8/2/2019 Manipulation in Forex | A Teen Trader

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Manipulation in The Forex

Markets

@aTeenTrader
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 November 28, 2018(https://ateentrader.com/2018/11/28/)  6:49 pm (https://www.instagram.com/ateentr
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Side L S… Side L S… Enginee… Hand Si… Queen… Side L S…

Manipulation

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Overview: Today we will be talking about manipulation in the
currency markets. We will talk about what is manipulation, how to
identify manipulation, and how to put utilize this knowledge in your
Categories
trading. (PS, the “natural” manipulation section is what you can here
to read) Bonds
(https://ateentrader.c
What is Manipulation? 
om/category/bonds/)
https://ateentrader.com/manipulation/ 1/6
8/2/2019 Manipulation in Forex | A Teen Trader
In currency trading manipulation is widely accepted as the tactics in Crypto Currencies
which market makers and larger institutional players do in order to (https://ateentrader.c
stop you out of your positions and cause you to lose. I personally do om/category/crypto-
not agree with this aspect of manipulation. First o , there are 2 currencies/)
di erent types of manipulation: a illegal version and a “natural”
Forex
version.
(https://ateentrader.c
Illegal Manipulation: this type of manipulation is TRUE om/category/forex/)
manipulation, this is when banks (who are liquidity providers) use
Fundamentals
the data their customers give to them as means to create profits in
(https://ateentrader.c
the markets. These types of schemes range from something called
om/category/fundam
“front running” which is when a bank will get a large order request
entals/)
from a client and expect said order to move the market. Rather than
Live Trades
filling the client first, they will front run that position and put some of
(https://ateentrader.c
their own orders in the market for the same direction and then fill
om/category/live-
their clients and as their clients positions move the market higher
trades/)
they will then get out taking home both trading profits and
commissions. This type of manipulation typically will give the Stocks
customer a worse position. (https://ateentrader.c
om/category/stocks/)
Another type of manipulation is when traders at banks will take part
in chat rooms with other banks, telling other bank traders the Technicals

positions they have, the positions their clients have and where they (https://ateentrader.c

want price to go. With all of this information it is very easy to take om/category/technic

part in profitable moves as you know what all of the traders from als/)

di erent banks, hedge funds, and other institutions are doing or

going to do. In a lawsuit filled on 16 large banks in the USA on this
manner it was stated that these traders/groups took part in
“manipulating FX prices, benchmarks, and bid/ask spreads,
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defendants restrained trade, decreased competition, and artificially

increased prices, thereby injuring plainti s,”. This is real
manipulation as it is intentionally abusing the information that these Rs 53,324 Fabric Sofa C… Left Hand Si…

banks are entrusted with. -61% -36% -72%

Some banks that have take part in this and are being sued
include: Bank of America, Barclays, BNP Paribas, Citigroup, Credit Left Hand Si… Left Hand Si… Six Seater Di…

Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan Chase,

Morgan Stanley, Japan’s MUFG Bank, Royal Bank of Canada, Royal
Bank of Scotland, Societe Generale, Standard Chartered and UBS. If Archives

https://ateentrader.com/manipulation/ 2/6
8/2/2019 Manipulation in Forex | A Teen Trader
you would like to read more about this law suit feel free to read here July 2019
(https://www.reuters.com/article/uk-forex-lawsuit/big-investors-sue- (https://ateentrader.c
16-banks-in-u-s-over-currency-market-rigging-idUSKCN1NC34J). om/2019/07/)

