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As a stock market investor, have you ever struggled to distinguish between market maker washing and selling? In fact, understanding intraday washing is not difficult; the key lies in grasping market logic and core characteristics. This article will deeply analyze six common and practical market maker intraday washing strategies, with the last one being particularly noteworthy, as it has high practical value in real combat.
First, we need to clarify the fundamental purpose of market maker's wash trading: to eliminate "unstable chips". This mainly includes two types of investors: one is the investors who are eager to cash out after short-term profits, and the other is the investors who were previously trapped and hope to break even and exit. Regardless of the wash trading methods employed by the market maker, there will be two common characteristics:
1. The decline is controllable: although the stock price is falling, it will not break through key support levels nor will it damage the overall upward trend.
2. Volume and price are inconsistent: During the washout period, the market maker does not actually sell stocks. The trading volume usually shows a decrease or a mild increase. In contrast, the market maker's selling is often accompanied by "increased volume with a drop in price," and the logic behind the two in terms of absorbing selling pressure is entirely different.
Let's take the U-shaped washout as an example to analyze this common washout technique in depth:
In the intraday chart, a U-shaped wash typically manifests as: a quick drop after a high opening in the morning (the drop is usually around 3%), and occasionally large sell orders appear on the market, but the trading volume does not significantly increase and instead gradually decreases. Subsequently, the stock price enters a sideways consolidation phase at a low level, with trading volume dropping to extremely low levels. Before the market closes, the stock price begins to slowly rise, and ultimately the closing price is not much different from the opening price.
By understanding these characteristics and techniques of market manipulation, retail investors can better identify market trends and avoid being easily washed out during market maker manipulation. At the same time, this insight also helps investors seize more potential investment opportunities. Remember, in the stock market, knowledge is power, and continuous learning and observing the market are key to successful investing.