How Market Makers Manipulate the Prices #trading #shorts

5 May 2023 · 1 min

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In this short monologue, the speaker explains how market makers can manipulate price movements by exploiting the way traders interpret chart patterns. He emphasizes that a genuine break of structure is confirmed when the candle body closes below a swing low, regardless of wick length. He then describes how traders often place stop‑loss orders just beneath swing lows, creating a concentrated pool of liquidity. Market makers can push prices down to trigger these clustered stop‑losses, effectively “taking out” liquidity and profiting from the resulting trades. The speaker uses a vivid anecdote to illustrate the profit motive behind such manipulation.

Chapters

price manipulation. This is because in order for the market to confirm a break of structure, you want to see the body of the candle close beneath the swing low. And it doesn't really matter how big the wick is. Like, for example, even here, this is just price manipulation. It is very easy for these market makers to just push the price down to take out all the liquidity. And by liquidity, I mean imagine if everyone put their stop loss right underneath a swing low thinking that it was support, and you know how support is supposed to hold. It is true, but imagine when everyone puts their stop loss in the exact same place, then wow, oh boy, the market makers can eat, right? They take out that liquidity, they take all your money, and then they can go open a bottle of wine and go to Nobu or something.