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Use the “mirror effect” in unpredictable markets

Discussion in 'Forex Discussions' started by painofhell, Aug 19, 2015.

  1. painofhell

    painofhell Content Contributor

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    In war and conflict, as in the markets, the moves of our counter-parties are often unpredictable. This unpredictability can be our downfall, or it can be the element by which we lead ourselves to victory.

    In Greek mythology, Medusa was a hideous thing with serpents for hair, heinous teeth and a long protruding tongue. She was so ghastly that anyone who looked upon her was turned to stone. To conquer such an enemy – one which is more powerful and seems to have the decided advantage – Perseus, the hero who slay Medusa, knew that he must disguise his own movements. But how?

    When our enemy’s movements are unknown, or the foe appears more powerful than us, the simplest approach is to mirror their movements. Perseus polished his shield creating a mirror and tucked himself behind it. By doing so all Medusa saw was herself, resulting in her destruction as Perseus crept close and lopped off her head.

    Markets can be unpredictable and contain many foes that are often far more powerful than we are. By mirroring their movements you turn a foe into an ally – at minimum they are neutralized. When implementing the mirror effect do not fight immediately unless you know your adversary and their intentions (and this is rare). Rather mirror their movements collecting profits along the way, and only when you see weakness do you strike with might.

    The truth is rarely revealed through words, but rather through what is actually done. Trends may exist for no apparent reason. Mirror the actions of the buyers– you do not need to know their reasons, profit from what they actually do. The tides will turn and buyers will flee or convert to sellers…you will be ready to pounce on the fickle crowd. Mirror these movements of the emerging force by crushing the remaining buyers as they retreat – always mirror the more powerful group, now the sellers.

    When uncertain, use the mirror effect to mirror the actions of the others and you will earn their graces. Slide under their radar and gain information which you can use. When your time comes to act on their weakness, lower your shield, strike and collect your spoils. The mirror effect is a powerful strategy that can defeat almost any opponent.

    Be aware that using the mirror effect can lead you into a trap, but only if fail to react to new information. For example, when trading a chart pattern it may breakout to the upside, causing you act in alignment with the seemingly strongest group–the buyers. What appears so may not always be. If the price quickly retreats, the breakout false, don’t keep your loyalties to the buy side, for it has no loyalty to you. Realize the tide may have shifted, and respond accordingly with your strategies. Mirror the new stronger group. This is an endless sea-saw; the trader who can quickly see who to mirror is the one who will reap the most reward.
     
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  2. sininfinity

    sininfinity Active Member

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    I understand the mirror thing and saw medusa and perceus in clash of titans movie. But i did not quiet understand how you are talking about applying mirror effect in trading?
     
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