Are Forex Markets Manipulated?

and if they are, does it really matter to the individual short term trader?

FOREX MARKET Are Forex Markets Manipulated

The financial news today is full of articles indicating that there is market manipulation going on in one market after another. There seems to be as many ideas on the subject as there are traders. Everyone seems to have their own point of view. So not to be left out, I decided to develop my own point of view.

Please note that my trading method is short term. My typical trade is minutes or, occasionally hours in duration. The rationale I present here may not be applicable to longer term trading.

First of all, like almost everyone else in the world, I do not know for sure whether any market is manipulated – or not. I have long held the opinion that the precious metals markets, gold and silver specifically, were manipulated. The reports from the CFTC, the agency responsible for regulating futures markets, clearly have shown naked short positions by a single entity at near the forty percent level of the silver market. To me, a naked short position of 40% by any one entity is prima facie proof of manipulation.

However, it did not keep me from trading that market on occasion. And my trading methods changed little in light of knowing the market was manipulated. While trading was done with care to protect myself from any unexpected move against my position, that is not unusual - indeed, it is the norm. And it should be. Any market - at any time – can experience an event that causes a sudden move that results in accelerated trading and significant movement in price. It can be a fundamental event – or it could be a manipulation. Both are caused by traders – the motivations may be different, but the results are pretty much the same.

Am I some kind of idiot, who has a financial death wish? I certainly hope not. Let me explain my logic for continuing to trade a market that was clearly manipulated.

First of all, manipulation involves moving the market. I concede that the move does not occur exactly the way the market is supposed to react. Manipulations are like market moves on steroids. But they are moves in one direction or the other and they can be swift and steep. Trading volume can suddenly rise by an order of magnitude and an enormous move can take place. That is one of the reasons I use tick bars instead of minute bars - and my technical approach to trading reacts much faster with tick bars that minute bars. If the market suddenly starts trading at ten times the previous rate, my charts display ten times as many bars for the minute bar charts. The advantage of this difference in price charts should be obvious.