Rig me some smallcaps stocks

Price action painter aka institutional rigging operator at his work above.

Do you have a yearly deficit of rabbit hole material and need some? If so you are at the right place to get some.

However, if you are familiar with the content on this blog, this article just like all others before will be dry to the wall, focused on all sorts of phrases and naming schemes that you might not have heard of even if dealing with markets for years, such as "type1s", "type4s", "clearouts" and other alien alike phrases.

Why choosing phrase "clearouts"? Because I think trading at its core is a savage game where leading institutions orchestrate price action in a way that liquidates as much of other traders as possible. For them to eat, they need to hunt, unlike retailers. Hence the name clearout.

Why "type1", or "typeX", why so dry? Because i believe in objective non-exciting naming phrases for patterns, so we take each trade seriously. Flashy names are entertaining, but entertainment in the trading industry is a trap. Its already hard enough while being taken seriously.

Nonetheless, if you feel confused about phrasing, make sure to read older articles, where much of those phrases have already been outlined and explained. Using keywords "rigged", "smallcaps" and "traps" might return results on older articles where basics about those patterns are outlined.

I have been creating content related to market (price action) manipulations for a while now either on social media, in articles, or just in direct communications with traders. A few years of poorly written, with many grammar errors infused articles or other types of posts, where the concepts of manipulations surprisingly haven't aged much. The writing has improved a little (subjectively), but the manipulation concepts have remained the same.

The two common types of patterns (type1+type4) that I first discussed several years ago in older content are still relevant today or perhaps even more relevant today as liquidity in markets has increased, and so has the "spawn rate" of this pattern. By all means price action manipulations are increasing as years go by because larger and larger wealth accumulation by the top 1% and larger institutions have increasingly more control over price behavior dynamics.

Liquidation patterns don't age, in fact, they age in reverse IF liquidity in markets is gradually increasing. Meaning manipulations are expanding as time goes by, not the inverse and that remains the case even in an era where information is becoming more accessible and transparent for everyone! This kinda seems impossible (to hide manipulations in a transparent data driven tech society), yet it completely is the case. How? By two things, the operators:

-use complex mechanics to hide/mask operations

-secrecy of those running operations and very rarely anyone speaking out, ensures the rigs to remain operational

On the topic of aging price patterns, we can go back further in history, many decades ago for example, a "spring" pattern that the good ole Wyckoff identified, was the rather low-frequent type of clearout pattern back then in the 1930s or 50s. And now it has merged into a more developed beast of different clearout patterns as broad markets liquidity and manipulations have increased so much, expanding variations. Stop hunting in nowadays markets makes way more sense than it ever had before in 1940s for that matter. So the old concepts from his material should be solidified and strengthened, not weakened.

Manipulations of price action expanded over the years in all markets because there are more participants. More traders. Therefore more liquidity. Therefore market makers can create deeper stake pools at the table, by expanding total volume and tape activity. It's a spiral. More of everything leads to higher % moves, more total active tickers, more... I mean just look at how much market making has blown up in just Binance platform ecosystem for crypto markets. Its massive increase over the years.

But do not forget about the technological progress of easy market access and easy access to shorts, it getting easier over the years placing positions in the market in trading platforms, which works often against the traders, making them less patient and more click proned and under fear unfluence of riggers price manipulations.

In other words, technology allows traders to be much more psychologically influenced by price dynamics because one can get in and out of position fast. High leverage, and high tech, actually make retail traders more prone to falling for market makers' manipulations, and "flinch maneuvers". I don't think many traders think about this on a daily basis, but I can be almost certain that the market makers do. Making you get "flinched out" as short seller into HOD swipe just before operators start to unload the stock, is their tactic. Or making you get "flinched out" in panic when stock dumps in fast flush-out, just so they can scoop up your shares and push price back up, is their tactic too.

"They have to be rigging smallcap stocks for the sake of dilution and offerings right, otherwise whats the point?"

While it seems rational to think that, if any institution were to heavily buy up the float and squeeze those worthless smallcap stocks, its gotta be due to some broad agenda aka "deal with the company to create financing via offering", otherwise what do market makers gain? 

Let's check the facts first and explain why the above is the only assumption that doesn't travel far in practicality:

-Many rigged stocks never get offered within one month after the stock is rigged and squeezed. Rigged+squeezed but no offering following.

-Sometimes institutional players/market maker knows in advance certain news will create tons of retail interest. So they might buy/rig ticker in advance into the event (conference calls and earnings or deals with large cap companies in small-caps often) just to be able to sell into retail later entire inventory. Especially lately squeeze agendas go way past just offerings. There is more different types of news in the play than just dilution to create squeeze reasons. But the most important part is below:

-Market makers can make a lot more P/L via liquidity hunting than they might via a side deal with the company on the offering. And this above all reasons, is the most important one. It's all about grabbing the chips from the poker table on the stack, rather than bothering with side deals where the maximums are always pre-set. Squeezing ticker high up, unloading inventory to other chasing longs, and then hedging short while dumping the inventory-the market makers can make so much P/L that whether there is or isnt any news agenda sometimes does not matter at all. And that outcome is more and more common. "Why is this ticker squeezing, it has no potential to offer, it has no news, it is hard to borrow, yet someone is squeezing it?"- Thats why. P/L liquidity hunting games.

As well, just think about it applying some devils advocate approach:

 If behind every rigged move and high % squeeze, we had an offering afterward, don't you think it could get a little bit too easy for US regulators to start poking some probes into the order flow and what's going on? Finding connections? So the market making institutions could get in trouble?

I believe that the noise creation is somewhat intentional. The market makers will squeeze some stocks and run offerings later, and not so many others, so that tracks are mixed together and data hides the obvious (on samples where offerings do come). Intentional mix and match.

And it is not just about dodging SEC, of course as well about intentionally creating noise so that longs get still bagged into offerings, and that shorts still short anticipation of offerings that do not come. If they run offerings too consistently on rigged names the edge becomes obvious. So they mix up different types of tickers, intentionally.

For example one specific research i did early on, was when i found clues that price action on ticker is very manipulated, i saved those samples and tried to find out over months, if there was offering raining about to happen shortly afterwards. The answer was no. So just because price is manipulated, it doesnt create a high consistency of dilution shortly after. Obviously it would be an easy gold mine if you found out otherwise.

As we defined above, liquidity raiding and P/L extraction by manipulators is potentially the main target of why running manipulations, an example of what that means:

What is liquidity raiding?

Liquidity raiding. Aka trading account liquidations run by institutional players. Aka collecting chips of the total player stack from the table over large number of games.

The liquidity raiding institution is collecting the open P/L from traders globally as a part of their own P/L by creating manipulated movements in markets that trap many leveraged traders in the wrong locations. Highly leveraged or heavily sized traders can easily get prone to manipulation tactics due to emotional heat that starts to play a role on oversized positions, when out-of-the-money on the trade. Or just simply because trading with no edge.

Let's outline an example. If we have a trader with 10k account equity, buying enough of position size that a 30% move in stock would cause a 3k loss (a 30% move is not unusual for small-caps in the span of 15 minutes) if the support level was breached, do you think there is a chance that such trader would fall potentially under "liquidity raiding schemes and stop-hunting" of market makers? Psychological heat (panic clicking out of position) and being prone to stop hunted (even if right in the end) is elevated via high leverage and lack of experience. Or just too much conviction and price not responding quickly enough (for experienced traders often).

We know that the typical retailer is undercapitalized, and uses plenty leverage, typically risking a large % of the account. This is exactly what makes traders prone to emotional games of liquidity hunting, stopping out position at worst moments, and being prey to market makers running such tactics. Revenge trading, combined with oversizing AND a bad read on a stock (due to lack of experience) is a perfect psychological predisposition to have for falling on those tricks.

