How price manipulation happens

Denis Gorbachev
Jul 24, 2017 · 1 min read

The goal of price manipulation is to shake out weak holders & buy at more favorable price. Here’s the sequence of actions that manipulators employ for that:

  1. The price shows sell resistance at level P1 (nobody sells lower).
  2. The price bounces up from P1 once again, and goes to P2 (P2 > P1).
  3. The same manipulator places a small buy order at P2- (P2- < P2).
  4. The manipulator places a large sell order at P2+ (P2+ > P2; P2+ = P2 * 1.01 — small difference).
  5. The weak holder sees the large sell order, believes the price will go down further, sells into manipulator’s buy order at P2-.
  6. The manipulator removes the large sell order, allowing the price to shoot upwards (like “taking a lid off the boiling kettle”).

“Better price, my friend!” — says the manipulator to himself.

Denis Gorbachev

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