I chanced across an interesting article titled The Deadly Art of Stock Manipulation. It’s a quick low-down on how the stock markets work, and definitely worth reading. The book Reminiscences of a Stock Operator goes into more detail on how stock manipulation is done, but the article is a pretty good summary.
The 10 rules highlighted are shown below. The website goes into more detail for each point.
- All sharp price movements — whether up or down –are the result of one or more (usually a group of) professionals manipulating the share price.
- If the market manipulator wants to distribute (dump) his shares, he will start a good news promotional campaign.
- As soon as the market manipulator has completed his distribution (dumping) of shares, he will start a bad news or no news campaign.
- Any stock that trades huge volume at higher prices signals the distribution phase.
- The market manipulator will always try to get you to buy at the highest, and sell at the lowest price possible.
- If this is a real deal, then you are likely to be the last person to be notified or will be driven out at the lower prices.
- Conversely, you will often be the last to know when this deal shows signs of failure.
- The market manipulator will compel you into the stock so that you drive up its price shares.
- The market manipulator is well aware of the motions you are experiencing during a run up and a collapse and will play your emotions like a piano.
- A new batch of suckers are born with every new play.