This will be a bit crude example, but to explain how this works from normal day life:

(A) When you are cool, calm, and collected and someone out there is trying to provoke you because they are highly provocative person (you get one of those once in a while), what is your response? If you are low on conflict and more analytical you might de-escalate. You wont feed into it.

(B) But what if you have a very bad day, agitated, with a heart rate near the max? You will be more likely to feed into it. The provocative person has already won regardless of outcomes, why? Because you got triggered and sucked into it, your poor predisposition mood sucked you right in. And now you dance to their tune. Thats how market makers get you too when you revenge trade right from get go of the market open.

Price action trapping, and everything attached to it, works in a similar fashion. This is one reason why I rarely trade when the mood is not stable, or more commonly to size down significantly on such days. Especially because most of my trades are on manipulative assets its to understand that you want to only show up when in good mindset. Better know the battlefield dynamics before playing the field.

It's the oversizing and overconfidence that gets traders on manipulated assets typically. Or just bad read on what manipulators are trying to achieve.

Stop thinking about orderflow on tickers being created by your fellow traders primarily

The volume and orderflow itself is to some large extent artificial. Let me put it this way. When you walk into a casino, do you think that the casino on that day is created from all the participants that are inside the casino, or is the casino created as a business environment by the CEO+staff+infrastructure+mostly rigged games against you to attract the participants who are inside of the casino so that transactions can be made?

The answer is both can be true. 5 friends can meet up and start a small-scale poker table casino, setting low-liquid casino operations just between themselves (not legal in many countries, but for sake of reference).

But that's not where big money is made for those who want to play professionally daily. You cant scale 5 player static table. But a casino- that scales. One needs an operation that is large scale, with significant backing capital provided on a daily basis and rotating players. You need a house, and a staff, and plenty of games inside it.

So to return to prior reference about casino, we shouldnt be focused on players in casino primarily. We should first realize we are walking into artificially created environment, where house is meant to win in the end. Because they provide large scale business model. The exactly same is how most markets nowadays operate. So stop thinking about pump groups, and divert attention to the casino (riggers). If you comprehend that house is meant to win on average, you shouldnt walk into casino excited and full of easy to go lucky. You should be scared for your wallet. Because the game is rigged against you. Just like markets. Yet many beginners traders think they just walked into easiset money making game there is under the sun. And it has to be that "because so few people you know in real life know about trading", that this has to be secret sauce to very quick gold mine. I certainly thought that in the first month. What an idiot...

Now using the above casino metaphor, do you ever wonder who creates pre-market volume on squeezing day 1 gapping ticker?

For most of US traders, the clock will be early in the morning when they havent even properly woken up and got out of the bed, yet the ticker is ramping with millions shares traded volume. Who is doing it? Every day, on multiple tickers. This is where the concept of hijacking float early by insitutional riggers come into play, more about that later. Riggers moto:

Is pre market action on high liquidity created by 10 retail traders who are very quick to catch the news, every day watching headlines like hawks , and they are buying with size enough that can create 100k shares rotation every single minute in pre-market, which would total a buying power that exceeds 100 mil USD over a PM session?

Or do you think it's much more likely an institution, a casino-like operation in financial markets that is creating the environment so that new traders can start to "play in sandbox" that they created in first place?

Which of those two do you think is more likely? Watch the consistency of tape transactions on some of those tickers that trade in pre-market. When most traders are still sleeping in the US or away from screens. The consistency of transactions points towards the amount of capital needed to run such orders goes way beyond a large group of retail traders, for many tickers. So if pre-market is rigged, what makes you think after the market opens the order flow won't be often rigged as well?

On low liquid assets, where ticker gaps up on 10k shares volume with a 100% spike move - sure a small group of retailers can be responsible for creating such an action. But on something that trades 100k shares per minute on high tape velocity (which is highly common in 2025), with very tight spread we know that is likely NOT the case.

I still find it funny, how so few traders from the US actually wake up to trade pre-market, yet they assume there are 1000s of other traders doing all the action in pre-market. The imported working Mexican bees do all the work in pre-market while they sleep, so they can trade after opening on high liquidity. Obviously a fiction, it's the work of a single or few institutional players more often than not.

So what's the point I am drawing here? Assume everything of liquidity and price action in small-caps is fake and orchestrated. Once we set this as default, we will start looking at price action from a different angle. We will see the games played against us.

Have you ever read "efficient market hypothesis" and wondered, how come small-caps don't seem to follow this thesis at all?

Above is an extraction of the "efficient market hypothesis" as per some definitions attached on image.

Now if you trade small-caps you'll know this is the most nonsense thing you have read in a year, unmatched. But thats not the interesting part. The interesting part is...how can it be? How can many large market cap assets actually trade under more market-efficient conditions quite a lot, but smallcaps do not? Smallcaps trade anything but efficiently. Its more about manipulations, and about short term value extraction.

The answer might be because: When you have low float and heavy-sized rigging institutions (market makers on smallcaps), they can buy up the float, squeeze it all the way, AND then hedge with short because borrow inventories are getting widely accessible for everyone.

So they can dodge getting bagged in many cases and hedging long sided inventory via shorts turns the entire efficient market hypothesis upside down on its head.

Because what prevented those activities decades before in the past (when the efficient market hypothesis was more noticeable and still applicable), was difficult shorting access, smaller institutions, and fewer total market participants for institutions to trade against (which you need for trapping the liquidity). All this explains why in last several years the rigging in smallcaps has increased so drastically because of the above 4 variables being present, much more than before. So...."efficient market hypothesis" is ageing really fucking bad man.

How they run the game conceptually:

Let's outline roughly how the scheme of rigging heavy squeeze might look like:

1. Start with buying up the entire float in pre-market (draw all prior holders to start selling to the market maker)

2. Start with creating traps during the session trap longs into spikes, trap shorts into dumps under lows, draw in as much liquidity as possible, buy some sell some and keep moving the tape (not necessarily the price).

3. Once they feel they arent bating any more of new longs/shorts and tape is getting dry, or especially not enough long sided, they start hedging with larger short position (altought that by no means always happens or has to always happen), which typically they need to consolidate price for several minutes to build. Type1 is going to come handy to achieve that. In my subjective view, the tickers where they decide to hedge short is probably where they hold huge portion of float, and they cant sell that fast into other longs because the tape is too slow. So in such case the only option is to build short hedge position and then control-dump it. In many cases this is achieved via type1 setup probably.

4. Start dumping the long sided inventory and cover short position gradually into decline

To run a game above, what do you need?

1. Huge capital and buying power. Well beyond most retail trading accounts or even prop firms for that matter.

2. Access to a large inventory of borrows and direct access to clearing house. Those guys need to have access to borrows before everyone else, to be on safe side and not get bagged while running market making. Very key: Heavy manipulations and huge 1000% squeezes have massively increased in numbers once shorting became more accessible to everyone, including institutions over past years. There is no coincidence there. If riggers have tons of borrows on hand, they can squeeze ticker as high as they want, while later hedging short. That explains well why big squeezes have grown over the years. Riggers arent hard-squeezing tickers because they are ass-chasing you one small short seller out there (as shorts often think), its because they can hedge long invnetory from the heights of squeeze and collapse it down.

3. Understanding of what can be done via price action technique moves that trap and stop out traders, understanding the art of "painting the traps". There is only so much you can do with price action in 8 hours of a typical NY session. Time and mathematics are actual limitations to how much originality riggers can bring to manipulation techniques. That's why patterns exist. Because there is only so much that can be different on a ticker-to-ticker basis. What you need on a job is some twisted fucks basically is what i am trying to say, who understand how to put Machiavellian tactics into the chart itself.

