I’m sure this is a newbie question… I have been trading demo accounts for a couple months, and noticed on some of the medium intraday time frames (1hour, 4hour), the price sometimes moves more dramatically in a certain direction right before it’s life span is up, and a new candle is created. I know forex is a difficult market to manipulate, but in theory, several big players could collaboratively put in several large orders with the intention of trying to manipulate a candlestick thereby affecting the way that technical analysts read the pair’s behavior and possibly driving the price in a certain direction… right?
I’m sure it could very well just be my imagination… but I’ve learned that in the financial industry, if you can think it up, somebody is probably doing it, and never underestimate what the large players can and will do.
Look at this way whether they do or don’t, really makes no difference, if you want to trade. Increase your chances by using proper money management, trade with the trend, when momentum on your side at the beginning or end of an up or down cycle. After that . . .:51: like everyone else.
I don’t think that he’s saying the brokers are manipulating candles, but rather the big money, especially towards the end of the candle’s life (e.g. in the last 30 seconds before a 1H candle closes). That way the big money can trap candlestick / price action traders.
There would have to be some serious financial incentive to do so. THere’s no hard set rule on how much money it will take to move the markets, but we’re definitely talking excess of 100 lots in many cases to see a few pips move. For a specific fund to dump that kind of money to “trap” pure price action players isn’t very likely. It’s much easier to do that in futures on stuff like Gold and Crude Oil, where it wouldn’t take nearly as much money and many people trade those intraday and are susceptible to that sort of thing.
What’s more likely is that small variances in time make some people have an hour start earlier than others. So let’s say I see my clocks change to 3pm right now, but yours won’t show that change until another 20 seconds. Small variances in time.
Take that and apply it to how some algorithms make their trade choices based on candles/time blocks and you can see why you might see a bit more activity just before and just after when you see your clock change on the hour. If this past hour was enough to change the parameters of what the algorithm trades based on, then it will make a trade because of that and that hits the market.
So yes it’s common to see a bit more activity on the hour, but from what I’ve seen it’s not intentional manipulation as much as a time lag/variance issue combined with algo trading
The article from Huck sums it well. But i dont think it was the “big money” rigging the candlestick formation as big boys dont necessary talk to each other. More like chasing the stops. The banks do have normal trading depts and they do lose money.