Charles Kirk, of the Kirk Report, was recently asked about how concerned investors should be about “market manipulation.” This is also a question that I receive from time to time and I think that Kirk’s response was spot on:
For me, I remember as a little guy that life wasn’t fair. After all, there were people who were better looking, much smarter, had far less strict parents and had much nicer and many more toys than I did as a child. However, I soon learned that if I did good things and was a good person, I would be rewarded and that what inequities existed, didn’t really matter!
I think this lesson is one that many traders need to relearn and remember. Take for example this email I received in my inbox this morning….
“While I greatly respect your technical trading skills, I think it would beneficial to you to realize the government is manipulating the markets. To deny this fact is pointless. They have wanted the DOW above 10,000 since March 2009. They manage news flow via Leesman on CNBC and use buy programs via JPM, MS and GS. I have been trading stocks for more than 10 years and I know the difference in a free market and a manipulated one. I realize you do not like to mix these thoughts with your trading but reading your comments on the web site, I feel you are in denial. I feel an occasional comment on the subject is needed.” – George C.
I have one simple question – how does having me talk endlessly about how “unfair” or “manipulated” the markets are make more money for you? Those who know me know that I am a doer, not a whiner. My #1 job as a trader is to profit, no matter what – not to sit here complaining to the cows come home how unfair or not I think the market is to the average individual investor!
Second, it is sad but true, in my experience those who complain the most are also those who tend to underperform the most. All of us unfortunately and far too frequently look for others to blame for our mistakes and losses and frankly right now there’s no better excuse than to blame widespread market manipulation. However, at the end of the day, how does that make you more money or, even more importantly, put you on the right track to improve yourself in the future?
Let me tell you a secret – the market has ALWAYS been manipulated to some extent AND always will. You can either choose to play and find ways to profit from the market or just go home and do other things with your money. Those who make money in this market don’t have time or energy to complain about how the markets are unfair unless they’re selling services and advice that pray on the fears of others. In my humble opinion, we have too much of that already and I’m not going to be part of that group!
Once again, we come back to Econ 101 and the law of supply and demand. Rather than trying to find out the exact motivation of buyers and sellers (an impossible task) it is much more profitable to accept that the market place is made up of investors with differing motives and that are currently taking action based on differing factors. The advantage of a relative strength approach to money management is the lack of emotion required to simply trade the strongest trends. Who cares about the “why” and the “who” behind every price move. It is much more profitable to focus on executing a proven investment approach (i.e. focus on what you can actually control).
Manipulation or no manipulation, there are strong trends to trade.
Posted by Andy Hyer 
