You have must seen many times that Index Price Action sometime betrays. Well I too become a victim of it sometime, ever wondered why this happens. I will share you some points that will help you why it happens.
First lets understand how market moves.
Well when someone buy a Security then it goes up while on selling it goes down, We all know market will not move with one transaction therefore huge amount of quantity need to be traded in order to move the market.
There is always a Buyer and Seller, If someone want buy a share there must be seller wiseversa for Selling.
Stoploss and Fakeouts
As i said for Buying there must be Seller and large qty sould be traded to move the market. Since Retailer can't do it as they have limited Funds therefore DII and FII moves the market most of the time. Since they are trading Large Qty in Lacs in order to fulfil the order they first create fakeout (Price Action fake) so that Retailer jump in the trade and get traped after that market moves. Indeed FII and DII may have to loss small losses buy at the end they make huge from Retailers.
Its all about Zero Sum game, so be a Smart Trader. try to catch whats Big Player doing.
