#2024WithBinance Tips to Avoid Market Manipulation
Market manipulators, also known as “whales” or malicious actors, use tactics to influence prices through massive buying or selling volumes, often with the goal of triggering psychological reactions in traders. Here are some tips to reduce the impact of their manipulations and make informed decisions:
1. Analyze order book volumes and depth:
Manipulators' tactics:
Using "fake walls" (buy or sell walls): They place large orders in the book to create the impression of high demand or selling pressure, then cancel them before they are executed.
How to avoid:
Observe actual volumes executed in the market (trade history), not just order books.
Avoid reacting to large "unfilled" orders unless they are confirmed by trades.
2. Do not rely solely on rapid price fluctuations:
Manipulators' tactics:
Pump and Dump: They buy massively to artificially increase the price, then sell quickly to make a profit, leaving small investors with losses.
How to avoid:
Don't buy an asset just because it's rising rapidly.
Analyze technical indicators (RSI, MACD, Bollinger Bands) to confirm if the move is sustainable or if it is a manipulation.
3. Diversify your sources of information:
Manipulators' tactics:
They spread fake news on social media or forums to create hype or panic.
How to avoid:
Always verify information from multiple reliable sources (e.g. official announcements, recognized platforms).
Beware of unconfirmed rumors.
4. Use automated or disciplined strategies:
Manipulators' tactics:
They exploit traders' emotions to provoke impulsive reactions.
How to avoid:
Set stop-loss and take-profit orders to limit losses and secure your profits.
Use trading bots to execute your strategies in a disciplined manner, without being influenced by sudden movements.
5. Monitor indicators of potential manipulation:
Common tactics:
Disproportionate volumes: A sudden increase in volumes may indicate manipulation in progress.
Uncorrelated Prices: If an asset moves against the general market trend, it may be suspicious.