Avoiding Price Manipulation in Trading: Tips and Strategies
Price manipulation is a common problem that many traders face, and it can cause significant losses. In this article, we'll discuss what price manipulation is, why it happens, and two simple ways to avoid it.
What is Price Manipulation?
Price manipulation is an intentional act of increasing or decreasing prices to cause traders to lose money. This can be done by individuals, groups, or institutions, and it can occur in any market.
Why Does Price Manipulation Occur? Price manipulation occurs because it is profitable for those who manipulate the market. They can make money by taking advantage of retail traders who are not aware of what is happening.
Example:- Check in this Chart Red Box is Perfect Example.
How to Avoid Price Manipulation in Trading:
Place Your Stop Loss Below Key Levels One way to avoid price manipulation is to place your stop loss below key levels. This means that you should not have very tight stop losses because the chances are that you will not be profitable. Instead, you should place your stop loss at a level that is likely to hold if the price moves against you.
Risk Around 1-3% on Each Trade Another way to avoid price manipulation is to risk around 1-3% on each trade. This means that you should protect your capital at all costs. You should never put yourself in a position where there is a chance that you could lose everything.
Conclusion:
Institutions and exchanges want you to lose everything, which is why they provide high leverage. However, it is important to remember that smaller, consistent gains are better than risking everything for a chance at a big win. By following the tips and strategies outlined in this article, you can avoid falling into the trap of price manipulation and become a more successful trader.
Takeaways:
Price manipulation is an intentional act of increasing or decreasing prices to cause traders to lose money.
Price manipulation occurs because it is profitable for those who manipulate the market.
To avoid price manipulation, place your stop loss below key levels and risk around 1-3% on each trade.
Smaller, consistent gains are better than risking everything for a chance at a big win.
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