Behind Favourable Information, it is actually the purgatory of retail investors

In the financial markets, there is a harsh reality: when everyone becomes aware of the Favourable Information, it is often the prelude to being harvested. The truly profitable Favourable Information is usually already laid out by the market makers in advance. These Favourable Information typically come suddenly, without a long period of preheating.

Taking the well-known Favourable Information event of Trump's inauguration on January 20 as an example, many retail investors believed it was a good opportunity to make money, so they positioned themselves in advance, eagerly anticipating a rise in stock prices. However, what they didn't know was that the institutions had long prepared to reap profits on that day. Retail investors thought they had seized the opportunity, but in reality, they fell into the trap set by the institutions.

Looking back at the news a few days ago when Trump called for a national reserve, this kind of Favourable Information seems to have appeared suddenly, but in fact, the institutions had known about it in advance, and had already made arrangements, even opening contracts worth billions. It was only after the institutions had made a fortune that retail investors followed suit, only to be deeply trapped the next day, with the stock price falling all the way, and no bottom in sight.

The reason behind this is that the institutions have a strong information advantage and financial strength, allowing them to obtain Favourable Information and layout in advance. Retail investors have limited access to information and often react only after the information is made public, by which time they have missed the best opportunity and become the bagholders for the institutions. Therefore, investors should never trade on the day when the information is made public, as what they see as Favourable Information at this time is likely to be the perfect opportunity for the institutions to unload their positions.

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