Stock manipulation, demand and supply

[momothebored]

Hello

The way the market works in my country may be very different than what's seen in others.

It's very well regulated on the whole, but some areas of governance are left alone for whatever reason.


(i) Micro cap / small-cap penny stocks are almost always controlled by an "operator". These guys have less funds than institutions but have enough muscle to fully control a penny stock. Sometimes several prop traders or brokers backed by tycoons etc.

(ii) These operators run the whole gamut, pump and dumps, ramp-ups etc..
Here's an example of one such stock:

no fundamental catalysts, no news, nothing. But this is a very simple example of a pump and dump. There are far more complex ops that fake and fake the fake etc.

Anyway, i'm curious how to analyze these stocks from the operator's angle
(i) How would i spot signs of manipulation? Is there a good book on the common tactics out there?

(ii) I've heard the only way to understand what's going on is to look at supply and demand. i.e. accumulation, distribution etc
Where can i learn this?

(iii) How would i "pick up" on these stocks while they're being prepared for the ramp up? Increase in volume + trading range?

tyvm

 

[freevestor]

Hello

The way the market works in my country may be very different than what's seen in others.

It's very well regulated on the whole, but some areas of governance are left alone for whatever reason.


(i) Micro cap / small-cap penny stocks are almost always controlled by an "operator". These guys have less funds than institutions but have enough muscle to fully control a penny stock. Sometimes several prop traders or brokers backed by tycoons etc.

(ii) These operators run the whole gamut, pump and dumps, ramp-ups etc..
Here's an example of one such stock:

no fundamental catalysts, no news, nothing. But this is a very simple example of a pump and dump. There are far more complex ops that fake and fake the fake etc.

Anyway, i'm curious how to analyze these stocks from the operator's angle
(i) How would i spot signs of manipulation? Is there a good book on the common tactics out there?

(ii) I've heard the only way to understand what's going on is to look at supply and demand. i.e. accumulation, distribution etc
Where can i learn this?

(iii) How would i "pick up" on these stocks while they're being prepared for the ramp up? Increase in volume + trading range?

tyvm

I would take several factors into account when dealing with securities that have lower levels of liquidity to watch out for pump and dump, etc.

1. Check the charts, are the participants doing the same activities at the same time every single time they do it? That's an easy tip off.

2. Check news events or possible news events to come about the particular company. If it is a micro or nano cap that is in pharma, do you know if there's a pending drug getting approved?

3. What is the average volume on a daily and hourly basis? There are indicators that can help you with determining whether there is more or less volume than expected in the market. If you can set up a moving averages for the volume, crossovers can indicate that there is an uptick of activity from the "usual suspects". Volatility indicators like Standard Deviation and Average True Range may also prove to be beneficial.

Take a look at a few stocks that you feel suspicious about take a look at their histories with these technical indicators and check for any pre-price spike hype about the stock in the news.

 

[momothebored]

I would take several factors into account when dealing with securities that have lower levels of liquidity to watch out for pump and dump, etc.

1. Check the charts, are the participants doing the same activities at the same time every single time they do it? That's an easy tip off.

2. Check news events or possible news events to come about the particular company. If it is a micro or nano cap that is in pharma, do you know if there's a pending drug getting approved?

3. What is the average volume on a daily and hourly basis? There are indicators that can help you with determining whether there is more or less volume than expected in the market. If you can set up a moving averages for the volume, crossovers can indicate that there is an uptick of activity from the "usual suspects". Volatility indicators like Standard Deviation and Average True Range may also prove to be beneficial.

Take a look at a few stocks that you feel suspicious about take a look at their histories with these technical indicators and check for any pre-price spike hype about the stock in the news.

Number 1 is how they kill a lot of people. When the public thinks they're going to repeat, they go the other way.

Number 2 - usually the ops go independent of the FA unless there is a very good story / turnaround. Once the possibility of institutions coming in arises, the ops leave.

Number 3 - That's interesting and i think it might work.

Anyone have any ideas how to read accumulation / distribution in a chart?