Diagram Market Tug of War

Diagram  Market Tug of War
The equilibrium is a tenuous one, indeed. The distribution of buyers and sellers over
the initial price trend or swing is obviously not perfectly even: Some buyers hold
more contracts than other buyers. They have also different propensities for taking
profits or losses. Nor does it account for the buyers and sellers who have entered the
market before the initial swing or during the reaction swing. Not all of the buyers and
sellers from the original swing may be in the market any longer.
Remarkably, GCSC eventually takes all of this into account - especially they buyers
and sellers at other price swing levels, called matrices.
Nevertheless, the 50% retracement point IS often a powerful and very real point of
equilibrium and certainly a ‘known and defined hot spot’ of which one should be
aware. Remember both the futures markets and the currency markets are very close to
a zero-sum game’. It is only commissions, pips and slippage that keep them from
being zero-sum. At the 50% point it doesn’t take much to shift the balance of power
for that particular swing matrix.
THE RULE also states the final (3rd) swing of the move - back in the direction of the
initial swing - will equal the value of the initial swing. The logic of this idea, called
the ‘measured move’ is seen in the following diagram.