the peak .Simultaneously, this kinds of operation will make chips’(buyers’ cost) distribution show in a different characteristic ,which can be explained the chips exchanging from manipulators and small shareholders.
Finally, this part will show the chips theory used in reality and its chips distribution characteristic.
1, most of shareholders hold the stock which transaction happened at the peak simultaneously nobody wants to sell it. Result: the stock will fluctuate over a long time without any short-term speculate chance.
2, Most of chips collected at the bottom of stock price, while have fluctuated at the bottom for a long time. Result: when the stock price rockets with huge trading volume, we should buy in.
3, the chips are gathered at two or more area while stock price increasing. Result: Holding the stock and waiting
4, the chips (stocks) begins to be gathered at the price peak .Result: Selling out directly without any doubt