If the above is provided then a:

1. Large capital can squeeze the stock high up in relentless buy-sell-buy-sell activity that creates fake transactions. Basically creating false perception of high demand, which traps other long biased traders. Ever seen a smallcap ticker on super high liquidity, that goes into HOD clearout and then just....dies few minutes later (SGN)? Yes its a thing.

   
   

2. Borrows and shorting allow those institutions to short the stock when they have no more interest to squeeze it further. And they do need to go short in some cases because if they were the main buyer "up there", once they start selling, it can get ugly fast. So hedging short allows to crush the bid while holding net long inventory, and minimizes the loss from the top down for the rig party incorporated.

   
   

3. Creating the traps along the way is how the traders are trapped for the sake of liquidity hunting. Aka international wire transfers you haven't agreed to.

To outline SGN as example of point 1 above and why there is no honest demand in smallcaps, since its all orchestrated:

Keep in mind, the game of smallcaps is: Someone always takes the float hostage. They decide what happens next. Not so much the "natural/random market".

Now let's consider this. If there is an institution that has access to the above 3 points we mentioned every single day, then what stops them, from doing and running this scheme on many many tickers?:

-Tickers that don't need offerings,

-Tickers, companies that don't have any PR or news,

-And tickers that have no reason to squeeze at all.

The answer is, that nothing is stopping them from rigging all of the above tickers, as long as they can effectively long and then short/hedge inventory. And as long as the enough pool of participating traders is present, thousands of trading accounts willing to click buy or sell as soon as something pops on the scanner, the above institution can start running a scheme on a continuous basis. On some tickers easier on some more difficult. the point being: They dont need any higher meaning or reasoning or agenda to rig the tickers. If they are good at it (not getting bagged), and if there is enough of traders bating (statistically many of which will be on wrong sides of the moves), they can extract P/L and market make the tickers day in, day out.

Yeah...but....what about "bagholders"?

If there is 5 million shares float, and lets say 1 million shares of bag-held liquidity from prior runs, and tickers recently in 2025 float rotate galore, many times over a day....do you really think there is any overhead supply stopping the rigging party incorporated? Of course not. Not unless...the float is huge. Then it could make a difference. So pack that 2015 thesis you heard from some other short seller and toss it out. It's obsolete. In the efficient market hypothesis "overhead supply from bagholders" plays a role, especially on larger floats. In rigged to the core tiny floats on high volume, not so much.

You know how in an organic "efficient" market, one would look on the tape, see a heavy buyer, and say "Well if this guy is buying so heavy, then I assume he will keep doing it because there is an agenda to accumulate inventory, and that gives good reasons for upside, or he has information that i dont and has conviction for more upside."

In smallcaps, that "heavy buyer" often turns into "heavy seller" quickly after. The same rigger aggressively buys up, traps long into the fake rotation, and then flushes out inventory just 2 or a few minutes later.

This means...there is no "trust" to the tape action. In terms of "this large guy is on my side, playing the same direction as me, and might stick around for a while". Its very important that as trader, you do NOT have any attachment to any large participant you see on the tape, because the flows can shift instantly. And you dont know when they will rug pull or start squeezing freshly the thing again.

For example, when I traded lower liquid markets before, years ago, you could lean into the heavy MM. On very high liquid and highly manipulated tickers in smallcaps however, that same heavy buyer can turn heavy seller in an instant. Snap of a finger. Because high liquidity AND access to shorting, allow them to switch positions quickly and fuck everyone who is not fast enough to spot the change.

Again it's the combination of highly liquid markets, access to shorting, and enough of other traders trading, that allows those market makers/riggers to play the game this way. In simple terms, the rigging is getting more aggressive as the years go by, due to above reasons. Much more complex traps, bigger squeezes followed by heavy dumps, and things of such nature.

What are some common rigged tricks that smallcap traders should be well familiar with?

Microshelf on the picture above

If you want to survive in the casino, you need to learn the tricks the casino is actively playing on you, on a daily basis:

-micro shelves

-backside clearouts

-fake breakouts

-type4s

Micro...shelf? Is this a carpentry term or are we still talking about financial markets?

Don't worry, it is still trading-related. Shelf as in - a price that consolidates in a tight range, creating a structure that kinda looks like a shelf. And micro, because it has a very narrow range, for example 10 cents. Whenever you see microshelf forming, especially after breakout to the upside, be on guard for possible rug pulls. They often come afterwards. Market makers create those microshelves to start hedging short against their long inventory, and also to trap some chasing long traders.

Here is a hint. Whenever you see very symmetric support level and especially in form of microshelves in smallcaps, your sus levels, need to get hightened up.

Just think about it. Why would a stock for 5 hours trade in very noisy, uneven, random fashion of ups and downs, big moves up, small waves down,....but then all of the sudden it starts to consolidate in a perfect tiny range (with very clean defended support), which seems like something comepletely out of the whack considering all the prior price action? Probably because it is not randomly formed by market. It's controlled by an operator. From statistical point it is unlikely that a bunch of randomness all of sudden spawns perfect symmetry, unless there is high influence driving it.

Whats their goal? To trap longs primarily but also to stop out shorts who are in the red. An experiment for example that would validate the assumption is:

-Put 100 traders into lets call it "microshelf beta test". Imagine just like gaming companies have some employess activelly testing and playing versions of game to see what works and what doesnt, one could run same simulation with microshelf on smallcap stocks specifically around beginner traders, and observe the analysis aspect and actions taken by such traders. How many go long, how many short, and why when shelf action starts (10 minutes into it). Or how many shorts that are OTM (in the red) stop out into microshelf because the price just "keeps holding above breakout level" so the duration of shelf consolidation (which market makers hold up) makes them stop out. Example below how they get both longs and shorts on microshelves:

Example below is microshelf formation after HOD clearout:

Ok, maybe i didnt run the above "beta test" with 100 traders. But i was personally in many 1000s of situations to test it on myself as experiment rat in the lab and over the years i have traded with 100s if not 1000s of traders, seeing their charts....and believe me. Above is how reality actually works.

You ever noticed how come most microshelves happen after upside squeeze and not into the downside heavy selloffs in smallcaps? Its because if market makers want to trap longs, first they create squeeze, to create the cloak of "potential to run higher". Then they create microshelf where support is holding perfectly, to show that "so many are buying that support is holding like solid rock." And then boom, support flushes out in heavy flush. Wait what? How? Thats how. Its a trap.

So how does one apply microshelves in trading of rigged smallcaps?

1. (LONG) Be careful about longing when shelf appears. Its likely that lows of shelf will get flushed out, so maybe its best to long after lows are flushed or not longing at all. Sometimes microshelves are THE top on stock. And heavy selloff happens after. But sometimes its just smaller flush of lows followed by reclaim. Either way why it matters is, from leveraged trading perspective where timing is KEY, and having no draw down on position is ideal, not longing ticker that is just about to go against us is kinda good thing to do.

   
   

2. (SHORT) If you are short from lower, and ticker is forming microshelf above HOD, it might be good idea in many situations to not yet stop out, and wait for shelf lows to flush out, and cover out there.
   

   Again microshelves are typically identified as low volatile range structures, after key HOD clearouts, where stupport within the structure is perfectly defended.

A bit older chart relic of RKDA here from 2019, just to show this concept has been around for years:

Rigging activity correlation to hot risk-ON markets and "dont short Chinese stocks"

Well we need to understand the context. Manipulations and large squeezes HIGHLY increase when broad markets kick into risk-ON state (aka buy first ask questions later mode). Broad market liquidity and performance of midcap stocks, creates stories in midcap and large cap sectors that give hot momentum chances in smallcaps. Especially when central banks launch QEs, the risk-ON carry can get strong.

