Major players, known as 'whales' (institutional investors, hedge funds, market makers), have enough capital and influence to manage liquidity and direct price movement. Their strategies are based on manipulations that complicate trading for retail traders. Let's analyze the main tricks.
1️⃣ Liquidity manipulations
▪️ Liquidity provocation (Liquidity Grab)
Whales know that most retail traders place stop-losses and pending orders in obvious places, such as:
☆behind local minima/maxima,
☆at key support and resistance levels.
📌 How it works:
Major players artificially break the level, triggering stop orders, absorbing liquidity.
After liquidity withdrawal, the price sharply reverses in the opposite direction.
Retail traders lose money, while whales enter at a favorable price.
🔥 Example:
The price establishes strong support at $100. Most place stop-losses just below, for example at $99. Whales temporarily lower the price to $98, triggering the stops. After this, the price sharply rises.
2️⃣ Volume manipulations
▪️ False orders (Spoofing)
Whales place large buy/sell orders without planning to execute them. This creates the illusion of demand or supply.
📌 How it works:
A huge buy order is placed, creating the impression that the price will rise.
Retail traders start buying, expecting a rise.
As soon as the price rises, the whale instantly cancels the order and sells the assets at an inflated price.
🔥 Example:
At the $150 level, a huge limit buy order appears. Traders start going long, expecting a rise. Then the order disappears, and the price drops.
3️⃣ News and fake movement manipulations
▪️ Launching rumors (Pump & Dump)
Whales can use the media and social networks to spread false information about a company, cryptocurrency, or asset.
📌 How it works:
Major players buy up the asset in advance.
Through news, insiders, or influencers, hype is generated.
A massive influx of retail traders drives the price up.
At the peak, whales sell the asset, causing a crash.
🔥 Example:
Elon Musk tweets about Dogecoin → price skyrockets → whales sell at the peak → price sharply drops.
4️⃣ Trend manipulations
▪️ False breakouts (Fake Breakout)
Traders expect that breaking a key level will lead to a continuation of the trend. Whales use this expectation against them.
📌 How it works:
The price breaks the level, activating pending orders.
After a short time, the price returns.
Retail traders fall into the trap and close positions with losses.
🔥 Example:
Bitcoin breaks the $50,000 level, traders go long. Suddenly, the price drops to $48,500 — a typical 'whale trap.'
How to protect yourself from whale manipulations?
✅ Do not place stop-losses in obvious places.
✅ Analyze volumes and liquidity before entering.
✅ Do not succumb to emotions during news.
✅ Wait for confirmation of breakouts before entering.
✅ Use the strategies of major players to your advantage.
Whales will always use their power, but by understanding their tricks, traders can protect their money and even profit from manipulations.
