The Forex Scalpers Market Manipulation

What Is Market Manipulation?
Market manipulation is intentional deception by stock brokers, traders, analyst or bankers in an attempt to misrepresent or alter market prices. Competition and profit are both at the heart of market manipulation. Sadly, there is a general consensus that Wall Street brokers are willing to do anything for a profit, even if it hurts other investors in the process. Market manipulation is illegal in most countries; in the United States, it's outlawed under the Securities Exchange Act of 1934. Market manipulation comes in many shapes and sizes. 

The following are a few examples of different types of market manipulation.

• Churning - An attempt by a stock broker to increase activity in a client's account to boost commissions by buying and selling orders at the same price. This activity is intended to drive up the price and attract other investors.
• Ramping - Creating activity or rumors intended to raise the price of a stock.
• Wash trading - Generating activity to push up the stock price by selling and re-purchasing the same security.
• Bear raiding - An attempt by a broker to short sell a security and drive the price down, allowing it to be bought back at a lower price and thus make a profit on the difference.
• Cornering - When enough of a certain stock, commodity, or other asset is purchased in order gain control and establish the price for it. 
• Insider trading - This is perhaps the most well-known type of market manipulation; it refers to when insiders with confidential information about a company use that information to their benefit.

Market manipulation is part of the game. 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 big boys 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. Also, it is critical to understand that stock market manipulation is mostly always in the concise term. In other words, it has the most adverse effect on day traders and other short-term investors. Make no mistake, long-term concentrated manipulation can and does take place. However, investors can definitely profit from long-term manipulation, as it results in price trends that can be exploited. The best way to protect yourself from market manipulation is to think long term. Understanding the types of manipulation can allow you to make better decisions when investing.

1.Fake Outs.
A Fakeout (Fake Breakout) is a form of manipulation to trap breakout traders. If a breakout trader sees that there is a big breakout which break through a strong resistance or support, he thinks it will continue to break into the end of the world. However, the price makes the reverse and then it comes back to the stop loss of the breakout trader.

1.1: The Fake Out. The Fake Out incident itself is Manipulation. They are in a position to protect The Fake Out Level and eliminate retail traders in this area.

1. Support and Resistance trader enters the market, when there is swing high, sometimes there is Candlestick Reversal Signal too.

2: Pullback trader and breakout trader open a buy order at once and then taking Stoploss Support and Resistance trader.

3: Big Order enters, takes out order breakout trader and pullback trader. The traders who initially entered the market in GREED, have now lost their willingness to enter the market for FEAR.

4: The market is now in a state of calm. So the price goes ahead of the initial decision to reverse the first Swing High.

1.2 How to identify a Fake Out Level?

1. Price must come in (1) Rally 
2. Then Price makes the first (2) High 
3. Then it will make a (3) Low 
4. Price will Fake out and form (4) New High
5. After the high break on the left, it will produce one (5) more important base 
6. Price will break (5) base and engulf (3) Low and produce (6) New Low. 
7. Entry at (7) Sniper Entry when the price returns to (5) base

Conversely, of course also occurs than we speak about a drop / low / high / new low / base / high / sniper entry buy! Below an example:

2. Even more Fake Outs...
Back in the days when I just started trading, I always reacted immediately to a breakout. Then i lost continuously because the breakout turned out to be a fake out. But how do you react to a breakout? The key is to have patience and to wait for the signals. Often there will be a retest before a real break takes place. Do you already see that the price reacts to the Supply or Demand bias as the example below you can almost be sure that it is a fake out.

The Fake out must have some resistance / support wicks. It will always FakeOut to the base supply and demand above the resistance wicks or under the support wicks.

There are many more signals to which you can recognize a possible fake out. You have to be able to feel the market and recognize changes in behavior, for example. That is why it is always smart to start with 2 or 3 pairs that you can optimally analyze. Get to know the pair and get to know their movements. Even I stupidly enough step into a fake out still sometimes .. But do you know why? Patience!!!!! trading requires a lot of patience. Only then can you get the most mistakes out of your trading style and you will get more take profits than stop-losses!

3. Read The Candles.
Now I want to talk about reading the charts. At some point if you have been trading for years and looking at the charts all the time you learn that you will recognize certain changes in behavior on the charts. And then I am talking about the candles and how they are moving. At the candles you can often see "symptoms" that indicate that there is a probable chance that the trend will change. We all know the types of candles and what these may mean. And also how we can respond to this. But now I'm going to show you something about the bigger picture the whole picture. Below I will set an example with the best possible explanation.

Here you can see a nice Uptrend of EUR / USD on the 4 hour time frame. How can you tell in advance when this trend is coming to an end and will possibly change?

So always look at the bigger picture. Especially the higher time frames can tell you a lot about what might happen.

4. Stophunt.

Now we continue with another important topic the stophunt. Do you wonder what exactly a stophunt is? ”Stop hunting is a strategy that attempts to force some market participants out of their positions by driving the price of an asset to a level where many individuals have chosen to set their stop-loss orders. The triggering of many stop losses generally leads to high volatility and can present a unique opportunity for investors who seek to trade in this environment.” The reason trading with price action can be profitable is because whilst the Forex market is random, the humans who trade it are not. The traders who participate in the market often operate out of habit to show the same trades and many people take the same trades out of habit and because they learned that way. And it is these habits that create the same outcome over and over again. That is also the reason that you see the same patterns coming back again and again in the market.

So what can you do to step into a stop hunt as little as possible?

Stop entering when the pro’s are taking profit!!! The chart below shows a very common pattern in the Forex market. Take a moment to study this chart and note the point differences of where the professional enters and where the retail trader enters. On the left you will notice the retail trader buys and takes a long trade when price is at an extreme high. Soon after this the retail trader is stopped out as price moves lower from this high. At around the same time the retail trader is stopped out, the professional traders are entering the market in trades to get long. When price moves higher the professional trader will cover their long trades and start taking profit. They professional traders will begin to leave the market after making solid profits. At the same time, the professional traders are leaving the market, the retail traders are starting to get long again.

The obvious difference in this image above is from where each trader enters their buy trades. Whilst the professional trader waits for price to retrace back lower, the retail trader buys from the extreme high. The image above highlights why entering trades at extreme highs or lows without any retracement can be super dangerous. When traders enter from these areas that are at extreme highs or lows, the big guys are taking profit and leaving the market. Whilst the big guys are leaving and taking all their money out of the market, the retail traders are getting in. Obviously getting into the market when the big guys are getting out is not a smart plan. But how can you best prevent this? I'll show you now in the charts below. It is best to always wait for the retest and not immediately step into a first "Break".