High liquidity provisions from central institutions, allow to inflate stocks more and lure more traders (as many beginners are statistically interested in chasing rather than buying dips), therefore in turn, increasing incentives for riggers to manipulate markets at that time more. So monetary policies do have a large influence over that. Ever wondered how China has launched a bunch of stimulus programs in the past few years (but not so much before that) and manipulations in Chinese listed small-caps at the same time have ramped up at exactly the same time? Ever wondered why 2020 and 21 had the highest net ratio of manipulated US-listed equities on the smallcap side, which correlated with the FED and all other G8 central banks launching a large QE program at that same time?

What's my point? There is no such thing as "perma hiding ground". "Don't short this X market, but do YZ". "Dont short Chinese stocks, but short all US listed ones". Those advices will rotate in applicability in and out, once the market changes. Because NO market will stay stimulated or in same condition forever. But when it is stimulated, that's when manipulations will increase. So the answer is not to increase an arbitrary rule of "don't short this and short this" but it's about realizing that broad market conditions drive a lot of action in the end, and adjusting to that is how one should seek for opportunities.

Summary: Start paying attention to broad markets, and apply some macro insights daily into smallcaps. To adjust bias on daily basis.

Fake breakout (that reclaims)

Most likely you have heard about the fake breakouts. You pick a random price action book and there will be a section towards it somewhere in the back. Few pages are dedicated to the topic as if it happens VERY RARELY and that most breakouts actually work out excellent. Meanwhile...in the real world of markets, fake breakouts are highly common.

Something i have mentioned many times is that, most educational market material geared towards "price action manipulation" is very unpractical. Not applicable or its just ideas that are just ideas on cherry picked samples but not really fleshed out through the practice and 1000s of executions (many authors arent actually full time traders who write books, by majority). So the fake breakouts material is either limited, or the actual concept which matters the most - fake breakout reclaim is hardly discussed.

If we have a rigged financial asset, and a single participant created a fake breakout by flushing out tons of inventory after the price made a breakout...then wouldn't it be an interesting insight to see the price reclaim that fake breakout right back up, fast?

Just think about it. Someone just trapped tons of traders into a breakout and flushed tons of bricks on them, yet the price still bumped up and reclaimed fast. What does that tell about the "health of demand"?

And that demand doesn't have to be organic, which it wont be either way in most cases. It can totally be the same trader who orchestrated the fake breakout, that is responsible for reclaim. From our perspective, it does not matter. The only thing that matters, is that after the heavy fake breakout, the price should decline because many buyers would be scared to buy again. Don't believe me? Run a 100 sample beginners trader test, using what I mentioned above for "gaming company". Most traders would not be interested longing again shortly after heavy fake breakout, even if reclaims back (especially if they got already stopped out). So if we know the retail isnt buying, who is? Rethorical question.

So if reclaim happens so quickly, we have possible indication of more upside. How much? It largely depends, data is very scattered on those patterns. In some instances large squeeze might follow, in some only smaller upside. Again there are many other variables to polish, but non the less we know that reclaim of fake breakout should NOT be taken lightly.

The conclusion is: Trading fake breakouts short is go to edge in weaker smallcap flows. But when flows heat up, the inverse edge often makes sense, going long IF fake-breakout-rejects-reclaims fast. Thats can often be a long.

Clearouts dynamics and position where everyone stops out instead

I always recommend that as long trader you develop approaches where your entry into trade is where many other traders would instead be stopping out, into LOD or demand clearouts.

Or as short seller to position where other shorts would ikely be stopping out-into HOD clearouts or some sort of fake rotations.

Fake breakouts above HOD levels or "fbo" short are common behavioral pattern for smallcaps. Shorting them in weaker markets is for sure way to go, because more smallcap uptrending tickers will be range bound and wont escape too far, if broad markets are in risk-OFF. But be careful shorting every HOD poke on uptrending market in strong risk-ON, because too many tickers will escape and squeeze further higher. Applying trading method to fit right market conditions is necessary. By far my go-to method for shorting smallcaps is into HOD clearouts / fbos if smallcaps are underperforming in past 7 days, and ideally broad markets too.

SXTC example:

Another example on ZENA from April:

What do all 3 tickers above share? They are from same market environment (same week of action), where smallcaps were very fake-breakout proned, and using that theme as an edge to short worked well. This thematic behavior is not random, and it fits overall more risk-OFF driven market at the time (tariffs driven).

Rigged pattern variations (using type1 as example)

It should be pointed out, that each pattern always has variations. Just because you spotted a pattern, and you have seen it before, it's not the end of the work. Researching 100 samples or more, and finding out the possible delivery versions is necessary

in order to figure out what one should expect. And how to manage risk around each version so it doesn't undercut the gains, but at the same time still fits all 3 possible versions well enough.

Using type 1 as a referenced pattern here, all patterns should be gathered, researched, and behavior studied in the same way.

Painting the price action

And now we head into one of my favorite subjects when it comes to markets: The "painting" of price action.

Basically, the price action creation process can happen in two ways:

1. Organically driven, random price action, where 1000s of equally sized participants shape the movement of the candles.

2. Agenda-driven covert and hijacked orderflow, non-random (intentional) price action, where one or few oversized participants are responsible for determining how price behaves, as their activity on tape and buying power far outmatches the rest of market participants.

Low float - agenda correlation and how it relates to "painting of PA":

So let's understand the concept of a smaller float, and how easy access to borrows in modern markets, allow a lot of market makers to participate in (2) agenda-driven price action most of the time, rather than organically. Orchestrating pump and dumps all by themselves, without any cordinated 1000 man armies, like how typically pump and dumps work in low liquid tiny market cap assets.

If we are dealing with thick float assets, for example, 100 mil shares float, trading 500k shares per minute, it is difficult for any institution or market maker to absorb with high guarantee the good chunk of the float on the first day of higher volume / PR action. It is hard to take an asset hostage when you cannot control the float (which is required to "paint the price action") because the float size is so large that it is unlikely to get all participants to sell on day 1 so that some institution who is willing to rig the ticker can absorb that inventory and start rigging the ticker efficiently. Big floats have a bit more of "democratic" participation, and are bit trickier to rig IF their liquidity is low. If ticker has big float but very high liquidity, then it balances itself out and can still be rigged (Bitcoin for example). Low floats in general offer riggers more controlled environmnnt, specifically from viewpoint that any massive seller is much less likely to show up randomly into middle of squeeze, which on thick/big floated ticker can happen at any momment.

Companies with poor capital structure have stocks with low float for a reason. Those will typically not attract institutional ownership. It will often not attract new market makers after the ticker is squeezed past 500%, because re-absorbing the float at a high price can be dangerous to then hold and maintain. If tape dries out, and a new institution gets stuck with inventory, it would have to be liquidated at a loss on the way down, if the tape was to dry out. That is why in my view, it's the primary market maker that has the first dibs in pre-market who locks the float that controls most of what will happen to tickers price on that day, altough that can be very situational and near impossible to prove. 

