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The Yin and the Yang of Markets
I am reading a fantastic book on trading, first published in 1924, by Richard D. Wyckoff, titled ''How I Trade and Invest in Stocks & Bonds''. Although most of the examples in the book pertain to stocks, the insights into the nature of trading are relevant no matter what instrument you choose to trade.
On the other hand, a stock is in a weak technical position
on the short side when the bears have exhausted their ammunition
by selling all they can afford and when the buying power of
investment and speculative purchasers is such that it resists
the pressure of the bears; in other words, when demand overcomes
supply. The weakness in such a position is found in the fact
that all those who are short are potential bulls; they must,
sooner or later, cover their commitments in order to close
Perhaps the nature of all markets is best described by the Chinese Yin Yang symbol:
In every bull move, and in every bear decline, are the seeds of their own destruction.
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