[Tradewinds]

Originally Posted by MightyMouse »

Either is fair game. You do not have to sell or buy a security if you do not want to in the market and if you bring money to the market, you should be wise enough to understand how the market participants attempt to get the best price for themselves. You do not have to buy or sell, you can walk away.

When you approach a person selling a car, you have every right to check the car over before you buy it to assess whether you want to pay $10k for it. If you do decide to pay 10k for it, that is not price manipulation, it is very good salesmanship if that car is actually only worth $5k. If the individual does not want to let you check it over, then you should walk away.

In trading it is our decision that gets us in or gets us out. The market is constantly advertising both sides, attempting to sell us on why it is a good time to act. If we buy the BS, then we probably will end up with a lemon, just like the car buyer.

MM

Is there any situation that you would call price manipulation? Because I get the impression, that you are saying there is never such a thing as price manipulation. That price manipulation is totally non-existent. Are you implying that there is no such thing as price manipulation?

Actually, I could technically agree to that, depending upon how "price manipulation" is defined.

Now we are getting deeper into the details and meaning "price manipulation", predator mentality, and what should be allowed or not allowed. And it's not just about trading.

I guess what you are saying, is that the deciding factor, is a person's freedom to make the choice or not. If someone held a gun to my head, and said, "You WILL pay $10,000 dollars for this car that is not worth more than $5,000, or I will shoot you in the head." then would it be price manipulation? The person handing over the money, had a severely overwhelming influence to make a decision a certain way. However, even with a gun to your head, and the threat of death, technically, the person paying the $10,000 for the $5,000 car was still making a decision of their own free will. They just might die for their decision. So even in that case, you could say it's not price manipulation, because they could choose to die. I just want to make it very clear to people reading this, that what I just described is not my perspective or mentality towards the situation. I'm trying to point out a possible view point as a way to define, and compare and contrast different perspectives.

It's the age old question of "where do you draw the line?". Where I draw the line is: "If it promotes long term, sustainable and constructive behavior, then it's good." The intentions and desires of selling a $5,000 car for $10,000 does not promote long term constructive behavior. There is a high probability that it will cause hardship, difficulty, anger, feelings of injustice, feelings of revenge, hatred and conflict. So far, situations like selling a $5,000 car for $10,000 haven't stopped the world from turning, or caused the human race to go into decline, or disappear. The case could actually be made, that predation and excessive gains at another person's expense, is actually good for the long term survival of the human race. Kill off and suppress some of the population for the greater good. Unfortunately, things like predation, usury, exploitation, manipulation and abuse don't seem to be forecasting a very good end to the human race. Ultimately, it's not going to end well.

[SIUYA]

interesting side note on market manipulation....
at most exchanges its deemed inappropriate or out right illegal. Putting in false bids and offers (spoofing) to lure people into trading. Many operators and brokers have been pulled up on that by the regulators.

However if you look at the recent advances in algorithmic trading thats is exactly what they are generally designed to do....flush out orders and snip snip snip between them.....and yet the exchanges dont seem to think that this is market manipulation.

From an old school perspective, and many of my colleagues agree....its exactly the same. Its just that in the old days the operator was a human, and now its a computer.

However on saying that, I dont watch volume, I dont care about the numbers of buyers and sellers showing as I know that the market is formed only by the price action of the trades.....and so the market manipulation side of it is irrelevant to me. My view is if you are showing in the market and are live then it irrelvant until you trade.....ever had the problem of being in the cue and not getting set at the low, even though it traded there....?
potential means nothing, deal with the reality.

(This also ties in with my ideas of the market that they can go up and down based on a lack of traders on the other side - sort of like a vacuum. (others say the same things but in different ways)
example; trading the SPI (Australian equity market futures index) look at a 1 min chart recently. Even though the market has been going down the last week, the index often fell slowly, and yet got sucked up very quickly - say 30 mins to fall 30 ticks, and then rallied back 20 ticks in 4 mins.)