Here is why such assumption: Because they dictate at which price they will sell. And they dictate when they will hedge short before they start dumping. This means once they have accumulated, sold, re-bought, sold, and made a bunch of P/L on the upside of the move, they decide when the top will be in, and start shorting with a hedge. Once they start to liquidate inventory, it is unlikely new market makers would absorb all that (at which point primary institutions could get in trouble as they are hedged short and could get short-squeezed). While that does happen, and we had some public stories of funds that did get short-squeezed while trying to market make both squeeze and dump, it probably doesn't happen that often, else obviously the entire manipulative side of tickers movements would disappear. So in summary, we can assume that a small float can be taken hostage easily, by a medium-sized institution. They have to be first to the table in pre-market and get hands-on inventory, soaking up enough of shares. They also need access to relatively sized shorting inventory (borrows) so that once they are done squeezing they use short inventory to build a hedge. Because not often will they be able to liquidate all they carry on the long side, without taking a loss on the way down. So short hedge is there to prevent the trouble, altough its certainly the case that not always will they hedge short as sometimes the shorts wont be avalible for anyone.

This is in my view exactly why rigging tickers (even if they have 0 news) is spreading rapidly. Because more institutions have access to this process now and on low floats no other secondary market maker can steal the hostage situation of the primary one if primary one isnt selling.

This is key. Just think about it. Whoever is first that locks the float, can control exactly how much to sell at what point, and if they spot a large aggressive buyer (secondary MM) they can easily just scale back the offers, and stop the selling. At which point that secondary market maker can only take a small portion of float at huge expense, eating up thin offers into ask and squeezing price fast up (rewarding primary MM heavily and trapping themselves into thin squeeze prices as secondary MM)! Which is a no-no as you have no control.

Hijacking the float

The whole point of controlling the float is absorbing the inventory slowly at a controlled pace and price, and not into ramping squeeze. So that process in itself is what in my view makes low floats (with easy borrow access in modern markets) such a sandbox for riggers. And that's why you see much less of such activity on large float mid-cap stocks for example. It's all about the float hostage situation, with aim: pre-market if possible.

Why do so many tickers get manipulated lately? With heavy squeezes, followed by complete dumps and plenty of controlled price action in between.

All of those variables mentioned above play a role:

1. Over the past few years, we had a significant increase in those interested in trading. More market participants allow market makers to manipulate and liquidity-hunt more often. Long sided participants on uptick.

2. With shorting getting more easily accessible as well over past years not just to retail but everyone in general, it makes it easier to short squeeze and to hedge the long side of the game for market makers. And it brings more retail short selling liquidity to squeeze every now and then.

3. And with more centralized oversized hedge funds (Blackrocks and whatnot) type of institutions, their overpowered stance in past years has grown as well, making "cornering" of certain assets or supply easier due to the sheer capital size they operate with. Not to put Blackrock on the spot here, but it's just an example as there are many similar players out there.

That would be the functional aspect of why tickers are getting rigged at such high numbers lately, or at least some of my views of why that might be. In fact, there could be some other reasons that I am completely unaware of that would further help to shine the light on the situation. More stones to be unturned as years go by perhaps.

To briefly touch on the concept of "painting the price action". This is where liquidity hunting comes into play as well. To paint the PA with agenda is to hunt someone else's liquidity.

A simplified process would look like this, of how they hijack the float early in pre market often, and then deploy bunch of traps through the day to reduce or increase the inventory, while trapping traders on opposite moves.

Outlined on image above are two processes: One is getting the float locked up. For us as traders, that part is not relevant. Its the second one: The liquidity traps and liquidity hunting.

1. Being aware of what kind of price structures they like to use for traps,

2. Watching tickers behavior if it is repeating particular trap (they often will),

3. Being aware of current market flows and how hot/cold they are to project which level makes sense for trap.

So why do I say that they need to "hijack the float" in order to "paint the price action"?

Well, if you want to create a down move on a stock, let's say 50 cents, for which 500k offers need to trade through on the tape to get it down there through the bid on the ladderbook, then this means, you need 500k inventory in first place. And not just that, if you want to still later have control over the price action, you don't want to sell the entire inventory in a single leg of a move.

You still want to have a high amount of shares held to influence the NEXT leg. This means that in order to create that first 500k south move (for whatever the necessary PA manipulation reason), you need twice or three times as much inventory held in first place. So you can see how we can start to quickly stack numbers together via reverse engineering the painted chart, that they must gather a good chunk of total float in order

to orchestrate the price. Why so? Otherwise, other buyers could become bigger than the rigger, if the rigger held only a tiny inventory, therefore the price would STOP moving into the pre-defined direction of where the rigging operator wants it to go. This is why partial float hijacking is taking place, this is why we have so many high-volume pre-market action movements.

Trap formations are often about changing status quo:

Trapping is formed using:

Basically, changing the prior status quo with a surprise. Doing the opposite of what prior status quo price action move was.

It has something to do with assumption based expectations on why they likely form traps in those 3 sequences in 2 versions more often than not. For example, if you ask beginner bull biased trader, where should asset go once it squeezes and consolidates as such on image below:

Chances are you would get the majority answer: It should go up. If you haven't seen 1000s of charts of small-caps yet (from beginners perspective) then "assumption/logic-based answers" are what forms answers and predictions. "Well it was strong before, and buyers are holding support, so it's going higher." Meanwhile, that is probably why "microshelves" are such an effective trap for market makers. They know that it's this mentality that will put traders often on the wrong side of the move.

It is not too uncommon that after a frontside squeeze above HOD especially followed by very controlled consolidation we get a dump instead:

If riggers flush such consolidation with fast-snap wash, what will longs do? They will stop out likely. This brings us to another point explained lower, how they use intentional snap-washes to stop out longs in consolidating structures, absorb those offers, and push price back up on uptrending tickers. Which then forms type4 pattern.

Basically longs are "kinda right in the end" just that they get stopped from trades before getting rewarded. That is common how rigged 1000% squeezers go, and why you dont see left and right tons of perfectly executed charts with massive gains on long side of smallcaps on social media and what not, even though that we have some many huge squeezers frequently.

Rigged snap-washes

A lot of long traders will then stop out once support cracks, but they might be even more eager to stop out if wash is aggressive rather than slow decline under support (one big fast candle). A lot of the times riggers orchestrate biggest squeeze candles straight into HOD to create fear effect for shorts (explained lower on article) and for same exact reason they create big wash candles straight under key supports to achieve same fear effect, but for longs. They are orchestrating suggestive behavior to get your liquidity. And then reversing the price.

It is especially key to observe HOW the price flushes out microshelf or prolonged consolidation. If its on single candle, that snaps in huge wash within few seconds: That is RIGGED. Meaning, there is market maker who intentionally flushed out sized position so that price traveled as fast as possible under support level, before any other trader trapped long had chance to sell out near the support level. They do those intentional fast-snap washes, so that every long is selling out-of-the-money and to create scare effect ("oh fuck its done, i better get out").

So what's the point of knowing this? Is it just for academic reasons? Who cares if you can't put it into use right? Well, here is how I apply it on a daily basis:

-If the flush under support is slow, I won't make much out of it in terms of thought process.

-But if flush is very obviously a "targeted clearout" wash, on speed, that could mean that the move is agenda-driven, to stop out longs and collect their liquidity AND most importantly...to then drive the price back up (especially if hot market is present).

So the use case of spotting the difference could help us forward project the type4 setup in the making to some extent, but obviously market context is still key for that (hot risk-ON). -If i see fast snap wash candle under painted support (in hot market) i will typically start thinking long. Especially on ticker that is uptrending. -If i see fast snap squeeze candle through HOD (in colder market) i will think going short. Basically doing the opposite what typical beginner trader would do in each instance.

