Market Manipulation Dynamics

What those last two posters didn't understand is that I have nothing against manipulation. Manipulation is just a part of the game and a part of life.

If you understand market manipulation and how it works it makes the markets more predictable because you can recognize what the bigger players are trying to do.

Probably the best thread I've ever read here on FF, seriously. I completely agree with what you're saying, MasterGamble. I've noticed this stuff too over the last couple years and while I'm still no trading master by any means, manipulation is blatantly obvious to me.

Thanks for sharing your insight here!

Well... I don't really care if people disagree or agree with my theory. It works...

Just made some nice $$ on my theory again as usual... Checked news feeds... No news... Crossovers downward. Just a bunch of speculators pushing the market behind equilibrium... Fade em on capitulation of some longs!!!

It doesn't matter if the wave counts are noisy or a bit randomize... Once you understand the fundamentals of market movement and manipulation it doesn't matter!

This evening was the utterly PERFECT example of a speculator snapback effect in a supply/demand equilibrium market unaffected by news or long term trend.

The games will change now and a new game will be at play once we enter European session. The big boys will come out and start positioning as soon as the liquidity picks up. That game I admit is MUCH harder than the games that are played during Asian markets... Asian markets and price action is still pretty natural in movement and unmanipulated from what I have seen. Perfectly visible volume spike endings to both the down and up move.

Man this trading was easy this evening... Normally this session isn't so active. As the European crisis heats up the most predictable and easiest trading is going to exclude the hours 8,9, and hours 14, 15 in the Brussels time zone.

Normally I don't play this session because the pip movements are not large enough... But things were moving plenty to capture a few 10 pip moves.

Avoid the hours where large funds and banks are repositioning long term unless you are trading long term.

In the last two years I have only seen two areas where I really think there was large scale manipulation of the EUR/USD currency pair. Price action within these two areas was completely unnatural across all timeframes and showing classic "iceberged" behavior. Like there was an artificial block placed underneath the market.

It's especially visible on the 8hr in the second area. Complete breakdown of natural emotional wave structure.

The euro rallies of 2010 and 2011 appeared natural and unmanipulated.

I remember reading the popular book. Reminisces of a stock operator... I think. He talked about how when he went from the bucket shops to the real market he failed in the real markets. Buying into moves always failed because he moved the market too much.

His methods of trading worked just fine as long as he didn't move the market... And traded at a bucket shop or similar operation. They would soon kick him out for winning too much though. They wanted gamblers that would gamble and lose, not traders... He also sometimes put in a call to a friend who would push the stock up cheating the bucket shops.

Where did he go wrong in his approach and how could he have made money in stocks instead of losing it in the real market? Well... Instead of pushing stocks beyond their natural equilibrium like gamblers and trend traders do... He needed to cause pullback in the stocks and fear in the traders before accumulation.

The big boys who know stocks well love to hit stops outside of the equilibrium range of the stock and accumulate those shares... Then as it drifts back to median or even across it's a big win for them!!!

Reminiscences of a Stock Operator! That book is a goldmine when it comes to info about what I call "the mechanics" of trading markets. Livermore devotes a chapter specifically to the question of whether "manipulation" is some sort of evil scourge...

"Instead of pushing stocks beyond their natural equilibrium like gamblers and trend traders do... He needed to cause pullback in the stocks and fear in the traders before accumulation."

"Manipulation" is just the way that healthy markets function. In regards to the forex markets, one just need to put himself into the heads of the smart money and take into consideration the advantages and disadvantages that come into play with the fact that their orders move the market.

I agree with what you said a few posts back about how understanding market manipulation makes the markets more predictable. I'm always asking myself, "What is the smart money doing, and how can I front run it?" The truth is, our relatively small position sizes (and even $25 million dollars is just a speck in the FX markets) are a great advantage. We can buy at the bottom and sell at the top, whereas the big money may have to buy on the way up and sell on the way down if they have an especially large position to accumulate/distrubute.

Anyways, great posts MasterG, much appreciated.

Hi,

I got a question. I believe Both side(bull and bear) have their smart money, big guys who are running there. So, are there 2 ways(up or down) market manipulation? MasterGamble, you talked about only one side manipulation.

On daily chart of e-usd, 1st half year is down swing; then, summer holiday; then, a head and shoulder price pattern got euro swing up a bit; then, pullback, stucked in 100+ pips there in early August.

