Review for 10/24/2024, how market manipulator take their profit.

5 日前

This article is for reviewing 10/24/2024 short position and stop loss.

Unfortunately, it seems that the price has hit my stop-loss line and dropped. However, I have no regrets.

Today, I want to talk about the reasons behind my short stop-loss and how market manipulators (often referred to as 'whales') take advantage of traders like us.

Let’s start by discussing the Blue wedge pattern.

This time, the wedge pattern, Elliott Wave counting, and the support/resistance aspects were solid.

There are generally two ways to trade based on the wedge pattern: (Number 1) entering at the top line or (Number 2) entering after the price breaks below the lower line.
In the first method, the stop-loss is tight but the profit potential is high, while the second method offers a higher win rate but with a larger stop-loss. In this case, it would have been better to enter using the second approach. this time I entered position at top of the line (red dot 68150)

After I entered short position chart move crazy. This is a classic example of market manipulation by whales.
(Number 3) The price slightly breaks above the upper wedge line and then drops sharply. Retail traders who entered short positions at the line see the price break above, they close their positions. At this moment, whales fill their own positions and then the price drops immediately.
This particular wedge pattern was even more extreme. The price broke above the upper wedge line, dropped back down, it showed a candle that seemed to suggest a move upwards again.

(Number 4) Then, it re-entered the wedge pattern, making even more traders open short positions. As more people entered shorts, the whales pushed the price upwards, causing those shorts to hit their stop-losses. The whales then filled their orders with the liquidity from those stop-losses. With this manipulation, they likely made a hefty profit.

It's a simple principle but one that manipulators use often to fill their positions. In my case, I noticed the signs of manipulation when the price first dropped and then quickly shot back up, which is when I decided to cut my losses.

I stopped out at point Blue spot. In hindsight, I should have exited at breakeven had I been more attentive to the chart.

When I sense the presence of manipulators in the market, I prefer to exit because, first, it's impossible to predict which direction the price will go, and second, they often create small candle patterns which can cause immense stress and lead to poor decision-making about the direction.