How do whales use fake walls to manipulate the prices. Can we ride those whales and profit?
cryptocurrency·@hmushtaq·
0.000 HBDHow do whales use fake walls to manipulate the prices. Can we ride those whales and profit?
I was recently seeing [this video](https://www.youtube.com/watch?v=NvsgWeeGXig) on youtube on the topic of High frequency trading. The guy was telling about trading volumes on the buy and sell side, and how it is the most important metric for high frequency trading. I didn't really bother to understand the whole video, but one thought that came into my mind was that whales could actually manipulate the prices by putting fake sell or buy orders.  [image source](https://bpcdn.co/images/2018/01/02090607/whale-watching.png) Now, imagine you are a whale, and you put a huge buy order at $100/coin for a coin. Now other people who are trying to buy that coin would notice the wall, and try to bid at higher prices. After a while, that whale would cancel its buy order, and start selling its coins. In other words, that whale artificially inflated the price, so that it could sell its coins at a higher price later on. It could also do the same thing in reverse to buy coins at a cheap rate.  [image source](https://karsle.files.wordpress.com/2015/03/whale-rider-desktop1024x768.jpg) There are some good answers given also in [this reddit thread](https://www.reddit.com/r/BitcoinMarkets/comments/1y1xxh/how_do_whales_use_fake_walls_to_influence_the/) about this topic. While we can't be whales ourselves, at least we can ride them. By riding I mean noticing such walls and taking actions accordingly. For example, in the case of a bid wall, we should not bid much higher than the wall itself, but bid just a little over it. This is only possible, if you do the bid quickly after seeing the wall. Later on, when the price goes high, you can sell. Doing this sort of trading manually would obviously be difficult. However, using some intelligent algorithm, I think this can be done effectively through a program. ___ So, what do you guys think? Is it worth the time trying to make such a program?