Greetings friends, we continue with the analysis of the hedge funds, to conclude whether or not they are capable of manipulating the market, remember that there are 2 publications prior to this one.
The trafficking of privileged information is the tactic to implement their strategies, so the network of experts is the instrument through which it is perpetrated, the network of experts is made up of politicians, judges and members of companies and corporations that respond to the interests of the hedge funds, the idea is that these people leak data to the managers of the hedge funds so that they can make plays in their favor.
Hedge funds invest millions of dollars in revolutionary computer technology but not only use it to predict and detect market patterns, they also use it to detect the movement of institutional investors such as banks and corporations, to anticipate them even by seconds.They make leverage, they usually borrow money from the banks at a very low interest rate, then they invest in the market so they generate large profits with which they pay off the credit and enjoy those profits, really nothing illegal or unethical in that part.
The stop-loss strategy, as hedge funds have so much money they usually buy many shares of the same company which causes the price of the shares to rise and attracts normal investors and normal stock brokers, hedge funds know that most of These people use the stop-loss technique that consists of selling if the stock they bought falls in price, so the hedge funds take all the shares and sell them, which causes the price to fall and the stop-loss strategy of the Investors and brokers activate, for which hedge funds have already made their short bet, generating profits and related profits, they buy the shares that fell in price, a whole master move, which is not illegal but is not ethical.
After all this evidence we can conclude that hedge funds really are far from the image they want to appear where they do healthy negotiations, impressive research and use advanced quantum trading programs, the reality is that hedge funds are simply experts who will take any advantage to make more money and manipulate the market, now this not only applies to the stock market, I really think the same thing happens in the crypto world.