“Natural” Manipulation: Now for a more commonly know type of June 2019

manipulation, “Natural” Manipulation. The reason i call this natural (https://ateentrader.c
is because this is a type of manipulation that is viewed as abusive om/2019/06/)
manipulation but in fact it is just natural movements in the markets
May 2019
that must occur in order for price to move. This is a type of
(https://ateentrader.c
“manipulation” that can be spotted and one can take advantage of.
om/2019/05/)
As we all know, the markets move from order to order depending on
March 2019
how many limit orders are on the bid or ask and how many market
(https://ateentrader.c
orders are being executed. Limit or “passive” orders can be stop
om/2019/03/)
losses, limit buys, or limit sells it doesn’t matter. Market orders are
whenever you click “buy” on MT4 or what ever trading platform you February 2019
use. A Market order is instantly executed at the nearly order price (https://ateentrader.c
that has a limit order on it. With that being said, we can understand om/2019/02/)
now why the market goes from zone to zone, because these market
January 2019
buyers or sellers are weighing down on the passive buyers and
(https://ateentrader.c
sellers which causes price to move until a equilibrium can be met.
om/2019/01/)
These equilibrium can be met at support or resistance zones.
December 2018
So what makes this manipulation? Well as we approach these price (https://ateentrader.c
ranges (support/ resistances) the market may not have enough om/2018/12/)
orders directly in that zone in order to fill the need of the market.
November 2018
This will result in the market pushing price through these zones
(https://ateentrader.c
causing people to begin to get stopped out, or start selling, while this
om/2018/11/)
is happening the banks/institutions begin to take the opposite sides
of these positions by buying peoples stop loss positions and buying March 2018
peoples short positions. This will allow banks to begin accumulating (https://ateentrader.c
orders and begin to shi the markets into a bullish manner and as om/2018/03/)
price begins to shi into a bullish manner, the sellers will begin to
February 2018
have to close their stops due to heavy losses and the banks will
(https://ateentrader.c
gladly sell some of their positions back to them closing profits. This
om/2018/02/)
is a continuous cycle and happens all day every day. It happens on
January 2018
the 1h and the daily.
(https://ateentrader.c
USD/JPY 1h om/2018/01/)

December 2017
(https://ateentrader.c
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8/2/2019 Manipulation in Forex | A Teen Trader
As you can see above, here is MANY MANY MANY examples of what om/2017/12/)
this will look like throughout a few days/weeks. The market will
June 2017
continuously break di erent zones stopping people out/executing
(https://ateentrader.c
sell orders before reversing large amounts. This is what is happening
om/2017/06/)
to your positions when you say you got stopped out before it moved
your way.

These types of moves even happen on daily time frames, but most of Stock Market Quotes

you most likely never even notice.

Goddess of the Market

Day Trading the Currency

How to Avoid this?  Market

Stock Market Investment

The best and most e ective way to take advantage of this and avoid
it is to know. Know if there is news  events coming out that may
cause institutions to need to flush the market will sells before
switching to buys, know how the di erent cycles of each day play
out, and know how to identify market structure/trends. Trends don’t
last for ever and it is VERY typical to see a clear manipulation play
right at the end of a nice long trend. Why? Because for the market to
flush out large amounts of sellers, they must first have price drop
before starting the uptrend. Varmora Designer Chair Set of 4 (Cl
(3)
Rs. 4,730.00 (details + delive
EUR/JPY 1h

Above is the same, market moves above or below zones before

executing LARGE moves. As you can see, these moves always happen
in NY and London, but a lot of these fake outs/manipulations ALSO
happen during di erent NY and London sessions. The point here is
that you must understand which type of day it is. Is it a slow large
move type of day? if so, do you see any signs of prior 1-2 day
manipulation moves? If it is a slow day do you see any potential
manipulation moves happening?

Conclusion:

To conclude, there are 2 types of manipulation 1 in which is blatantly

illegal and the other in which is a necessary function of the markets
in order for it to create enough orders for it to move. Yes, i am sure
that some of these manipulation moves are associated with each
other as these large bank manipulations will take advantage of this.
All in all, in order to take advantage of these manipulation events,
https://ateentrader.com/manipulation/ 4/6
8/2/2019
you must be aware of all that is happening inManipulation
the markets in Forex | A Teen Trader
and be
able to identity your zones and how price is reactive in and past your
zones. I hope this all helped and happy trading! Feel free to reach out
and ask questions if you have any!

IF YOU HAVE ANY QUESTIONS, COMMENT OR CONTACT ME!

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A Teen Trader is an educational Site Only, The contents included in this website is not investment advice and are not meant to be taken as investment

advice. Risk what you can a ord to lose

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