The operator uses various techniques to profit by creating market fluctuations and exploiting retail investor psychology. Here are some common techniques:
1. Surge selling
After the operator absorbs chips at low levels, they create a strong upward trend by continuously raising the price, guiding retail investors to chase. When the price reaches a high level and attracts a large number of retail investors to buy, the operator begins to quietly sell in batches, ultimately pushing the price down, causing retail investors to be trapped.
2. Matched orders and increased volume
The operator buys and sells themselves to create increased trading volume, attracting market attention. Matched orders mislead retail investors into thinking that a substantial market trend is about to start, causing them to follow in and the operator takes the opportunity to sell. This technique is particularly common in small-cap cryptocurrencies, where the trading volume is falsely inflated.
3. Wash the chips through fluctuations
During the rising process, the operator will create a pullback or sharp fluctuation to induce panic in retail investors holding cash, prompting them to sell at low prices. Through this method, the operator can clear subsequent resistance to the rise, reduce selling pressure, and absorb more low-priced chips.
4. False breakouts and false breakdowns
The operator will create false breakouts or false breakdowns in the market. For example, within a price range, the operator first fakes a breakout above, making retail investors think a significant rise is coming, then quickly pressures the price down; or falsely breaks below, scaring retail investors away while the operator absorbs chips at low levels. This method repeatedly strikes retail investor confidence, ultimately allowing the operator to control the chips better.
5. High-level horizontal selling
The operator continuously maintains a horizontal fluctuation at a high level, attracting retail investors to believe the price will continue to rise. When retail investors continuously enter the market, the operator slowly sells off the chips in hand, ultimately leading to a price decline, trapping retail investors at high levels.
6. Positive news combined with a surge
The operator will release positive news before selling, such as product launches or partnership announcements, to attract retail investors to buy. When retail investors chase the highs, the operator takes the opportunity to sell off during the good news, ultimately leading to a price drop or even a crash.
7. Smash the market to wash chips
After completing chip absorption at low levels, the operator triggers panic selling through significant price drops, further attracting retail investors to panic out and collect more chips. This method usually comes with a large number of panic sell orders to clear the market's floating chips.
8. Series of 'cutting leeks'
The operator repeatedly operates to cause the price to fluctuate sharply within a range, profiting through high selling and low buying. Retail investors gradually exhaust their funds through multiple chasing highs and cutting losses, being continuously 'cut' by the operator.
9. Late trading surge and smash
The operator attracts retail investors to continue following operations through sudden surges or smashes at the close. Especially when the daily level suddenly rises or falls, leading retail investors to misjudge the next day's trend, further manipulating the market movement.
The core of these techniques is to exploit the fear and greed psychology of retail investors to obtain profits. To avoid being 'cut', controlling emotions is key; do not chase highs or cut losses easily, maintain patience, and avoid blindly following market sentiment.
How to identify
To identify the nine techniques of the operator's 'cutting leeks,' one can start by observing market trends, trading volume changes, price reactions at key positions, and market sentiment from multiple aspects. Here are specific identification methods:
1. Surge selling
Identification method: When the price rises rapidly and shows a one-sided trend but the trading volume does not continue to increase, or starts to frequently increase at high levels, caution is needed. This usually indicates that the operator may be gradually selling off. Additionally, one can observe whether the speed of price increase is unreasonable; if the rise is too fast without significant pullbacks, it is likely that the operator is inducing retail investors to chase.
Key point: Pay attention to trading volume changes when the price is at a high level. If the trading volume unusually increases at high prices, or if there is a divergence in volume and price after consecutive rises, it often indicates that the operator is selling.
2. Matched orders and increased volume
Identification method: The trading volume created by matched orders generally suddenly increases at key price positions, but there is no significant price rise or fall, resulting in a large trading volume without substantial fluctuations. One can also observe whether large buy and sell orders frequently occur in a short time while the actual price changes little, which is a characteristic of matched orders.
Key point: If there is a significant trading volume but no substantial price rise or fall, it may indicate that the operator is buying and selling to create an active atmosphere, attempting to attract retail investors' attention.
3. Wash the chips through fluctuations
Identification method: During the wash, the price frequently fluctuates within a certain range, and each decline is significant but quickly recovers, with trading volume being unstable. During the wash phase, the price often receives support at mid-term and short-term support levels, and the long-term trend is not broken.
Key point: Pay attention to whether the price can always rebound during significant fluctuations. If it quickly recovers after breaking support, it may indicate a wash, as the operator uses fluctuations to clean up floating chips.
4. False breakouts and false breakdowns
Identification method: False breakouts or breakdowns usually occur at important support or resistance levels, accompanied by large trading volumes, but then the price quickly returns to the original range. False breakouts usually have a period of horizontal accumulation beforehand, and the rapid retraction after the breakout is different from a normal pullback.
Key point: Pay attention to sudden breakouts or breakdowns at key positions of the price. Especially if the breakout does not sustain and the price quickly retracts, this is often the operator's inducement to buy or sell.
5. High-level horizontal selling
Identification method: When the price maintains a horizontal trend at a high level, and each rise is accompanied by high trading volume while the decline has low volume, this is a typical sign of the operator selling. Especially if the trading volume significantly increases during the horizontal period but the price does not rise, it indicates a higher possibility of selling.
Key point: If the price is in a high-level horizontal trend and there is frequent volume but the price does not rise, or if the price slightly rises and then falls back, it indicates that the operator is gradually selling.
6. Positive news combined with a surge
Identification method: When positive news suddenly appears in the market and the price rises rapidly in a short time but then experiences a volume drop, it indicates that the operator may be selling based on the good news. Special caution should be exercised with news lacking fundamental support or 'insider information.'
Key point: Pay attention to the price performance after positive news. If there is a brief rise followed by a quick retreat, it may indicate that the operator is selling based on the news.
7. Smash the market to wash chips
Identification method: Smash the market to wash the chips usually occurs after the operator completes a certain amount of chip absorption. The price will suddenly drop significantly with increased trading volume, triggering panic selling, after which the price quickly rebounds to the previous price range. If the price is accompanied by a large number of buy orders during the decline and then quickly rebounds, it indicates that the operator may be creating a wash.
Key point: Observe whether the price rebounds quickly after a sharp drop. If the decline is rapid and the rebound is also quick, this may indicate the operator is washing out the chips.
8. Series of 'cutting leeks'
Identification method: This technique is characterized by the price frequently fluctuating within a certain range, with each fluctuation accompanied by increased trading volume, but the price change is not large, showing a wave-like trend. The operator sells at the top of the range and buys at the bottom, while retail investors often get trapped by chasing highs and cutting losses.
Key point: Pay attention to the phenomenon of repeated range fluctuations in price. If there are frequent large fluctuations within a range without breaking the range, it is likely that the operator is inducing retail investors to trade frequently.
9. Late trading surge and smash
Identification method: Late trading surges and smashes usually occur just before trading time ends, with sudden large fluctuations but no accompanying trading volume. The next day's opening then shows a reversal. This surge or smash is to guide retail investors to misjudge the next day's trend.
Key point: Observe unusual price movements near the close, especially significant surges or declines. If there is no accompanying trading volume and the next day's trend reverses, it should be cautioned as the operator's inducement behavior.
Summary
Identifying the operator's techniques requires comprehensive judgment: High volume at a high level often indicates selling, rapid rebounds after fluctuations or smashes indicate washing, unusual trading volume and false breakouts at key points can all help in identification.