Forex Market Manipulation

Do you think there is any forex market manipulation?

Consider the following scenario, you represent a major US corporation and you are about to buy a UK based manufacturing company (LOL)  to add to your portfolio. You will need £400,000,000 to complete the transaction and of course you want the best rate possible when you execute the transaction. The GPB/USD is trading at 1.5161 and you would like to buy GBP at 1.5050 average. You call your friendly bank and instruct them to by £400,000,000 at an average rate of 1.5050. Now this represents substantial commission for the banker and a great opportunity to make some extra dosh (mullah, money, dough etc).

So, here is what our friendly banker does, he sees that GBP is trading at 1.5161, he knows that he has a solid buyer at circa 1.5050, so he chooses his moment and starts shorting GBP/USD, as he is shorting at a decent pivot, Fib or resistance point, he is joined in by others. Others who follow him as he is now the axe. Our banker sees that it’s working and he shorts more, the GBP continues to drop, he trades in and out with a net increase in shorts until the price has dropped to 1.5050, he continues shorting and the price drops to a known support level, say at 1.5010, now he starts buying for you, your £400,000,000, step by step and manages to get you in at an average price of 1.5042. You are happy as Larry, the banker is happy as Larry, you got a good price and he made commission and 140 pips profit, easy money.

Now, if you knew there was a massive buyer at a certain level and that buyer had to have the money on a particular date, by a particular time, how easy would that make your trading? how to trade forex?

So is there any Forex market manipulation going on? You bet mate. Can you profit from it, yes you can but not without a good idea of M&A details, costs, dates etc.

If you are a full time day trader or even part time serious trader and haven’t yet invested in a decent news platform, now is the time to do it.

Good Day

Mark

Bob Iaccino Webinar – Daily webinar with Fundamental and Technical outlook and recommended trades.

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