Many atimes traders often wonder why the market move up and down and sometimes with impulsive moves, getting some traders on the wrong side and sweeping out liquidity ( money in the market, created by stop orders). Have you ever thought of why the market moves or what moves the market ? Ok in this article, we are going to explore what actually moves the market and who are the manipulators behind these market moves.
What you should know:
If you have traded any financial instruments before, you should understand what market moves are; these are the constant fluctuations (volatility) in the market price of an asset or currency. This price fluctuations or volatility create a short- term or long term investment and trading opportunities. In order to be on the right track, or should I say; in order to be positioned to capturing good and thoughtful trading opportunities, you need to understanding what is actually happening in the backend. What I mean is, you need to get information, so as to know what the big boys in the market are doing.
Do you know that there is a common rule in the financial market known as 90 90 90 trading rules? This means that 90% of traders, will lose 90% of their account values within 90 days. Sounds crazy right ? Yes this is what is actually happening in the financial market, and if you have tried trading Before, I think you must have experience that. Some traders account value doesn't even last 30 days, they gets wiped off.
Now if we should take this numbers of losing account in consideration, you will be left wondering if investing / trading financial market is a total gambling. Of course such a losing rate could grabbed your conclusion.
The thing is, people get in to investment and trading financial market without learning what the game is all about, and going through a learning curve seems a total waste of time to them. You can't get into playing a casino without trying to study what could be your edge, at least 40% of the time. Note: I placed the ratings at 40% with casino, because you can never ever have a good edge playing casino, because one time wins and you rejoice, another time everything is taken away from you, including yourself hahaha 😂😂!! So most people coming in to investment and trading world feels they can get in and get out with big bucks at anytime and anyday.
This is a very wrong approach totally and misinformation made available on social media by so called trading gurus, who are displaying expensive and lavishing lifetime to lure new traders and investors in to thinking that trading is like "sucking mama's br**st milk," Lol 😂 Haha Funny!!. What you should know is that; these set of guys called gurus are not trading. They are either social media content creators or they are on IBs ( introducing broker ) contracts. They make you feel it's that easy, so as to get you in to registering with their broker, while they earn from each of the positions you opened and close in the brokerage platform. Ohh! should incase you don't know, introducing broker ( IB ) contract is a very lucrative business for both retail broker and their affiliates so called trading gurus. Most brokers pay 45 to 70% of every fee generated as revenue to their affiliate ( if you have successfully registered an active trader, in this case, 45 to 70% of the fees generated from that trader's opened and closed positions, are shared with you ) so this set of traders called gurus keeps sending you this information and you keep receiving and believing it consciously or unconsciously and they keep earning from your trading activities without placing a single trade themselves. A very good lucrative business for them.
Now if trading was that easy, everyone would probably become traders.
The manipulative tactics:
Let's delve in to how market moves and why it moves they way it moves. If you have actually been participating actively in the market, you can tell that most times price doesn't move where you expected.
If you are looking to become good at trading, it's very essential to know how market moves.
You know that Market moves in circles, the interplay of both highs and lows forming market phases from which we have the accumulation phase ( buying or acquiring period), the mark up phase ( expanding up ) distribution phase ( supply period) mark down ( expanding down). This phases doesn't just occur, they are played and manipulated by; banks, proprietary trading firms and hedge funds. They play this market utilizing a simple model known as supply and demand, where they begin with accumulation ( characterised by side ways movement) with deep pocket they buy as many asset class they need.
But they have issues because their orders are too large to just get in at anytime, So they need liquidity in order to buy. So the market makers will have to cause manipulation inorder to get retailers into buying or selling at unfavorable price and placing their stops near key areas that will certainly be swept out( stop hunt / liquidity hunt). So you keep wondering why your stops are taken each time you place a trade ? Yes because they are always hunted and taken out in order to gather up liquidity for these big guys in play.
Now the question is, how do they achieve these ?
These market makers go as far as triggering all the textbook patterns you can possibly see on the chart, setting them up as trap to the retail traders and investors, knowing that if you can identify this pattern, you will want to take your trade in that direction. They end up manipulating you in to taking trade in the direction, and they caused the pattern to fail and lock you at a lost or completely sweep your stops. These are the most common play we see everyday. They, hedge funds managers, banks and proprietary trading firms are the market manipulators.
CONCLUSION: Haven gathered these informations, you should understand that trading and investing are big play that totally deals with emotions. The level at which your emotions can be used or managed to achieve your investment and personal goals, will define your personal and investment success. STAY SAFE!
Posted Using INLEO
A few months ago, somebody once told me about market manipulation by these big guys, but i paid no mind to it. I guess i was blinded by the books i was reading to learn more trading strategy. My eyes are begging to open. Does this post have a continuation?
Words of credit, are like the oil that runs from the head to the beard, and even to the skirt of a simple scholar.
My appreciation!
you're welcome
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