Stock Market Manipulated, Can That Be Possible?
Can someone manipulate the whole market, is it possible? Yes, it is possible and history is the evidence. Many historical events prove that the stock market manipulated at different times.
But is it still possible in these days of electronic trading? Well, as a retail trader you must know it. Because market manipulation can ruin the whole career of a new trader.
So new traders are always required to save themselves from manipulation. Market movers and makers are sometimes responsible for the manipulation.
Not only these people are responsible for stock market manipulation. No proof is there about when was the stock market manipulated by influencers.
Know This Before You Say Stock Market Manipulated
You will find many expert traders talking about stock market manipulated news. But what does it mean? What is the meaning of manipulating the whole market?
It is not about traded securities, bonds, equities, and currencies. It is not about the market-maker who trades particular stocks.
It is not about any derivative product like ETFs and the commodity. It is about stock-exchange such as NASDAQ, NYSE (Newyork Stock Exchange), and wall-street.
So is it possible to see the stock market manipulated by anyone? Who can manipulate the whole market? All these questions are necessary to be answered right now. So let's start with the following information.
What Is Market Manipulation?
Do market manipulation is linked only with market volatility? No, it is linked up with high-frequency trading got the point? When there is interference in fair trading, it is said to be manipulation.
Suppose a market-making hedge company causes a market crash to make huge profits.
A stock market manipulated by high-frequency traders has a different impact. Sometimes they do it to save brokerage and sometimes to move stock prices.
But they do it without being in the regulator's eye. The same market abuse situation occurs to make profits on securities and exchange commissions. Market manipulation can cause a flash crash in trading volume and price.
Why Does the Stock Market Manipulate?
Why do global market traders need it? Buyers and sellers with high impact always manipulate stock-exchanges to earn more. They influence the stock markets with their bulk buy-and-sell actions. Algorithmic trading is used for it sometimes.
They make quick and bulk decisions to buy or sell any stock. The stock market manipulated by intraday traders has different impacts as compared to others. Even forex markets are sometimes manipulated.
Impacts Of Stock Market Manipulation
The stock market manipulated by high-speed trading is profitable for high-frequency traders. From bid-ask price to clearing all the orders, everything is done in a quick movement on the trading floor. There can be different impacts on stock market manipulation.
From price-discovery between supply and demand to open interest. There are always different impacts. Institutional traders and retail traders see it differently. So let's understand it through the following two examples.
Every time a stock market manipulated has someone behind it. Institutional traders are mostly responsible for stock market manipulation. We are not saying that all of them are involved always. But most of them are on the stock market manipulated side.
That is why they get less impacted by manipulation on stock-trading platforms. These traders are mostly the decision-makers and market movers.
Retail traders are less impactful in the market but they see more impact on market manipulation. Institutional-investor gets profit and retail investors face loss with manipulation.
It is not only about stocks. But the same situation is for futures trading, currencies, and equity trading. More impact is always on a retail trader in any financial market. The stock market manipulation will force retail traders to sell stock even at loss.
Figure Out If Stock Market Manipulated Or Not?
You can easily find out if the stock market manipulated or not. Market data and trading commission is not enough to see the dark pool.
A dark pool shows the volume of trades by institutional traders. They use automated trading techniques while buying or selling stock.
Consider the below-mentioned things. After reading them you will easily understand financial markets and their manipulation. Always check the following things to find out if the stock market manipulated or not.
Keep An Eye On Volume
There will be a sudden change in the volume of trade during manipulation. As a retail investor or shareholder, you can check market capitalization with volume.
Day-trading sees such manipulation most of the time. No matter what is the market sentiment, bullish, or bearish. You can see volume rising on any trading platform.
Unpredicted Price Fluctuations
A stock market manipulated by program trading will cause unpredicted fluctuations. Ask and bid price will fluctuate faster than before. Direct market-access will be more available for global financial firms.
Your trading strategies will start rising transaction costs. Foreign-exchange traders can relate to it better than anyone else.
Always Look At Doubtful Stocks
Some stocks are always at the target, they are like the regularly used tool for stock market manipulators. So if you pay close attention to them, you can find manipulation.
Stop, if you notice something awkward in doubtful stocks. There can be something fishy in the market.
Doubtful stocks will perform opposite to trading algorithms. They won't go parallel with any trading strategy. The market regulator won't know if the stock market manipulated or not. Investors will find opportunities to invest in indexes and shares.
See Official Sources Of Information
What should you do when you are in doubt if the stock market manipulated or not. Must see the official buying and selling guidelines by the regulator.
The smallest and largest stock exchanges have regulators. These regulators are important in the financial industry. No matter if you are linked up with the London stock exchange or other. You can find the authorities who are responsible for regulation.
Sudden Strength to A Stock
Is valuation important when you are in doubt if the stock market manipulated or not? Keep your eyes open even during a stock market crash. Do you see any stock going up during such a harsh time?
It means there is something wrong with the market. High-frequency traders have made that particular stock rise in the market. Traders with active trading experience can easily figure it out.
Stock Market Manipulated: Is It Legal?
Some new traders or beginners ask this question. They want to know whether stock market manipulation is legal or illegal. Stock market manipulation is illegal but it is performed legally. Yes, this is the perfect answer to this question.
Influencers always manipulate the stock market. Some experts claim that the stock market is manipulated many times by influencers. But if it is illegal then how do they do it?
They do it with the help of loopholes in the trading systems. So that is why we said that it is illegal but performed legally.
Summary— Stock market manipulated
As a retail trader, you must save yourself from such situations. Because the stock market manipulated by influencers can harm you. You can have heavy losses on your investment portfolio.
Always try hard to figure out the strange things happening in the market. Make your mind always open for you to capture everything.
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