Sunday, September 12, 2021

PHYISC - Auction - bidding ... simple explanation

Writing allows me to revise, recall and refresh my memories. Reading and re-read what I pen makes it a total at least 4x of revisions.

A simple concept and the most basic is about DIRECTIONAL force. Any object / force / energy / hydraulic / liquid directional pathway will always flow and move in the directional path of LEAST resistance. There will always be "resistance" opposing force but the resistance force will NOT be strong enough to change the stronger force.

Inertia as I initially learned back in 1978 while studying Physics as I understood it to describe the NON-changing "state" of an object. It can be stationary and remains stationary or it can be moving in a certain direction at a certain velocity without changing direction and velocity.

Comes the next phase of an object in motion. How it moves and why it moves in a certain manner. There are 3 forces namely the gravitational weight, directional force and the opposing force.

For the ease of understanding, gravitational force is ignored and focus on the basic directional and opposite directional force. This is like trying to understand the BUYING and SELLING force.

The action will move in favor of the "winning" force. Trying to decipher/explain why the force is winning is irrelevant as this is merely an academic importance but of NO financial value to me.

It is like going to bid for a house during auction. The LAST price will be the ONE and only bid. As long someone place the last higher bid it will move to higher level. It doesn't matter there are 100 buyers at lower level(s) what matters is who will be the next higher bidder. This 100 buyers are NOT bringing the price higher at best they prevent a crash at that moment if they remain there and did not withdraw.

The "background" of the last person or entity that brings the price higher is of NO IMPORTANCE and IRRELEVANT to anyone or the seller or the auctioneer. All that matters is .. IS THERE ANYONE WILLING TO BID  HIGHER like the directional force.

Too much unnecessary irrelevant discussions in the media why the stocks/commodities/currencies/index should be UP or DOWN. Such discussions only distract and ignore the most basic element ... WHO IS IN CHARGE ? BUYER or SELLER ? WHY is IRRELEVANT completely.

As  long we stand WITH the winning force or the same direction as the FLOW, the rest is IRRELEVANT. The rest are merely academic that can be FATAL if we do not know how to manage this as market force is a DYNAMIC non-linear capable to change in "seconds" speed while our views / opinions / bias can't change in "minutes" speed.

Market is not to EXPLAIN it's action(s). It is only PEOPLE that attempt to EXPLAIN. Right or Wrong explanation is IRRELEVANT to market. Market is not grading the answers/explanation. Market will do whatever it wants to do easiest and show anyone who is tracking the market actions that it moves on its own free will sometime contradicts what the media says and sometime agrees. Such market action only CONFIRMS that Market is independent of the news. SO WHY BOTHER THE NEWS? Just track market actions


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