So, about market manipulation… (part I)

The original plan was to somehow bestow upon you my metaphor of how the markets are basically a crowded, sweaty, crazy race. Lots and lots o’ racers, some big, some small, all greedy, and every single one rushing toward the same, eternally shifting finish lineSidenote: Making money. End of sidenote..

It was supposed to go something like this…

“…some are in Lamborghinis (the institutions and funds), while others sit behind the wheel of a 21-year-old hatchback with three functioning wheels and a bad cough (you and me).”

Then, after some further words, I planned on unveiling the not-so-hidden meaning: the big guys aren’t gonna run you off the track. They don’t need to.

But, as Helmuth von Moltke the Elder said, no plan survives contact with reality.

Just as I was writing, two things happened in the real world and these two things illustrate the core idea better than anything I could ever dream up.

So this, friend, is a case study showing that even though you might have the same goal as someone else, it doesn’t really mean that they’re automatically your pal.

And neither, in the true sense of the word, a foe.

Crazy, huh?

The big scary bully who ate my lunch

I have this weird habit of checking trader discussion forums on brokerages and really enjoying it. Even though it is the same old, same old everywhere, it always has me coming back.

Call it nostalgia, madness or something, it’s my jam.

There’s close to zero really useful and actionable infoSidenote: Sorry, guys!But it’s the truth and no one, ever, should make investment or trading decisions based on what anons write on these forums.I mean, slapping NFA (not financial advice) to your posts on X or wherever is kinda annoying, but when guys on retail forums do it, they really, really mean it.I’d argue that in their case it stands for NEVER FOLLOW ADVICE.The core reason is that 99% of these analyses and prognoses are built on two things the markets are provably resistant to: hope and/or strictly rational thinking. End of sidenote. on there and the topic of the day usually bounces from “why is it down” to “we’re going up, guyzzz”.

What is admittedly inspiring is the incredible sense of community. Almost to a fault.

People constantly cheer for each other and provide a shoulder to cry on when stocks, inevitably, fall. It’s like a co-dependent support group and totally unlike anything I’ve learned to expect on the internet.

Equal parts fantastic AND bizarre. But I digress.

Because what’s even more fascinating are these two omnipresent symptoms:

• bears on these forums get a LOT of downvotesSidenote: Took me some time, but I figured out why.A majority of the big retail brokerages offer primarily cash accounts, where you can only open long positions (you need a margin account to short, or use synthetic derivatives such as CFDs).Thus, the vast majority of retail traders are bullish by design. End of sidenote.,
• prevalent thinking that institutions are out to get you.

Let’s zoom in on that second point.

Are the big guns, namely institutional algos, hedge funds, market makers, investment vehicles, etc., manipulating and exploiting the prices, with all the retail traders just bearing the unsavory consequences?

Spoiler alert: not really.

At least not by intent, even though slightly by circumstance.

Enter Donald Trump’s Truth API.

You’ll be the first to know… barely

Disclaimer: this one is genuinely in murky waters and I’ll leave everyone to form their own opinion about what shade of gray the whole thing sports. Today, my focus is on mechanisms, not morality.

So, you’ve possibly heard about how Trump Media, the company behind Truth SocialSidenote: Or, as it is more widely known, Donald Trump’s official policy announcement shoutbox. End of sidenote., is offering interested parties paid access to POTUS’ posts on the platform. But that’s not all, no, it is offering privileged access to these. Earlier than they get posted for the whole world to see.

Milliseconds earlier.

Pay up to a solid $1.2 mil/year and you’ve got it, pal. Around ten companies, mostly high-frequency trading firms, have already bought in and I expect the circle to widen.

Now you might think that’s… kinda useless, right?

No one would blame youSidenote: But you’d be colossally wrong anyway.In April 2026, in the midst of the Iran war, Donald Trump posted about pausing strikes on Iranian infrastructure contingent on reopening Hormuz. The market rallied $1.5 trillion.$1.2 million per year is peanuts compared to that. End of sidenote., but it actually exposes a gigantic structural advantage that the aforementioned “big players” already have. Even without knowing, a micromoment earlier, which country the US will bomb next or what tariff is the flavor of the day today.

See, institutional traders are fast. Really fast. Faster than any retail trader will ever be.

