Market trading in the washout behavior, is investors in the pursuit of profits on the road from time to time encountered sinister test. The washout, that is, through a series of clever techniques, the main investor attempts to manipulate the market sentiment, thus leading investors to blind trading, for their own profit. In this market storm clouds, the common main washout maneuvers are endless, we need to understand its connotation in order to improve risk awareness.
First, pull high after selling (Pump and Dump)
This is one of the most typical washout techniques in the market. The main investor through a large number of specific stock purchases, pushing up the stock price, creating a market heat. Then, they quickly sell off their holdings, causing the market to panic, investors to sell, and the stock price to fall sharply. This technique is often accompanied by hype or false information, allowing investors to trade in an irrational situation.
Second, short-term lifting
Short-term lifting is a rapid increase in stock prices, and then sold at a higher price maneuver. Through a large number of buying in a short period of time, the main investor to create a bullish market, attracting investors to chase high. And then, they quickly sell, pull down the stock price, will chase high investors in a loss situation.
Third, false good news
Releasing false good news is a common technique to create a buying atmosphere in the market. In this case, investors may be stimulated by the good news and enter the market in droves. However, once the stock price rises to a certain level, the main investor may suddenly sell off, causing the market to collapse.
IV. False Positive News
As opposed to false positive news, the release of false negative news aims to create panic in the market. By releasing false bad news, the main investor guides investors to lose confidence in the market, leading to panic selling, thus pulling down the stock price. And then, the main investors may buy at low prices, waiting for the market to gradually recover.
Fifth, large closed orders
Manipulating market trading through large buy and sell orders is another common tactic of the main investor. Large block orders can create a huge impact in the market, leading investors to follow the transaction. However, this may also be a front, investors need to be wary of making blind decisions under such manipulation.
Six, abnormal pull up
Through a large number of stock purchases, creating anomalies, triggering market enthusiasm, is another technique of the main investor. Investors see the market unusual, emotional impact, chasing the trend. And then, the main investor may quickly turn to sell, causing investors to fall into a loss.
These washout techniques may seem different, but the common denominator is that the main investor through the creation of market mood swings, leading investors to make irrational decisions. So, as investors, we should be how to avoid the traps of these manipulation techniques?
First of all, stay calm and not be swayed by market emotions. For sudden news, you should conduct in-depth analysis and verification, rather than blindly follow the trend. Second, establish a sound risk control mechanism and set reasonable stop-loss points to guard against the impact of drastic market fluctuations on your investment portfolio. In addition, review the investment portfolio regularly to maintain sensitivity to the market and make timely adjustments to the investment strategy.
In times of market turbulence, investors need to remain vigilant and not be confused by the surface phenomena of the market. Although it is difficult to avoid washout behavior, through prudent investment and in-depth research, we are better able to withstand the risks of the market and move steadily towards the path of investment success.