How "sharks" manipulate the market and take profits from retail traders in forex or financial markets?

in #investing10 months ago

How "sharks" manipulate the market and take profits from retail traders in forex or financial markets:

  1. Liquidity traps:

Luring investors into orders: Sharks create the illusion of a market trend by suddenly pushing prices up or down, attracting retail investors to buy or sell orders accordingly.
Reversing the trend: When the order volume from retail investors is large enough, sharks will reverse the trend, causing investors to lose money and be forced to cut losses.
Profit taking: Sharks profit from the price difference and transaction fees when investors cut losses.

  1. News traps:

Spreading fake news: Sharks spread fake or inflated news to deceive investors about the value of an asset.
Creating FOMO: When investors believe the fake news, they will FOMO (fear of missing out) and buy or sell massively, creating an opportunity for sharks to manipulate prices.
Profit taking: Sharks profit from the price difference when investors buy or sell based on fake news.

  1. Psychological traps:

Taking advantage of greed and fear: Sharks use psychological tactics to get investors to make wrong decisions.
Triggering Stop-loss orders: Sharks push prices close to investors' Stop-loss levels, causing them to automatically cut losses.
Profit taking: Sharks profit from the price difference and transaction fees when investors cut losses.

  1. Using superior technology and resources:

Algorithmic trading: Sharks use automated trading algorithms to manipulate the market faster and more efficiently.
Access to market data earlier: Sharks can buy market data earlier than retail investors, helping them predict price trends and make profitable trading decisions.
How to protect yourself:

Persistently learn and improve knowledge: Mastering knowledge about the forex and financial markets is a crucial factor for retail investors to protect themselves.
Trade with a clear plan: Always have a specific trading plan and follow the discipline.
Effective risk management: Use risk management tools like Stop-loss to limit losses.
Trade with a reputable broker: Choose a reputable and transparent broker to ensure the security of your trading account.
Note:

The forex and financial markets are a risky environment.
Retail investors need to be cautious and equip themselves with the necessary knowledge before participating in trading.
No strategy guarantees 100% success.
Advice:

Always learn, improve your knowledge and practice trading skills to improve your chances of winning in the market. Never invest money you can't afford to lose.
Good luck!
https://one.exnesstrack.net/a/asusa8chp1

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