Market Manipulation: Three Deadly Tactics That Retail Investors Struggle to Withstand
In the capital market, there is an ongoing game between market makers and retail investors. To ensure smooth operations, market makers employ various manipulation techniques, among which these three tactics are particularly lethal, leaving retail investors defenseless.
1. "Grinding": The market maker creates a prolonged bottom, with stock prices oscillating in a small range for an extended period, rising slightly and falling more often. Retail investors, lacking patience, exhaust their confidence during this long ordeal and are forced to cut their losses and exit the market.
2. "Pitfall": If the "grinding" method is ineffective, the market maker generates a rapid volume decline in stock prices, creating an atmosphere of panic. Retail investors, fearing continued future declines, hurriedly sell off their stocks, falling into the "pit" dug by the market maker.
3. "Coercion and Inducement": If the first two tactics fail to meet expectations, the market maker first drives up stock prices, offering retail investors an opportunity to break even or make a profit, leading some to choose to cash out. For those retail investors who still hold on, the market maker lets prices fall back, compressing their profits or even causing losses, forcing them to sell.
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