Tradecraft is a general term that denotes a skill acquired through experience in a clandestine trade. The term is also used within the military and intelligence communities as a collective word for the techniques used in modern espionage. It is also the basic underlying premise of my thesis which is: the market should be viewed from the perspective of an intelligence analyst evaluating covert operations.
Market manipulation is a byproduct of mind manipulation. It is ludicrous to believe that anyone who would manipulate the markets would not first engage in mind manipulation. This is especially true when doing so enhances their chances of establishing and maintaining positive control to bring about certain behaviors. It is the first priority in any confidence scheme or deception operation. It is Tradecraft at the highest levels.
If I were to assert to you that in order to be successful an architect has to conform to certain realities of his profession. No reasonable person would argue that point. He needs to know the materials he is working with and the nature of those materials, how they interact with one another, the principles of engineering etc. The market is no different. Whatever tools you use or develop to understand the market and indeed the very questions you ask about the market, depend on an accurate understanding of existing market realities.
In a nutshell, the reality is that there is an individual who is called a Designated Market Maker (DMM) who while at the same time he is allowed to invest for himself, is also given the incredibly sensitive task of setting the price for the stocks that are assigned to him. As a result this individual becomes a merchant who has the extraordinary good fortune to make whatever posture he takes in the market work to his advantage.
This book was written with the intention of giving average investors the means to navigate the shark infested reef laden waters of the exchange; and I wish to derive credit only from the truth of the matter. May you then accept this in the same spirit in which it is intended; and if you will read and consider it well, you will recognize in it, my desire that you attain the success which fortune and Providence promise.
In 1986 Gene founded Alliance Communications Engineering Inc. and grew the company to the status of a major player in Southern California as a communications infrastructure contractor with over 150 employees. In 2010 Gene became a California Registered Investment Advisor to pursue his passion for stock trading at the professional level. Although Gene is now retired, he is still the Managing Member and Principal at SUB~ROSA CAPITAL, L.L.C.
Gene has written many articles published on MarketWatch, Reuters, Seeking Alpha etc., etc., etc.
"Good Read especially explaining the problems with Stop and Limit Orders" - LP
"I want to thank you for sharing your insight and knowledge of the stock market. You have a rare gift of wisdom as defined on multiple levels." - Jack L
"I've probably read over 200 books about the stock market in the last 25 years. This one is in my "Top 5." It's also a steal at $10. The info on "what to avoid" + "what to look for" could easily save 100x the purchase price in next one or two trades." - Greg K
"Gene, I have studied your Manifesto (couldn't put it down until I finished it!). It echoes much of what I learned in the Professional Trading courses I have taken ("Think like a Market Maker!") but takes things to a new level for me. I'm not sure why you are going to all this trouble to write these articles exposing your "trade secrets" and years of analysis data but I really do appreciate them. I follow your blog every day and have studied most of your past trades with the hope of learning more. Some are uncannily accurate. Thanks for the heads-up on liquidating. I will be watching the market closely Monday." - Dave L
"Gene, Thank you for your response. I completely agree with your methodology and have read a number of your articles (EMC, GE, F, PG, HD, NEM, and more). Averaging into any new position is by far the wise thing to do. I apologize if my comments on Ford sounded critical, and I did notice your heavy emphasis on cutting losses (without the use of stops!) in all of your posts :) ... The reason I ask if Ford is still a buy, and if you would still maintain the $12-$15 target is because I have had F on my watch list for several months. In June 2011, the price was in the 15s, and was flirting with the 9s during the October lows. Since Dec 2011, the price has been trading in a range (10s - 12s). I agree with your post that F could move to the $12s and up, and just thought I'd ask. It's been great the last few days sharing ideas, and hope to hear back when you have more time. Until then, I will continue to visit your website for more reading.
Regards," - Andrew
"Thank you so much Gene for sharing your information. I just made a tidy profit on AVP yesterday thanks to you (bought at 14.38 sold at 16.40)! Coincidentally I also own CAT - I think it has potential to double. Glad to see you are also long. I will look to exit 1/2 position on CAT based on your recommendations around 94 and then maybe p/u again on a dip. I bought F at 9.57, missed that one a bit, but I'll take 4% any day. I look forward to following your blog - and good trading!" - Arlene
"Gene, I just want to let you know that I am really enjoying the Manifesto and think that you are right on the money with your approach. I have long known that Wall Street was nothing less than the carney and casino taken to a whole new level of sophistication -- and even knew a bit about how market makers work -- but never really considered how to beat them at their own game. Although I have a lot more to digest, it is clear that your approach is unique and brilliant! One question: are there any other published materials out on the topic that you recommend?
Thanks," - Al
"Hi Gene, One last check-in just to wish you the best. I've learned & profited from your guidance over the past year. Not sure if you're going to resurface again. If not, I hope all is well with you. Best regards," - Bruce
"Hi Gene, Thanks for the e-mail updates on your trades. I really appreciate you sending out your trading ideas and articles. I just made $1100 on the MCP trade, wanted you to know. Thanks,"
Hi Gene, I hope all is well with you. I missed your emails and analysis last week and I'm sure your loyal followers did, too. We all look forward to hearing from you. Sincerely," - Bob
"Hey Gene, A very Happy New Year to you. Thanks for the information you share with us little retail investors. You've given me a while new way to look at and understand the market, and it has helped me to retain my sanity in an often-insane environment. Best wishes for 2013," - Chris
"Gene: Good Morning! Just wanted to bring to your attention that I ordered a second copy of the Manifesto. This copy is for my son. When you have the opportunity to send the book it would be much appreciated.
Thank you for attempting to raise the financial awareness of those of us in the hinterlands. It is working..albeit slowly in my case. Cheers!" - Jack
"Hi Gene, I do hope you are enjoying some good down time and the upcoming holiday weekend. I thoroughly enjoyed reading The Manifesto, very well done. Perhaps not a legacy that will get you a statue on Wall Street (more likely the opposite haha) but a contribution that you should be extremely proud of, best money I have spent in a while. Your command of the English language, metaphor and rhetoric makes, well less face it, sometimes dry material engaging and fun. I must admit I'm a bit worried of this proposition taking your time away from the blog, I enjoy the breath of fresh air even if I am not in on that particular trade, forgive my selflessness ..." - Jon
"Gene, It was very kind of you to share your thoughts about your book. It’s absolutely the missing link to successful trading! You are one smart guy, my friend.
Regards" - Larry
"Gene, Wow, another humdinger of a recommendation. You are on fire! I'd give you a high five if I could." - Mike
"Gene: Thanks so much for your reply. I wanted to read the Manifesto before writing you again. I've now finished reading it. I enjoyed your insights in it very much. I've begun to incorporate this view of the world in all my activities. It really does take some getting used to. Because so much of what I believed was the exact opposite of what really occurs. The insights you've given me are incredibly valuable."
"I've been reading your emails and tracking the trades to identify the setups on Stockcharts.com. Using 1 minute interval charts, you can roughly guess what the DMM is attempting to do with the merchandise. Tracking their paw marks and figuring out the direction that their going in is an art form. But as you point out again and again, the volume does give them away. Thank you for the insights and the knowledge. Sincerely," - Paul
"Gene: Hope you had a good holiday. I'm sold on the Subrosa strategy. At times it's difficult to pull the trigger on the trade (HPQ and HD) but if I close my eyes and just do the trade as set, 94% of the time it works. Thanks," - Steve
"If we can assume for the sake of discussion, that each of us has relatively the same skill-set and resources -- then nobody has an "edge".
However, if there is a select individual or group of people who are using hard to get information which is critical for determining the impetus for a given move, then that person or those persons have an edge."