A Voyage to the Diabolical Side

	Alan Farley The Street.com
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Alan Farley demonstrates how traders can profit while the crowd is in pain.

In today's column I'll show how you can use diabolical thinking to get on the right side of the trade. This contrary logic assumes the market will act in a way that hurts the most traders and trading strategies.

Price seeks volume at all times and goes to great lengths to find it. This is why markets tend to move to the point of maximum pain, taking out well-placed stops and rational positioning. In other words, the majority needs to be fooled, and this gets accomplished through diabolical price mechanics.

This dynamic becomes especially important after news releases that shock current expectations. Traders waste a lot of time trying to analyze fresh data flow instead of just leaning against whichever side of the market gets trapped as the event oscillates through the tape.

How does price know where the greatest pain lies? It's easy, because...

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