Also, I need to add that the volume doesn't matter in context of washes. A lot of the time traders think that there has to be some special clue in volume as insight. Not at all. For example, if we take everything said above, that these snap washes are created for a reason to stop out traders well under support level and not close to it, then it makes sense that a low volume snap wash is just as good as high one, as it shows us lack of activity near support level. Meaning traders got caught sleeping and will now be stopping out after the first wash candlestick closes, into prolonged selloff rather than quickly within first snap-candle. Once you understand that, you will not look at clearout patterns through volume as much anymore. An example that sumarizes above such snap wash would be recently FRGT in pre market:

"Scare wash/snap wash" example on MLGO, followed by reclaim and squeeze:

The use case in spotting "painted price action" where we think that a single participant has just created a certain move is by trying to figure out why has this been done, and for what purpose to follow.

However, using assumptions is usually not good idea, we can get stuck in our heads coming up with half baked truths easily.

Best way for me to stay objective is if ticker has displayed particular behavior (or similar ticker to it prior day) already once or twice, so you can lean with assumption on repeating. This way we deal with less subjectivity. For example in case of "snap-washes", having ticker doing it once provides good prior reference, to assume market makers on it, will re-use the trick.

Now, it goes to say that this is a delicate process trying to figure out what's happening behind the scenes, and for any beginner, it takes many attempts before you get anywhere good. It's about balancing everything as how I like to approach it to keep myself objective and out of my head:

-Do I have a hot market? If yes, then targeted washout might be part of the stop hunt, and reclaim follows with a higher chance. If I do have a hot market, the chances of that are somewhat lesser.

-Do I have other recent tickers with type4, clearout, and reclaim going on? If yes, that increases the chances of it happening on the current one. If not, vice versa.

-Is the tape looking controlled?

-Is the ticker moving radically? Spikes, dumps, jittery action. If yes the chances for snap washes to be just liquidity hunts are higher, and reclaims to follow.

-...

Having objective filter criteria for defining price action helps you to stop seeing unicorns everywhere. It keeps you more objective leveled.

You need to be piecing it all together from multiple directions to stack the view since it's not just all about "that one snap wash candle", and by no means do I try to make this article seem like it. There is a very good reason why so few traders put any comprehensive material on manipulations in markets. It's not because it's easy. It's because it's complex. The simplicity is covertly wrapped in a series of variables that each play a different role on the day, leading to outcome differences.

Example of how bull traps are "painted" for sake of type4 clearout and reclaim patterns and then snap washes are often used to shake out longs under the lows of consolidation.

1,2,3-behavior change on rigged ticker

On the topic of behavior edges, changes in behavior specifically, we have ticker GPUS below and a long trade example.

GPUS above is good example of how recognizing behavior change can help us identify long opportunities, and stay away from shorting. Specifically behavior change on "fake breakouts above HOD". Keep in mind, to recognize behavior change, as trader you need to pin towards particular behavior context on the chart. Something "samey" and figure out what price does in each instance. GPUS was good long on 3rd fake breakout because the fade distances after fbos kept getting shallower. Indicating demand aggression. That combined with other facts about hot market being present.

Not many tickers will repeat behavior 3 or 4 times to give us the opportunity to recognize behavior change. For that, the same pattern has to be repeated at least 3 times for us to be able to tell that particular behavior is shifting to strength or weakness. But some tickers will. GPUS was such an example.

We can measure behavior shifts from multiple different patterns, such as type4s (if squeezes are getting bigger), from HOD FBOs (if reclaims are happening faster), from distributions (if declines after support breaks are getting deeper), etc...The idea is to use the same behavior as a guide and lean into it with clues.

For that above, we should also as well plot LOD and HOD levels on the ticker as that will be typically key to having a backbone for measuring behavior in terms of time/speed. So always mark each new HOD and LOD level with line after ticker bounces from it significantly. HOD and LOD level on chart is the most important level, because thats where stop-hunting will take place.

Track repeatable behaviors on rigged tickers

Always track if ticker is displaying same pattern and how that pattern is delivering on price response.

The reason for tracking particular behavior repeating is not just to extract edge on expecting same outcome. It is to track if tickers demand if strength is increasing or decreasing. For example, if we take breakout behavior above HOD as an example, and ticker repeats it 3 times over 4 hours, but in each version it has cleaner break with more delivery (than in first instance) we could be establishing that tickers strength in total is increasing, and there could be even more squeeze happening. Because singled out behavior in context is improving on bull delivery, conceptually:

I track on a daily basis all sorts of behaviors (if they repeat) on small-caps, particularly from the angle of observing the strength progression of the ticker.

I think that many traders would be under the wrong assumption here, thinking that to track behavior repeat is to take trades expecting the same outcome of what happened in 1st, the 2nd, or 3rd sample to repeat on 4th. But that is actually not the primary reason. It's more about tracking "delivery decrease/increases" to see the health of demand.

There are two ways how to extract edge from repeat behavior:

-behavior change edge (inverse of repeat)

-behavior repeat edge

On repeat we basically trade 3rd sample in the same direction as the first two samples, expecting the same outcome. 

On behavior change we trade mean reversion on 3rd sample, expecting this time to be a failure and for the ticker to go the other way. But for that, something about the last pattern sample needs to be suggesting that behavior is changing versus the prior 2 samples.

MLGO black swan behavior change example (or strength in delivery increase from type4)

Many black swan squeezers have in the first-hour key such clues (1,2,3-behavior shift).

This only applies to tickers that actually have same-day repeatable behavior, which not many tickers will have. The edge is then on behavior change (3rd or 4th sample).

Let's take for example type4s conceptually signaling a potential larger squeeze after 3rd sample, in not just conceptual case but also what exactly ticker MLGO from a while ago gave as a clue to stay away from shorting it:

This is what exactly happened on ticker MLGO in March, and why i was strongly bullish biased on it in first hour and through entire day. 3 Type4 patterns are highlighted early on in the move with blue rectangle (did not have more zoomed in chart unfortunately).

Some common repeatable movements on rigged smallcap tickers (especially multiday-runners):

-fake breakouts that reclaim

-type4 patterns

-fake rotations

Obviously it goes without the saying, that for ticker to replicate behavior it needs to be somewhat strong. Heavy fading tickers rarely perform any behavior more than once, especially low liquid fades. There is a lot that can be writen about behavior change/behavior repeat topic, going beyond just article. Personally i think the most useful thing about trading is focusing on repeat behavior and when the change is happening realtime, on the tickers that actually do repeat same pattern bunch of times (keep in mind, not many will actually do that, requires plenty selectivity).

Selling the invetory

This might be difficult subject to write about, because it can seem so unproven, or made up due to no exact proven data of large institutional positions. But just like anything rigged, a lot of concepts have to be discussed via pattern explanation rather than detail-core facts, as tracks will always be wiped clean.

This concept only applies to consolidating tickers. No exception. So what will be highlighted on image below is purely meant for consolidating tickers, as we can never guesstimate how much inventory any large participant has into frontside squeezing ticker, or consistently declining ticker. But on consolidations if more than 30 minutes, some guesstimating can be done.

How to aproximate levels measuring the volume and range for when they should start selling the inventory and how far the squeeze should go, before it makes sense for them to start liquidating? Above guesstimation keep in mind only matters IF we assume and have conviction that ticker will fade and the squeeze wont last. In such case, it can be useful trying to figure out via VPOC where the rigging side holds average price of inventory, and how much of vertical squeeze might be needed before they can unload some good chunk of what they have (usiming some will be sold at loss). Very trial and error approach, but i had some success with it over the years on accuracy. More about that in next article.

Example on ticker WNW and why i took short trade on this ticker near 2,8 and not 2,5 (which is where more commonly i would short):

-If the ticker has a low volume breakout, but has traded very high volume in consolidation, it is likely the squeeze needs to go further before they can create enough room on stock to start unloading (otherwise they would be quickly selling under their average).