Both side: bull and bear fighted there, Olympics in London there, there were no orders, waiting mode or test mode. This is not market manipulation, I believe. The market is often in waiting status, waiting for analyst to work out fundy view bias(direction) for big guys to manipulate, kick the price to move in faked, fast, cheating ways.

Does a higher tick volume bar mean some manipulation process push the price behind screen? Big guys' volume may not be displayed or input into MT4 of retailer terminal.

MT4 tick volume bar may show how many of small traders follow the price to open/close trades in that bar period. If all open trades in that bar, then, price would go higher; but, if more close trades, price won't be higher. I believe, the key is the ratio of buy and sell ticks in tick volume, but, no this ratio information.

Now, only you can assess "a buy pressure increase" if price move higher if you see a higher volume bar. Is this assessment using volume bar information reliable for entry decision?

Price increase with tick volume increase ? manipulation ?
price increase with tick volume decreas ? manipulation ?
Price flat with tick volume increase ? manipulation?
Price flat with tick volume decrease? manipulation?
Price flat with tick volume flat? manipulation?

Which case would you like to pay attention for possible manipulation? when watching the market.

But there is manipulation in the market, by 'big players'. Just ask yourself: "who, in his right mind, would buy into major resistance levels (big numbers, pivots, fibs, etc.)???" And who, for that matter, would be stupid enough (in the light of 'trading knowledge') to jump in at that point???


Also, think how to exploit this manipulation by 'Big Money'.


As a side note: it's the same in the medical business, where 'Big Pharma' pushes people into believing they need 'medicine' in order to become (and/or stay) healthy. This leads to surreal situations, where people are being poisoned with chemicals (like 'chemo'), while believing there's no alternative! Sad but true...


Okay, I wasn't going to, but since I've said A... In short, what is disease, in my opinion? It is the 'triggering' of natural, biological processes (by fear, anger, worry, etc.), which are meant to boost cell growth, certain chemicals (adrenaline, cortisone, sugar, etc.) in order to increase your (short term!) chances of survival. In our civilized world, however, these processes often become chronic ('stress', traumatic experiences) and set us up for manipulation by the medical society. Mainstream medicine calls this nonsense, of course (doctors don't even hear about this theory, during their education), but it's up to you to decide about that, hopefully after you've done some research yourself (you could start here, and here). I did this, when forced by circumstances, and it saved a loved one the horror of undergoing devastating surgery. Our oncologist told us this was suicide, but this was already five years ago :-)


Sorry for bringing this up here, I know it's not the right place to do so, although... is there a wrong place to try to help people?


As the cliché says: just my two cents.

Anything one does has an effect on himself and others, so, if you define this as 'manipulation' then the word becomes meaningless. Most people use the word manipulation to describe actions carried out to make profit for oneself, usually at the cost of others. Smiling at someone, with the purpose of making them feel good, is not manipulation, it's just being kind. Smiling to someone with any other intention than making that person feel better (or call it 'out of kindness') is manipulation. Pretty simple, right? In relation to forex, luring people into buying or selling, with the intention of stealing their money is pure manipulation. If there was no manipulation in forex, it would be rather easy to make money: just buy when price starts to move up and sell when it moves down - you'd only lose when you'd buy at the point where price becomes 'overbought' and sell where it becomes 'oversold'. It's exactly this 'natural flow' that is being manipulated by the rich, in order to get even more rich... 'Stop hunting' and 'price spikes', often under the cover of 'news' (luring people into trading the wrong direction), are some of the common tricks used by so called 'Market Makers' (or 'Big Money', 'Big Boys', etc.). Why else would over 90% of traders lose their money in this 'business'?

As a side note: the art of trading is in learning how to avoid getting manipulated by the 'Big Boys'. A good 'method' to realize this goal is to wait for price to re-test strong support/resistance levels (pivots, fibs, big numbers, horizontal lines of repeated s/r over a longer period of time, abc's, 123,'s, etc.) - this is also where 'discipline' and 'patience' comes in. And don't get too paranoid by the fact there's manipulation in forex, because it's just human nature to manipulate others for your own benefit (after all, in our human form, we're closely related to the other animals that inhabit this world). See it as part of the game of life - there can be no good without bad, pleasure without pain, etc. Forgive me if I sound a bit too patronizing...

Good luck, everybody.