Market Manipulations

Market Manipulations: Understanding Hidden Forces in the Market

🔶 INTRODUCTION

Market manipulations are a key concept every trader should understand to avoid falling victim to deceptive price moves. FXAN's Market Manipulations educational document explains how large market participants use passive limit orders to influence price action without leaving obvious traces. These players strategically absorb market orders, creating hidden imbalances that can mislead inexperienced traders. With the help of Cygni 75, traders can identify these manipulative patterns, increasing their ability to trade in line with true market intentions.

🔶 WHAT ARE MARKET MANIPULATIONS?

Market manipulations occur when major players (such as institutional traders) operate in the market using passive limit orders rather than direct market orders. This allows them to influence price movements subtly, without significantly shifting the market’s volume. By "absorbing" the aggressive market orders from other traders, they hide their true intentions, keeping price relatively stable while building their positions.

However, by using Cygni 75, traders can spot these hidden manipulations by analyzing shifts in volume dynamics and price action.

🔶 KEY MANIPULATION TECHNIQUES

Absorption

Absorption occurs when passive limit orders absorb aggressive buy or sell orders from smaller market participants. In this scenario, market price appears to be moving steadily in one direction, but in reality, large market participants are preventing further movement by absorbing the orders. This can lead to a significant price shift when the passive player decides to get aggressive.

• Example: On August 5, 2022, in EUR/USD, buyers were absorbed by a passive seller who remained patient until a critical point. Once the market tested a higher level and found no buyers, the passive seller turned aggressive, causing a market collapse.

Stophunt

Stophunting is when larger players manipulate price to trigger stop-losses set by weaker traders, creating artificial price moves to flush out these positions. Once the stop-losses are hit, the true market direction often becomes clear.

• Example: On August 10, 2022, EUR/USD showed buyers taking control early in the day. However, stop-losses set by weak buyers were hunted in a rapid move, only for the market to reverse and head higher once those positions were flushed.

🔶 WHY UNDERSTANDING MARKET MANIPULATIONS IS CRUCIAL?

• Spot Hidden Moves: Identifying market manipulations can prevent traders from getting trapped by false signals or premature reversals.

• Trade with Confidence: When using tools like Cygni 75 and the Volume Terminal, traders can see beyond the superficial price movements and spot underlying manipulation strategies.

• Turn the Tables: Instead of being a victim of market manipulation, traders who understand these techniques can take advantage of the imbalances to enter trades at the right time.

🔶 CONCLUSION: THE EDGE OF RECOGNIZING MARKET MANIPULATIONS

The Market Manipulations document highlights the hidden forces that influence price movements, providing traders with the knowledge to spot and avoid deceptive market behavior. By learning these techniques and using Cygni 75, traders can gain an edge by identifying true market intentions and making informed decisions.