re: Day trading Nifty & Banknifty Futures
Many asked questions about operators and manupulators. They are not aliens from some outer space...they are traders like us but they operate in cartel.Some of the manupulations they do are as under :
1) Front Running : This is the most common and most simple manupulation.Operators have contacts with dealing rooms of brokers handling FII orders and they get to know which institution is buying/selling what today. They then take positions in advance and when the institution orders hit the market, suppose it is a large sell order, then prices drop and then these operators cover their short positions. Many will argue that FII brokers keep strict vigilance and they are not allowed to communicate fron the dealing room but this is plain false...news always gets leaked with FII name and the qty which they want to sell etc...This is a crime in US but in India it is a common everyday practice.
There are many others ...I will just name a few of the manupulations:
2) Circular Trading or "scrip chalana" in local parlance.
3) Insider Information. It is so rampart that in India 70% of big deals trading is on insider information.
4) Supporting the price : Do you know that some large industrial houses have separate dealing rooms to support the prices of their company stocks ?
5) Bull Traps and Bear Squeeze : The most remembered one was when a large bear operator who hammered a Petro company's stock before its public issue was squeezed by the company management and forced to cover at huge loss . Many old timers will know this case.
6) Concentrated Hammering : This was more used when we had open outcry system at various stock exchanges located at different parts of the country.
Apart from the above, espionage, spreading roumers and many other types of manupulation takes place regularly.
But remember that the operators walk with the heavy boots and they leave their footprints in the sand by way of volumes. So just observe price and volumes.
Smart_trade
Many asked questions about operators and manupulators. They are not aliens from some outer space...they are traders like us but they operate in cartel.Some of the manupulations they do are as under :
1) Front Running : This is the most common and most simple manupulation.Operators have contacts with dealing rooms of brokers handling FII orders and they get to know which institution is buying/selling what today. They then take positions in advance and when the institution orders hit the market, suppose it is a large sell order, then prices drop and then these operators cover their short positions. Many will argue that FII brokers keep strict vigilance and they are not allowed to communicate fron the dealing room but this is plain false...news always gets leaked with FII name and the qty which they want to sell etc...This is a crime in US but in India it is a common everyday practice.
There are many others ...I will just name a few of the manupulations:
2) Circular Trading or "scrip chalana" in local parlance.
3) Insider Information. It is so rampart that in India 70% of big deals trading is on insider information.
4) Supporting the price : Do you know that some large industrial houses have separate dealing rooms to support the prices of their company stocks ?
5) Bull Traps and Bear Squeeze : The most remembered one was when a large bear operator who hammered a Petro company's stock before its public issue was squeezed by the company management and forced to cover at huge loss . Many old timers will know this case.
6) Concentrated Hammering : This was more used when we had open outcry system at various stock exchanges located at different parts of the country.
Apart from the above, espionage, spreading roumers and many other types of manupulation takes place regularly.
But remember that the operators walk with the heavy boots and they leave their footprints in the sand by way of volumes. So just observe price and volumes.
Smart_trade
