I have came across a youtube video where the host was saying that forex market is now more rigged than ever as institutions, banks, hedge funds and other big fishes are using AI tools to hit retailer’s stop-losses and
and deliberately showing trading opportunities to trap people and take their money?
How true is that?
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The forex market is so big that the profit the major multi-national banks would make from rigging the market against private retail traders is microscopic. They compete against themselves and they take advantage of price fluctuations to gain an edge over their competitors. We are not their competitors.
They are like articulated lorries thundering along the motorway, competing with each other to make the speediest deliveries. They don’t even see us. All the same, if you try to walk across the motorway on foot, you will probably be crushed.
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Sorry, but videos making wild claims like the Fx market is rigged are nonsense. The only reason why a retail trader’s stop loss will be taken out is basic auction market mechanics. Say the retail trader as an example traded a moving average crossover and bought EURUSD on the crossover signal. Maybe their risk management strategy tells them to always place 100 pip stop loss. Next for whatever reason there are many aggressive sellers all interested in selling EURUSD and very few buyers even on the supply side with resting orders. Naturally the mechanics of the market will cause price to fall instead of what the retail trader hoped for simply because a moving average crossover told them to buy.
Then once the price drops to their waiting stop it will be executed.
At the end of the day the FX market is an extremely complex and unpredictable market due to countless variables for each individual transacting.
I would say that the markets are not rigged by the banks, however I think the big banks can have an advantage in terms of speed of transactions and maybe getting a look at the processing queue for orders and maybe being able to slip an order in before the others. The banks do not care if YOU make or lose money, they only care if THEY make or lose money so do not think that they are targeting you because they are not, they do not care about you.
It is rigged. Banks like HSBC and Citi (?) have been hit with fines for price manipulation.
But to use it as an excuse for trading results, it’s just sad and dumb.
Institutions do not give a crap about the retail’s money. It’s not even pocket change to them.
I think it’s true to some extent and due to rigging we may notice some price manipulation.