Many people may wonder why do manipulations occur, the answer is simple actually.

Most people have no ethics when it comes to money especially those who are super rich, most of them have no morals at all. When they see retailers focus on price movements too much instead of the fundamentals, they decide to fool people to maximize their profits. Another problem is that most retailers use leverage which forces them to exit at strong price fluctuations.

It works as follows, if I am a billionair, I have an investment portfolio that includes cash, let's say I have 15% of my net worth in cash. Now, I look at the fundamentals and know that there will be a supply shock in a few months, but everyone looks at the same fundamentals. If I buy now with the cash available, holders will find out that and won't sell to me at a low price, so what should I do? Instead of buying, I decide to sell too much to force most people to sell then I can buy from them at low prices.

But, if everyone in this market was wise enough, they would buy all of what this entity sold and price won't even move much, then this manipulative entity will learn the lesson, as instead of buying 15% at a high price, they will have to buy 15% plus what they sold at this price so they end up losing.

The real issue is that retailers aren't too wise and they get fooled easily and they tend to use a lot of leverage making these manipulative schemes possible which shouldn't be possible in the first place.

So what should we take from this?

1. Use no leverage whether you long or short the market based on fundmental analysis. Actually shorting should only be done on overvalued assets as a hedge during times of uncertainity, nothing more than that!

2. Don't focus on price action in the short term, focus more on the fundmentals.