MANIPULATION IN NIFTY INDEX (Search And Destroy)This idea is inspired by a strategy often used by market manipulators called Search And Destroy from the book named " How To Triple Your Money Every Year with Stock Index Futures " (1984) .
In this book, According to Author George Angell's Search and Destroy day is "...When both previous time high and Low would be taken out..." (p.217)
In our analysis we will understand this strategy used by market manipulators with very good example of NIFTY 50 Index .
In the above chart market on 19th March market opened Gap Down by around 100 points and created a low at 14350 and from that point and it went bullish and made a good support at that level. One can consider 14350 level as a good support because market was bearish at the time of opening and it went bullish from that particular point.
Now from 14350 , market went upside and came back to that same level after taking strong resistance at physiological level of 14900
from the upside.
So if we think from the point of view of retail traders who deals in intraday trades they certainly consider that point as an support level and put their stop loss at that level for taking long trades.
But here Market Manipulators enters in the market and aggressively take price down by around 100 points and what happens next is stop loss of all the retail players were triggered at that point and now Manipulators have that enough liquidity for execution of their big trades.
At last because of big lots were bought in the market by those manipulators Automatic Rally happens and as we can see in the chart there were two Gap Ups in two days in continuation. DO you think retail traders can do this ? Definitely Not.
The term Automatic Rally means when heavy selling occurs in the market at same point to catch that liquidity high amount of buying also happens in the market and as a result of that prices goes upside.
There is a also term called Wake- off Trading . You can also relate some steps above with the phases of that concept also.
Happy Trading. :-)
Note :
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