Spoiler alert! Last week, a former market maker spilled dirty deets on market manipulation…
So if you haven’t listened to episode 179, go back and listen to it now!
This week is a follow-up to the last episode where former market maker J.J. dropped some serious bombs about market manipulation…
Now our hosts — Tim Bohen, Kim Ann Curtin, and Stephen Johnson — are ready to digest what they just heard. Find out what shocked them the most from that episode and why it felt like the cops would bust through the doors at any moment.
J.J. definitely exposed some harsh realities that our hosts weren’t quite expecting.
Sure, all traders hear the rumors of stock manipulation and how you’re trading against an unknown ‘enemy’ in the market … But having it confirmed was still pretty shocking.
These just aren’t the kinds of things people openly talk about.
For Stephen, everything J.J. said was just confirmation of what he thought was going on all along…
He knew the markets have to be manipulated and rigged. If it was random, nobody would be able to profit from day trading. To him, good day traders know what the big guys are doing and follow the money.
Stephen says the important takeaway is to know the game. If you know what’s happening on the other side, you can potentially profit from it. You can learn to recognize the price action and see these tactics play out in real-time.
Stephen is actually grateful for the market makers and promoters. Without them, there would be a lot less liquidity and volatility in the markets.
What’s the Most Shocking Part?
Here’s where market manipulation gets real. Tim was shocked to have his suspicion about a market shift confirmed. For eight years Tim shorted the same pattern, until one day it stopped working…
Suddenly, stocks started ripping back up and squeezing.
J.J. confirmed Tim’s suspicions about a market shift. Although Tim knew something was up, hearing it right from a source “behind the curtain” was validation.
For Stephen, the biggest surprise was when J.J. casually mentioned they used to hold billions of shares of sub-penny stocks in offshore accounts…
The massive scale of operations, the number of shares being traded, and the amount of money being generated is staggering.
Kim was stunned to hear J.J. report that market makers and others work together in “packs.” It’s not just one lone wolf out there doing this. And it makes Kim wonder…
What Else Don’t We Know?
If market manipulation is real … What else is happening behind the scenes that we don’t know about? And if everyone has a good idea of what’s up, why isn’t it talked about more openly?
Tim and Stephen think it’s because nobody cares. Most new traders just “want to make bank, bro.” And profitable traders already know the game.
Tim also notes … If you’re a shady character with a money-printing machine, why would you tell anyone about it?
Also, J.J.’s actions were illegal. Just being part of the conversation made Tim wonder if the cops would break down the door at any moment.
Market Manipulation: Putting It All Together
There are a lot of layers to learn in trading and the markets. As you learn, you just get to deeper and deeper layers…
A lot of what our hosts discussed with J.J. might go over some new traders’ heads.
And some traders might not want to go this deep into the underbelly of the markets. It’s hard enough to learn how to trade without worrying about what might really be going on.
It’s important to stay focused.
Tim says it goes back to the very first episode of this podcast — the number-one goal of new traders should be to stay in the game as long as possible.
Get the screen time in and don’t take huge risks. If you lose $20 here and there, it’s no big deal, as long as you stay in the game.
Tim was able to recognize the shift in the markets in 2015 because he was watching the markets every day.
If what J.J. says is true, market makers are just trying to take advantage of retail traders. So every five years or so, they have to change their tactics. If you’re watching the markets every day you’ll be able to recognize when you need to make adjustments in your trading.
Ask Us Anything!
We’ll have J.J. back on a future episode … What do you want to ask him about market manipulation? Leave us a question and it could be answered next time he’s on…
Remember: if we select your question or comment as an on-air topic, you could win a SteadyTrade mystery gift box. Leave a comment below or on YouTube!
Thanks for tuning in to the SteadyTrade podcast. Stay tuned for weekly episodes featuring the hottest topics for aspiring traders.
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Kim Ann Curtin