They use advanced technologies and algorithms that, among other things, constantly scrape the news and social media, and are able to open and close thousands of positionsSidenote: The aforementioned high-frequency trading.Funds go really overboard to get even a billionth of a second advantage.A great example:In 2023 the London Stock Exchange moved its matching engine (a machine that pairs buyers and sellers) out to a data center in the Docklands. LSEG put its own radio transmitter on the roof.A firm called McKay Brothers wanted its kit up there too, but got told no. They took the whole thing to the UK markets regulator, which found the exchange may have been abusing a dominant position.It was literally a fight over billionths of a second. Meanwhile your order leaves your phone and takes between 10 and 100 milliseconds to arrive.Still think that’s fast? End of sidenote. in spans of seconds based on ingested data or observed market conditions.

If you think that you, with your thumb hovering over the buy button on your smartphone, waiting for the live Fed rate decision, have got the market outsmarted… think again.

Before you even make that trade, the algos have already pumped the price, taken the profit, and are now hunting for the next one.

So a millisecond advantage is like giving the Lambo from the beginning of this article a headstart.

It would have won anyway, but now it’s gonna win harder.

So, Simon, how does all that prove that it’s NOT one messy, manipulated, skewed battlefield, because it sure sounds like it is! That’s what I imagine you might say at this point, and rightly so.

But hold on, traveler, we’ll get there.

Right now, remember this: just ‘cause someone is way better at being profitable than you’ll ever be, doesn’t mean it absolutely has to be at your expense.

Can’t see the liquidity? You ARE the liquidity

But, alas, it often will.

And it’s not as much the funds being predatory, as the retailers being unprepared and lackadaisical.

Having faster responses is just one example of how the institutions are, from the get-go, incomparably better equipped to handle whatever the markets throw at them.

They also have larger capital at their disposal.

They have full-time analysts and researchersSidenote: That beautiful and detailed analysis you read on someone’s X profile?Hedge funds have whole divisions of people producing ones like that (but better) full-time, including former oil execs, world-class engineers and retired US Army generals.This phenomenon also has a name: the revolving door. End of sidenote..

And they usually have more time and more room for mistakes than you.

That doesn’t mean you can’t earn money trading the markets as a retailer. You can, you absolutely can, but you should never treat it as a competition with Big Money Inc., only to then blame manipulation for your own screwups.

Because these will come, especially in the beginning. Unfortunately, retail traders often run toward them, arms outstretched.

How?

Pardon my French, but by trading stupidly.

Examples:

• placing stops arbitrarilySidenote: That means not taking into account the average daily range of an equity price and ignoring liquidity pools.If you place your stop at a place “where the loss is not so bad”, you might as well have donated the money to a worthy charity. End of sidenote.,
• relying ONLY on technical indicators,
• FOMO buying and panic selling,
• ignoring macro context,
• ignoring market volatility,
• trading off advice from internet anons, or..
• … simply having no risk management at all.

See, brother, you’re gonna lose even on sunny days. On good setups, well prepared entries and with rock solid risk mitigation.

Other times you will be right about the thesis… but early. Which, when it comes to making money trading securities, is almost the same as being wrong. It’s equally harsh as it is true.

But by making any of the aforementioned mistakes you premeditate disaster. Like pouring gasoline on yourself and going for a smoke. Sure, you’ll be warm, but you’ll also be dead.

When you charge the markets blindly and the price action makes you, literally, pay your due… the easy way is to shift blame. And we humans are the foremost expertsSidenote: I am not kidding, our brain is great at justifying and defending our actions, even the ridiculously wrong ones, in hindsight. Often by shifting weight on to external actors and factors.It’s a psychological defense mechanism. Sometimes annoying but harmless, other times costing you rent money. End of sidenote. on this.

Where to?

Take your pick. The usual suspects are market manipulation, pump & dump schemes, big money backroom dealing, Illuminati, whatever. If you think I am blowing this out of proportion, load up a retail trading platform with discussions enabled – I guarantee you’ll find any or all of these motifs in under 5 minutes.

BUT it’s too late to complain that someone took your TV when you’ve left the door wide open.

Let me emphasize this: institutions will take your money and won’t feel bad about it for a second. Hell, I would, too, if you just up and threw it at me, and I would absolutely laugh mischievously while doing so. Dog eat dog world, or something.

The primary goal of ALL market participants is to generate profit. Yours, mine, Citadel’s, Sequoia’s, Warren Buffett’s. Everyone’s.

If you are not profitable over the long term, you’re out of the game. If someone else’s profits come as a result of your mistakes, tough luck.

But saying the big guns are primed to run you to bankruptcy, that’s just paranoid. And wrong.

Why?

Because the crazy thing is that institutions actually NEED retail traders.

I explain how and why in the next part. Read it right here.