Hello Gene.
Thanks for doing this thread. Could I say a few words in praise of trading manipulation?
I would like to say that in the bidding, offering, and execution of trades "manipulation" is synonymous with "strategy". It is NOT unethical. It is no more evil or unethical than a play action pass that is intended to freeze a safety, or bluffing in poker.
Personally, I manipulate the market. I often use hidden orders on Island so as not to tip my hand. I very occasionally post bogus orders away from the inside, that I have no intention of executing, in an effort to help the stock move in my direction. And sometimes, if I am very comfortable with a slow-moving stock, I will take out a couple of 100 share orders in an effort to create a path to the shares I want to buy/sell.
Strategy, or manipulation, involves risk. Even placing a hidden order carries a small degree of risk in that there might be somebody willing to trade with you but he or she won't because they don't know you exist. It takes skill to manipulate because if somebody calls your bluff you will lose lots of money. Yet it is amazing how succesful a little well-timed manipulation involving just 200 shares can be.
There is NO GRAY AREA on this matter. Anyone who believes they have been victimized by trading manipulation are in FACT only victimized by their ignorance of trading strategy. Many times I get shaken out of stock only to see it significantly up just minutes later. Happens all the time. It is far healthier to develop an attitude in which you just laugh and say touche to your opponent at times like this. When I take a loss on a long position for example the real problem is ALWAYS that I bought too soon, that I didn't forsee the really good buying opportunity, and that SOMEONE WAS SMARTER than me.
A useful distinction is between manipulation in the market itself and manipulation in the media away from the market. The former is strategy, it it ethical, normal, and without it people simply wouldn't trade intraday, which would create liquidity problems for investors. The latter, manipulation in the media, is where unethical behavior occurs. It is there where you have people and firms pumping a stock they intend to dump; companies claiming to have revenues that don't exist, and so forth.
To anyone interested in trading BB or pink sheet stocks: you must accept manipulation and attempt to understand both the always-ethical trading type and the sometimes-unethical media type or you will not be successful. It's your call. |
