Conspiracy theory on the market makers

Beginner Questions
1

Isn’t it too dangerous for investors or traders alike to think the same?
Like what masses are thinking? Isn’t such a pack instinct reason for so many poor people and so few rich people? Like Gold for example but there are many more cases where we can see it. Most of people are so very naive. When all of people are thinking the same we have balloon. In this moment BIG investors are selling gold or will do that soon.
Conspiracy theory is about how to take money from the masses and
convert it too few big investors. Big investors always think different (opposite) than “small” people.

Sometimes we can see info’s on internet regard manipulating days on market.
Some trading groups have statistic regard those days to be prepare on that or
not to trade in such days. Idea is that some potential big movers on market
(some banks) have agreements when and how to manipulate market to earn
as much is possible big profit.

2

I think your also missing the fact that there are followers of a trend and the polar end the contrary traders. Obviously one has to feed into the other right?

One has to buy from someone and they get those shares from someone who will sell at that price. Big investors have plans, multiple positions at different levels and it shows when you see spikes because its typically some big dog not all maybe jsut one that is defending that particular level because they have seeded interest above there or their just not out yet or their not in yet!

It’s not so much conspiracy as it’s not commonly passed knowledge and your right it’s not hard for say Bank of America says, “Hey JPM our quarterly payroll is due in 2 months in our foreign or local holdings or whatever mind buying some DX futures to push the EUR/USD down, or whatever foreign place it is, to inflate the price which we’ll TWAP.” If JPM says, “Yea bro” then they’ll buy it and when it heads up to a point they like or their TWAP is finished price has already soared, JPM’s not dumb they’d pair off some of their orders as well but if they were to collapse their position it’d case a nice volatile spike in the market down for the DX which means higher EUR/USD, or whatever foreign/local place it is, which means they had just made money off converting it to pay their employees or whatever they intended.

It’s confusing to understand but if you can understand how they play these games or have an idea this is where the pack mind finally realizes like OH MY GOD! It’s going up so they pile in or This is the HIGH! Pile in the shorts. When the pack mind figures out what your doing obviously they want a slice and if more and more join its just a huge dog pile right which in turn adds extra strength to moves which you can ride in on if you understand.

Also since now a days everyone says “GUYS GUYS GUYS I GOT THIS REVOLUTIONARY NEW SYSTEM!” Chances are pretty much 99.9% It’s been done so in the sense your going to run into similar systems that can coincidentally be similar to what big money is doing.

If this seemed a bit scattered sorry my mind is like left and right today and this was the most focus I was able to muster today

3

I reserve the right to be wrong!

But I believe the market seeks stops. If you are doing what everyone else is doing your stops will be in the same place as everyone else so you will be stopped out.

The big boys move the market and will not move said market til they’ve eaten enough stops…

The majority of people will never win.

Sorry to say I kinda like it like that.

4

The majority will fail as they follow the same advice given to them by others who failed. One trader I respect told me that if you want to succeed you need to be in the minority. There is only so much room at the top and the majority follows poor advise because it is safe for them and that is not how you make money.

5

Many retail traders do not believe that ‘manipulation’ exists:

From today less than 2 hours ago:

BBC News - Swiss regulator investigates banks over foreign exchange deals

6

Well it exists but just look at the EUR/USD that market is so liquid that even if some banks use dirty tricks the market will be invulnerable to it, it is so big and liquid that nobody alone can alter it.If a bank cheats and uses other exchange rates is probably to steal money from exchange rate differences, but this operation to modify the forex markets, no way.

7

Market manipulation does exist though not in the way you would think…when it comes to the Fx market, it is huge and frankly, one of the best examples of a decentralized market. So manipulating this market is not going to be easy or possible…
Though of course the big banks do have an edge over other players from being able to access global cues early to opening large orders…so to an extent, they do have an impact…

8

Yes Proximus, both cheating and manipulation exist, imo they are separate but can overlap.

Richard D. Wyckoff wrote about manipulation in the market back in 1910, many thought he was speaking of cheating, he clarified by pointing out that it is market behaviour - like a consciousness - among traders, they will ‘manipulate’ price to an area for later gain.

In more recent times a line seems to be sometimes crossed where ‘manipulation’ or ‘engineering’ as some refer to it could become cheating, the cheating is in my view small, the ‘manipulation’ is more important in that it can be traded, firstly by learning that it can happen, then learning how to recognize it and lastly by learning how to trade it.

