10
Tips to Avoid Stock Market Manipulation
by Admin ·
Stock market manipulation is one of the biggest problem in today financial world. Even with Obama’s desperate moves to stop such acts, we must face the true reality. Not matter how safe and secure we think the market is, there are always going to those higher up that will abuse their power and use it to their advantage.
For the amateur traders this is quite frustrating. Lets say in the middle of the week, you see a strong morning session, that continues its way up. Once it starts looking stronger, heavy hands start reeling prices in and by the days close the market is back to where it started. It is quite frustrating, but you need to realize as a trader that you can beat these cheats at their own game.
These include:-
1) Spend a week studying price patterns and see when bigger lots of volume come in during the day. This is most likely the bigger players trying their hand to trick you.
2) During the day be careful of Amateur hour. This is the first hour of the day, when the new novice traders come in and blatantly start buying everything up. The big wigs know this and are normally selling positions in the morning. Try and trade with them, and not against them.
3) Always scale into positions and out of positions. These will minimize risk and maximize your gains.
4) Avoid chop time. This is around lunch time, when the big hedge fund traders go to lunch and leave their trades with their junior assistants. Although this is a quiet time on the market do not trade it. Instead sit back and watch. Chop time got its name in the old days by amateur traders who got their accounts chopped to pieces when they tried to trade during lunch time on market. It is a very dangerous practice so do not do this.
5) Always use a stop loss. There will be days when things go well, and things do not go well. Always set your stop losses on the market incase something goes wrong. This will minimize your chances of having a big loss. Take it on the chin, get up and you will live to fight another day.
6) Make sure you never trade alone. Always trade with investors that are better than you. This will help you become even better yourself. With the manipulation that goes on you will need every eye out there watching your back for you.
7) Get a mentor. Get someone who knows the ropes to teach you about how the manipulators work their magic during the day on the stock market. This can save you a lot of heartache but most importantly it can save you from losing your account.
