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Stock market manipulation is one of the biggest threats in the trading industry. No matter how safe and secure the market is there is always risk that the manipulators will abuse their powers to their advantage and manipulate the stocks. Typically, amateurs’ traders become easy victims of manipulator’s activities.  The following reason will help you understand why you should stay away from manipulated stocks.

• One of the most common ways to manipulate stocks is to sell stocks at very low prices. While trading stocks you must avoid buying stocks that are fundamentally not sound and trading at unusually low prices. Typically, such shares are bought by manipulators in bulk quantity and then spread a rumor about a big turnaround or sale and as the share price rise the manipulators unloads the share. Buying such stocks will not only cost you more but also it will not yield any value in the market.
• While stock trading, you must be vary of trading during the amateur hours. Typically, the inexperienced traders trade during the opening hours of the market. The novice traders don’t have much knowledge about the market trends and tend to trade (buy / sell) stocks blatantly. This may include manipulated stocks. The big, experienced traders are aware of this fact and usually sell the stocks in the morning time. Try to trade with the bigwigs and not against them.
• Avoid trading the chop time. Chop time is basically the time during lunch. At this time usually, the big traders go out for lunch and leave their stocks with their junior assistants. Although, at this time of the hours, there are not much trading activities taking place, you must avoid trading. Instead you must sit back and watch the trading activities of the fellow traders. The term Chop time is derived in old days when amateur traders got their trading accounts chopped while trading during lunch time. It is a dangerous time to trade during such hours as manipulators are aware of the fact that the big traders are out and are most active during such times. Trading during these means that you are vulnerable to trade fake stocks and there is maximum risk of loss.
• It is no denying that stock trading is kind of a gambling, you would have a good trading and on certain days you would have a bad day at the market; you may end up trading manipulated stocks and suffer loss. In such case it is better to set a pre-determined mark to stop trading when things are not going you way. This will help you minimize your losses.
• Stock trading requires you to be alert always and it is practically impossible for you to maintain you focus all the time. Even a slight lapse in focus may lead to missed opportunity or getting into traps of manipulators. To avoid this situation it is advisable not to trade alone; trade with people who are more experienced than you. This will help you hone your trading skills and will prevent you from suffering huge losses due to manipulation of stocks.
• While trading it is better to have a mentor. Trade with a person who is expert in understanding the market and is aware of how the manipulators operate during the trading time. Typically, several amateur traders’ trade manipulated stocks due to lack of sufficient knowledge and end up being on the sidelines and suffer irrecoverable losses. A mentor can help you save you from losses and more importantly save from losing your trading account.
• Several newbie traders jump into stock trading business thinking that they can earn huge money. However, they are not aware of the manipulation practice and the risk involved. Consequently, they deal in manipulated stocks due to lack of adequate market knowledge and end up quitting the business as fast as they entered it. To avoid such circumstances it is quintessential to carefully study the market basics.
• While trading you must be vary of the nature of the company that you are dealing with typically, companies dealing in gems, oil companies, companies that are subject to constantly change policies have manipulated stocks. Dealing in such stocks is a big risk and you suffer huge losses.
• Stocks that show sudden increase or decrease in price tend to be manipulated.
• Avoid investing in companies where manipulators are the most active, you wouldn’t want to lose your hard earned money.

 

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