How The Stock, Futures and Forex Markets Really Work

Whether your interest is in trading Stocks, Commodities, Indices or Foreign Exchange there are literally hundreds of web sites that will offer you ways to do this, on the premise of making you money. Not one of them, to my knowledge, will actually sit down with you and explain just how the markets really work.

There are probably two reasons for this. Firstly, there might be a few who actually know, but in the interest of empowerment, will not readily divulge their knowledge but meter it out peace-meal in a very cloaked way for financial gain.

The second reason, and more probable, is that they don't actually know themselves how the markets work, but will have you believe they do, again for empowerment over you and financial gain. All of this gets you nowhere in your own quest to find out how the markets work, and until you do your level of success will be limited.

In fact some people who have years of experience trading the markets, have little knowledge of how the mechanics of the markets actually work. With this fundamental knowledge at their finger tips, future profits could be increased by a staggering proportion.

There is an old saying which you may have heard. 'Prices are spiraling upwards' or 'Prices are spiraling out of control' etc. The keyword here is 'spiraling'. This is precisely what occurs in every market year in, year out, prices spiral up and down.

The spiral is the basic mechanism by which all the markets actually work. To have a detailed understanding of how this mechanism works can literally transform your trading performance whatever your present level of skill or type of market in which you trade. Therefore, our quest to find understanding shall begin here.

Imagine each individual market is a giant cone which is inverted so it stands upright on its point.

Element One - Angles:

Look in from above the cone down into the large diameter. Divide this circle into 12 equal parts. This created 12 angles which start at the point of the cone and move outwards to the circumference.

Element Two - Spiral:

From the same point we start a spiral which moves up and around the cone (just like a spiral staircase).

Element Three - Price:

This spiral is the path the market price will follow, digit by digit, as it snakes its way up and down and around the cone.

Element Four - Time:

Go back to the 12 angles which divide the cone. We shall attach a specific date to each angle.

The Mechanism:

When the price starts its upward journey around the spiral it will make contact with certain angles on specific dates. This will halt the price advance and cause it to fall back down and around the spiral. The price will eventually strike an angle further down the spiral which will send it back on its upward journey.

This occurs in every market from one degree or another, every hour and every day that the particular market works. If the market price was falling from high levels, the mechanism would work inversely to the above.

If we knew the date which the price would strike a particular angle and change the market trend or direction we would have a great trading tool. In addition, if we also knew the price level at which this would occur we would have a formidable trading tool.

Don't worry I am not about to disappoint. This formidable trading tool is called a Master Spiral Chart, of which there are several types.

To master the use of these charts in your chosen market will explode your profit potential.

John Swift, a.k.a. Jack, is a successful stock & futures trader of some 12 years standing, web developer and author of Work-The-Markets The Natural Science of Market Analysis. Click Here