The first thing you do when you see a coin pumping, you run and jump on board hoping for some extra fast cash...
But as a matter of fact, you're making a huge mistake and actually costing yourself money...
Why?
Because most likely the price of an asset after a breakout will retrace back to your entry for support, before it starts heading back up to it's destinated target price.
🃏 Say you see this imaginary coin named 'X', coin 'X' is being traded at the price of 1$ which is really cheap 'over sold/discount zone/ whatever you name it..'
Market Makers sees coin 'X' in an oversold condition with a lot of liquidity on future contracts 'people shorting it.' -I'll make a post on how to identify such high liquidity contracts later-
MM 'Market makers' decide "Hey, let's go f*$k these Shorter's money and take it".
So, Market makers 'bunch of fat as$ guys with an amount of money that can capsize an oversized yacht' will go in with a portion of their money and purchase imaginary coin 'X' resulting in a huge green candle, and driving the price Say from 1$ to 1.10$
Retailers 'you& me and other uneducated traders' see that green candle, and for a moment -thinking we are the only ones who saw that green long candle- we forget our lessons in hopes of high returns, and we decide to jump in without knowing that we are jumping into a trap.
As a matter of fact, when you and i and others who jumped in 'at the price of this imaginary coin X being @ 1.10$' we are only buying the coin 'X' from 'Market makers' at the price of 1.10.
and they have sold it to us for a 0.10$ profit, so now, we 'the retailers, weak traders, you & i..." hold the asset at the price of 1.10$ and them 'The Market makers have sold us their huge bags for 1.10$, Resulting in millions in profit.
#N4G |