Market Manipulation Tactics And How To Avoid Them
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Winners, understand that their success or failure rests purely on their market knowledge and ability to execute on the experience.
Winners are always working on building their knowledge base and skill set to better understand how the market works rather than merely complaining.
Grasping how the market works forces one to accept brutal truths about life. One of these brutal truths is that whenever money is involved, there will be those who try to get an advantage by either legal or illegal means.
Often legal, but sometimes illegal, financial market manipulation is rampant in today's stock market. Understanding market manipulation provides you an edge over those who merely ignore or deny it.
Bear raiding is when manipulators forces share prices lower by placing large sell orders. The price plunges as stops are hit, adding to the selling.
It's Always Been This Way
Market manipulation is part of the game. Stories of the original stock trading icon Jesse Livermore launching "bear raids" and the Hunt Brothers cornering the silver market to today's stock "spoofing" and VIX rigging abound where ever active investors congregate.
The best way to think about manipulation is to accept it as part of the market structure. As retail investors, we cannot control or change how the manipulators play the game. Understanding that manipulation can work for or against you, depending on your position, helps remove worry about these sometimes unethical or illegal practices.
Action To Take : Be alert to manipulation when making investing decisions. The best way to protect yourself from the manipulators is to invest for the long term.