-If the ticker has a very high volume breakout above HOD (and very close to the actual HOD level) but is also trading light volume in consolidation then they might be able to start liquidating inventory faster as there is high enough tape activity from other participants shown via volume action to just hammer the bid right away.

Replications

Perhaps you have read my prior article on replications. In which case you are familiar with the concept that riggers in smallcap space often will rig two tickers back to back almost identically. For multiple reasons. But only occasionally, never too frequently for masses to easily spot it.

If you don't trade small-caps for more than an hour daily, you have basically no chance of spotting replication, because only established behaviors give you enough clues, and your memory needs to be in-tune typically with prior days price action as well. So, it's more of a day trader's playground.

FOXO and ASST example here from May, back to back in 2 days split apart. Most likely this is the same player(s) behind the scenes rigging each ticker.

So in short, if there is anything that proves my point that smallcap price action is totally "painted" or rigged as per the above titles, then replications are possibly best clue for that. When two tickers back to back (both rigged) get to be "painted" near identical. Can institutional player orchestrate price action in a very planned and pre-thought out process? Yes IF they hijack float early.

Lets look for overlapping similarities for above image: In this case, ASST and FOXO both were (A) halt squeezers on constant halt-ups. They each had the (B) same gap-start price of around 60 cents. They both achieved (C) similar top prices into a squeeze of 2.5ish. They both traded on (D) somewhat similar liquidity. They both had (E) the same segments of price action structures throughout the day: 1-squeeze, 2-consolidation, 3-clearout and dunk, 4-bounce from support, 5-distribution, 6-some smaller fade.

And remember this is NOT cherry-picking two tickers from a sample of 1000 tickers and finding two that are similar, from random dates. Those are two tickers back to back 2 days apart. Now if you believe that is a coincidence I leave that conclusion to you.

Or how about replication on ASST and KIDZ crypto treasury tickers, highlighted is the opening reaction on both tickers, with a near identical move that later on ends up squeezing into type 3.

Example of my trade for ASST replication above:

So where is then the edge extraction on spotting the replication in play? It's when it starts to click over MULTIPLE variables that they are rigging two tickers that match the same, we trade using the first one as a guide, either long or short, based on current location within total first tickers guide.

The price action has to match up VERY CLOSELY. No sloppy trendlines, no indicators, entire chart PA has to be quite a very close match. Which of course few tickers will do. All replications are always only 1-3 days apart. So don't try to match tickers from today with another from 2 months ago. Thats no longer replication but a cherry picking.

Remember that replicating tickers from market makers perspective within the same week makes sense: To test liquidity on the first ticker and what is possible, and if they get great P/L outcome out of it, doing the same rig on the second one, because the proof is in the pudding. But to never replicate it for too many times in a row where masses start to notice it and become competitive liquidity.

For the case of ASST, the KIDZ traded and completed 1000% (or near it) move a few days beforehand, giving a day 2 chart as a reference, which we could then follow a few days later on ASST. The key was that ASST needed the same opening reaction, same selloff, same bounce up, same range paint, same all. And then the trade came on longing the reclaim of that FBO candle for a larger squeeze into HOD clearout. Which means that replication might in the end creating one or two good trade opportunities, and thats it.

Biggest sqeeze candles are right into tops often

Smallcaps market makers use one particular trick on high frequency: Display price action to be most aggressive around key HOD or LOD level.

-Biggest squeeze candle into HOD clearout.

-Biggest flush candle into LOD clearout.

Conceptually why they do it is shown in the image below, it's all about the psychology of market participants who are RED on position. Yes, you heard a lot of nonsense about trading psychology perhaps, but this is actual fight-based psychology that impacts one decision making when operating with fear and translates into markets for real. What really matters for day traders is FEAR-based psychology. Understand that and you will see how market makers orchestrate price action to make you click out in a worst moment (to collect your coin bag).

Especially if the structure is consolidated for an hour or more, when enough retail liquidity comes in after a while, they will often run this trick. Flush aggressively into LOD so they shake out competitive demand. Squeeze aggressively into HOD so they shake out competitive shorts (if they want to dump the ticker).

Lets display few examples (all from the tickers on the same day, so you can get a grasp on just how much this trick should repeat over the entire year!)

This trick is effective against traders who are OTM (red) on position and lack accuracy. If you use tight stops and are timing winning trades often well, you aren't affected by this. In reality, every beginner trader will struggle with accuracy and timing.

Practically, how did I change my trading approach to address this:

-If I have a good conviction for the ticker to go higher, and the ticker flushes out hard under LOD, I'll seek for long there. Other traders will be stopping out, but if the upside is still actually valid market makers will be absorbing there. So ill long. Using tight stops, no wide stops.

-If I think the ticker should be short after HOD clearout because it displayed fake breakouts above HOD, then ideally I would want the biggest squeeze candle to be through HOD. That's not a strength signal, but a trap signal more likely. That's ideal to short into. Yes, it's adrenaline enticing and seems counter-rational to short into that, but that's exactly how the trap should work to scare out shorts and lure in longs. Again with a relatively tight stop.

If you don't care about the accuracy of your entries, then none of this will matter, because the trader they hunt for is the one that averages in without any concept of reading the "legs". So to avoid being liquidity hunted only applies if timing of the move is also present. Which in reality means- to trade on the side of riggers.

Macro clearout setup on multiday runner

Another highly common setup that in my view is a must for traders in smallcap or midcap space to understand is macro clearout, which more often than not will be followed by fake breakout. Examples of two recent tickers:

If you followed my content over the past years, you are already familiar with the clearout setup itself, where price will swipe HOD or macro highs and then follow up with reject back down.

The reason why in many cases market makers in those specific vehicles do those types of "breakout into fresh macro highs that ends up being just fake breakout" is due to the nature of duration of moves on those tickers and how often dilution or ugly capital structure of companies works against sustaining price.

If you know those are dilutive assets, and if you know that hot sectors (which many of those multiday runners will be part of) are always time-limited to approximately 1 month (sometimes 2). So dilution and short duration of hot sectors prevent institutional market makers from holding those assets for a long time and instead makes more sense for them to be selling into breakouts above prior highs they accumulated inventory (creating fakeout).

The idea is for them to buy inventory up (portion of float) when the theme is still young, and towards the end of the duration of hot sector mania to squeeze it into the "obvious breakout level" where many other longs will be buying late, so the market makers can unload into those late holders. Many retailers are late, because they often wait for strrength to be validated before getting involved on long side. Because they do not approach trading professionally and do not devote active research to markets, they get late at spotting "hot ideas" by the time when that "hot idea" is already well well-late and established. Ever heard the phrase "we are still early adopters" in the crypto space? In 2025? Well, I have, many times. It's ridiculous, as first time i heard it was in 2012, where it kinda was early. But that's how a lot of beginner market participants think.

What's the key takeaway about macro clearouts on hot sector plays?

Context of WHEN the run has started- matters. The run doesn't start when you deploy an eye on the chart and get excited about the idea. It starts where the facts on the chart say where the price started to rally from the bottom up for the first time. Start measuring the "age" of macro smallcap runners from that point on. Age combined with macro clearout plays a significant factor in identifying high-quality short opportunities in small-caps.

The edge is on short side trading macro clearouts. While it may or may not be possible to make edge on longing, the tilt is for sure on failure, if we deal with aged hot sector plays. The ideal version of sample is:

-You want a multiday runner that consolidated for a month,

-then goes into macro clearout.

-Then shorting but giving it first room to squeeze above macro highs first, because MMs typically create the room to trap liquidity in. Dont short too early near clearout level.

