Lindex trading 101 for the uninformed.

I'm not sure what you are implying exactly, but look at the title of this thread. Svar created this thread to help educate the uninformed. That is what I and some others have been doing.

Ok the week ended, how did my theory work? My theory did not work very well it seems. The week produced over $200K in total dollar sales of L$ but my prediction ot the exchange rate hitting a low of L$310/1 by Sunday failed. I was sure of this on Saturday night when some financial genius offered 50K L$ for L$352/1 and I bought 45K which I quickly offered at L$315 which I determined was to lowest I would see on Saturday. There were many other offers already at L$315/1 but I was betting that the rate would actually fall to L$314/1 so I could sell all 45K. I came close to selling all 45K when I sold L$36,918. Realizing that not only would I not sell any more of the L$315/1 offer on Sunday I moved the remainder along with 30K that had been sitting at L$310/1 over to the SL Exchange to be sold at an average rate of L$320.3/1.

The sad thing is I just learned how to trade the SLEx and the L$320.3/1 exchange rate was much better than the L$315/1 exchange rate I got for the first L$36,918 of the original 45 K buy at L$352/1. Why, because the L$36,918 only netted $113.09 after the 3.5% commision yielding an effective rate of L$326.45/1.

So what happened? I don't know. I was collecting data at 11:00 PM every night to see how much L$ was being offered above the L$280/1 exchange rate until 5/10/06 when it didn't seem to change much. On 5/19/06 I realized that the data could be used to show how much LS was being purchases versus offered in USD terms. On 5/10/06 there was L$22.0 million offered at L$280/1 or higher for a cost of $74,306 on a day when only $21,845 worth of L$ were purchased. At the time this data was collected the highest offered rate was L$307/1. Jumping ahead to 5/19/06 we see L$24.8 million offered at L$280/1 or higher for a cost of $82,560 on a day when $32,533 worth of L$ were purchased. At the time the 5/19/06 data was collected the highest offered rate was L$315/1. Is this a problem considering the 5/10/06 data, no given that there was $8,254 worth of L$ more being offered than bought during that time. It was a buyers market and the value of the L$ dropped.

Here is my problem. On 5/20/06 we see L$22.8 million offered at L$280/1 or higher for a cost of $75,985 on a day when $30,641 worth of L$ were purchased. At the time the 5/20/06 data was collected the highest offered rate was L$315/1. Wait a minute how could $6,575 worth of L$ more purchased not reduce the exchange rate? Well my counting method allows that to happen but the the interesting thing is there is much less L$ sitting above L$280/1 on 5/20/06 than there was on 5/19/06 because people with offers above L$280/1 simply moved up their offers up so they sold at the prevailing exchange rate.

The 5/21/06 data returns to a normal pattern of sellers outnumbering buyers and the highest offered exchange rate was L$317/1. However if buyers outnumber new sellers in the days to come and the exchange rate continues to rise which it looks like it will, There will have to be a correction where the exchange rate actually goes down as people who panicked early begin to hold on for a better exchange rate in their near future. I can't tell if or when that will happen because first we will need more buyers than new sellers.

The comming open buy orders will certainly liven things up but may not stem the recent rise in the exchange rate.

Look for everything to be 316 and up for a long time because some sellers or seller decided to stick over 3 1/2 million Ls at 315 to 1. If anything sells at 315 to 1, it will be very shortlived and go back to 316, 317 for much of this week.