Whale strategy is a term used in the trading world to refer to the plans and tactics followed by large investors (who hold massive amounts of cryptocurrencies or assets) to influence the market and achieve huge profits. They are called "whales" because their large movements create "waves" in the market, just as whales do in the sea.
Here’s an explanation of the main strategies of whale tactics:
1. Pumping liquidity and then dumping:
Description: The whale buys massive amounts of a currency at a low price, causing the price to suddenly rise, attracting small traders to buy it. Then the whale suddenly sells all its holdings (Dump), causing the price to crash and making huge profits.
Goal: Exploit traders' greed and naivety to achieve quick profits.
2. Wall Orders:
Description: The whale places very large buy or sell orders on the order book to psychologically direct the market, without the intention of executing the trade.
The result: Traders fear breaking this "wall" and move in the direction the whale wants.
3. Spoofing & Layering:
Description: The whale places massive orders and then cancels them before execution, just to mislead the market that a strong movement is coming.
The result: Traders drift towards buying or selling, while the whale benefits from the price change resulting from the deception.
4. Exploiting news or rumors:
Description: The whale spreads rumors or exploits real news to push the market in a certain direction, while having already entered the trade.
Example: A rumor of a certain currency being listed on a popular platform, traders buy while the whale sells to them at a high price.
5. Stealth Accumulation:
Description: Instead of buying large amounts all at once, the whale buys small amounts in stages to avoid suddenly raising the price and attracting attention.
The result: Enters the market smoothly and prepares for a price surge where it makes huge profits.
✍️ How do you protect yourself from whales?
- Don't chase "green candles" without a logical reason.
- Monitor the order book and beware of large fake walls.
- Don't rely on rumors as a source for making financial decisions.
- Use capital management and don't invest your entire portfolio.
- Always set stop-loss points.