9

What some fail to realize is that the daily turnover is in excess of $5 Trillion. Manipulation exists and is primarily conducted by central banks, but even if a few banks get together and decide to act they don’t have the firepower to cause a change in trend. You can throw $100 billion at it and yes we will see a candle or two which spikes, but in the end things tend to get back to normal. That is at least my experience.

10

Hang on a moment, nobody but the speculators are trading forex for its own sake. Surely the biggest trades come from trade?

I mean the transfer of goods & services from one country to another in return for a financial instrument.

In my day job I spend, for example, a million USD in China. I have to buy USD with my local currency, send it to China, where they convert at least some of it to their own local cash.

I am one of billions doing this every day, doesn’t that type of activity really create the market?

sure, there are big speculators, but a couple of hundred pips movement wouldn’t be enough to affect international trade by itself. It’s when the Aussie dollar goes from par to .91, all of a sudden you weigh up sending business to Australia instead of China.

Or when the Italy’s government starts looking like a banana republic, and one has proposals from both Italian and Slovakian manufacturers, a bit less money (measured in millions at least) will flow into Italy.

I feel speculators of any size are making money off movements, not creating the movements. Don’t forget that at the point or even pip level we are looking at currency under a high-powered microscope. Assume a suit sold in the USA for $500 is bought from a design house in the USA for $250, who gets it from an import/export agent for $125; they’re probably buying it in Taiwan for no more the $63, landed. This is not a fictional example!

If the currencies involved move up and down by 200-300 pips, the impex agent’s margin isn’t affected enough to change his life.

So when Draghi speaks, the big speculators can make a spike in the Euro that lasts a few hours; the impact on world trade is minimal.

No venture survives very long if it doesn’t provide some value to society. The service we as speculators, big or small, collectively provide society is that our liquidity facilitates the transactions needed by world trade.

I’m an unapologetic capitalist / globalist. The creation of trade and improvements to the quality of life for those very few who have the ambition to do so, creates the movements of goods and money that allow the world to function. There are terrible abuses happening in the 3rd wold, granted; but in general there are a lot of people who would starve if they couldn’t provide low-cost labor to the G8 (or G20, if you insist).

The banks aren’t big enough to manipulate the world. Anyone can get ahead, in Forex or otherwise, on condition:

  1. they really want to get ahead, enough to do something they’re not used to doing
  2. they deliberately come to an understanding of themselves
  3. they live their lives with self-discipline
  4. they approach life scientifically (IE, everything that happens is the effect of some cause; what is the cause?) and learn from their mistakes
  5. they take responsibility for everything that happens to them
  6. they understand that success takes years of persistance
  7. they set goals for the long, medium and short term and review them regularly
  8. they understand that success is a bit subjective to one’s circumstances. I can’t reasonably expect to be the next Bill Gates; but I can expect to get out of debt and leave something to my kids. In some countries, that level of success is unattainable, but one could, for example, expect to go from 3 meals a week to 5, or even go from (as an African friend of mine did) go from living in a sheet-metal tin shack to living in a house that would barely be called that in America but was a huge step up nonetheless.

No bank or government can stop that kind of person.

11

If the market is being manipulated, then the majority are bound to lose in the world of forex. I think the market is being manipulated by few investors like banks and other financial bodies. So, far we are trying to grab the best we can, wherever possible, right?

12

You lose because your strategy or your attitude towards trading, in general, is crap, no offence, but thats the truth.Most guys when they learn about trading, are from advertized banners from sites where brokers lie all sorts of stuff there, and the guys take the beat, the broker promises 1000$/day of some sort of stuffs, but the guy never reads the small text like:
[B]“Trading foreign exchange on margin carries a HIGH LEVEL OF RISK, and may not be suitable for all investors”[/B]
So they underestimate the risk and overestimate the winnings, true that forex can make you a millionare but not with this attitude.If you trade manually you must have a discipline of a soldier and much willpower.Many guys dont even bother learning the basic stuffs like trendlines or S/R levels detailed they just watch a few videos here and there and they think they can beat the markets…They cant.But those who put their ass to work and study the market in detail will win and become millionaires while the poor guy will get angry after losing all his cash and quit.Dont forget 80% of new millionaires are self made so with trading there is a potential that anyone can become rich but not anyone has the guts to do it.

So responding simply to your question short, the brokers or the market has nothing to do with your succes, i think there is some manipulation but not that much that it should affect your succes, and of course make sure your broker is legal and registered and most importantly oversighted by a good agency, and after that it is all up to you,so wish you succes to your trading! :57:

13

+1 on that, actually +2 and then some!!!