Posted On: 03/03/2012 3:38:06 PM
Post# of 853
Penny traders believe that Market Makers (MM) will "signal" moves in advance buy using small amounts of buys or sells as "signals". The "signals" are such a small amount of shares (worth no more than 5 or 10 dollars) that no trader would have paid a commission that costs more than the amount of shares bought. The "signals" are from one MM to another.
- 100 I need shares.
- 200 I need shares badly,but do not take the stock down.
- 300 Take the price down so I can load shares
- 400 Keep trading it sideways.
- 500 Gap the stock. This gap can be either up or down, depending on the direction of the 500 signal.
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