Sometimes you'll get 1-week versions, sometimes 1 month, sometimes just 3 days. It depends on how hot the sector to which the MDR ticker belongs is, to justify if shorting earlier or later makes sense. If the market is very hot (risk-ON) and you are dealing with a very hot sector, it is better to be much more patient and go for "aged version rather than younger".

After prolonged consolidation why squeezing price into HOD clearout makes better use for MMs often rather than dumping it instead without the squeeze (while hedged short)?

For example, rigging operator in smallcaps can:

1. Accumulate inventory, consolidate price, build a hedge short position over time, and then dump the long inventory. This was quite a common version in 2015 small-caps, where the short selling was way more black-sheep and therefore less short-crowded.

   
   

2. Accumulate inventory, consolidate price, squeeze it, then build hedge short into the middle of the squeeze, and then start dumping inventory from the strength. This is a much more common version in 2025. It gives them more control, they trap and liquidate more traders, just overall more reasons to do it. It doesn't mean that this is now the only version of delivery, it just means that it has significantly increased in sample size over the past 10 years.

Why from market making perspective of smallcap stocks it makes sense to squeeze price into HOD on consolidated structure, rather than dumping it from the middle of consolidation, in highly liquid ticker with tons of shorts and longs participating in modern 2025 market, if under risk-ON:

In summary, they liquidate and trap more traders by doing type1 squeeze-HOD clearout-dump (right on image) rather than consolidation-dump (left on image) patterns.

However I believe that sometimes when tape (orderflow) on the ticker is very quiet they have no other choice but to distribute and flush straight through the support, because if there is not enough action on the tape, there is nobody to trap. Or if ticker is highly demand (long side) on participation on consolidation, the operator might not want to squeeze the price as too much competitive selling would show up into squeeze (longs selling gains).

When we as retailers watch the tape, we can't know which order is inorganic (rigger) or organic (normal market participant) but obviously, they know, if they dominate the orderflow. So via volume extraction, they can decide the plan in mid flight (extracting their total traded and currently held shares vs the rest).

Example of ticker LUCY below with type1 squeeze and micro shelf before they rug pulled the thing:

You need to put yourself into their shoes to understand why squeezing past HOD if ticker consolidates for a while (like LUCY ) might be beneficial (as long as enough both longs and shorts are active):

They have two options on rigged ticker, when they consolidated it for a while and accumulated bunch of shares/inventory:

-Flush the inventory from the weakness (but cant hedge short, because their sells on inventory net long compete with short-offers and can derail price too fast south quickly)

-Flush the inventory from the strength after squeezing it out first (you get to sell from higher price, on higher volume, while also able to hedge short by pushing price into short-offers without competing on your inventory)

From their perspective, it just makes sense to squeeze as hard as possible consolidating ticker (if active tape from other participants) so that they:

-attract fresh breakout longs into a major strength

-scare out shorts into a strong breakout

Therefore creating the liquidity event which creates a lot of buying on HOD clearout from organic market participants, that ends up benefiting them to unload their inventory into, right into clearout and afterwards more. The inventory managing MM will use that breakout/clearout as a "get rid of the inventory and hedge it short" event. Organic market will be buying, while theyll (riggers) be pushing offers into that.

 If ticker is destroyed in the process, they made P/L on the way up and on the way down, so it matters not from their viewpoint. This version of ticker (Type1 trap) is getting more common as years go by, because smallcaps are getting more both long+short crowded, making more P/L for liquidity hunters to run this rather than just consolidate-dump version.

It doesn't matter if the ticker is short crowded or long crowded, as long as there is action from either of the market side, the riggers can do Type1 pattern in my view with HOD clearout. That's why HTB ETB doesn't matter in terms of changing patterns outcomes. All they need is to get bid from other market participants into and above HOD clearout. Who forms that bid, whether fresh long buyer or short that is covering as stop loss, it matters not. A buy is a buy.

As the image above suggests, is that we can have:

(A) a ticker with 0 borrow access for any trader out there, but if the ticker has tons of action from longs, the riggers can do Type1. Or

(B) The ticker which has dry action from longs, but is ETB and has tons of shorting, they can do Type1 as well.

Both versions (which are exact oposites) lead to a increase in bid activity above HOD clearout likely. If you understand this component, you will forever see the shorting of small caps in a different light. All the rigging side really needs is just: activity. Any. Not specifically a short or a long, but someone who presses long or short button. If enough of those are active on the tape across the day, they can decide to go for Type1 squeeze (followed by dump often).

This is why from my years of tracking patterns, there is no clear pattern outcome difference between ticker that is ETB or HTB in terms of will it squeeze or won't squeeze, or will it have a massive dump after Type1 or just a tiny unwind before going higher. If you understood the image above, you'll know why. It is a very important subject to comprehend, especially for short sellers.

Painting them lows very clean -its a bate for longs

You have to understand that in the price action market making the concept of "behavioral herding" is the most powerful tool/weapon they have.

Price structures can be "painted" aka order flow influenced in a particular manner so that support levels or resistances can be super cleanly defended with intent to lure particular side of the market into a trap.

The cleaner the support is created with consistently bouncing lows, the more longs it will often lure in especially IF created after a strong upside move. Beginner participants will likely chase long into such structure thinking that buyers are defending at a high price:

From the perspective of the rigger:

If they have accumulated large inventory on the way up of the squeeze and they are looking to unload it now, instead of just straight dumping it:

-Creating consolidation with perfect defended lows will attract many longs into high prices,

-Allowing them to hedge short a good amount of their net long inventory into other bidders.

-And then as all other longs are sitting ducks up there, the riggers can start to dump their long inventory, meanwhile, as they managed to hedge short. From my experience of observing other traders thinking:

-longs will often see perfectly painted support as reason to get involved

-shorts will often see perfectly holding support as reason to not get involved

So the rigging operator as net-net result gets less offers and more bid up there. Just before they are about to pull the plug. Hence creating strategic reasons to paint such price action especially if its into the frontside squeeze.

This process is outlined below, again, very important to understand why price action is so manipulated and can be so, on a continuous basis without riggers getting in trouble too often, and why creating "perfectly defended support" and then flushing right through it makes sense from their perspective:

Do you know why such perfectly painted-precise price action is so much more common in high-liquid tickers (futures markets especially) where shorting is easily accessible on a big scale (vs hard to borrow assets)? Because rigging operators can very effectively hedge shorts against their net long inventories, creating any outcomes they want.

But wait, that doesnt make sense?: If the ticker is super liquid, then we would assume that tons and tons of random market participants are to influence its behavior. So price action should never be in such cases "perfectly painted" and coordinated. The more liquid, the more random it should be, due to the sheer scale of participants. Yet exactly the opposite is true often.

Again to repeat myself why that is:

-access to tons of shorts

-huge institutions that have buying power to hijack the floats

This combo gives them access to rig anything, including Bitcoin and gold intraday.

This also means...that if they were to rig high liquid assets, it makes sense to project price action often as perfectly as possible, in order to maximize the trapping effect. So that summarizes this subtopic of "perfectly painted lows".

Fake rotations

A very common pattern of rigged price action is fake rotation. Those can be sometimes good shorting opportunities. And sometimes we long those and get stuck or stopped out. It is rather an effective way to trap longs, i have been on the wrong side of that pattern many times over the years. Once the price declines under that 50% of the rotation leg (where VPOC is on structure) it is usually best to cut and get out if long. Or if thinking short, to get in.

  Something to keep in mind: Most fake rotations share one common overlap: Heavily painted-suggestive price action within the consolidation. This means the lows will be clearly defended, and the highs will follow a perfect trendline with lower highs. It goes to the prior subtopic mentioned above about projected-perfect price action. And what's it for? The reason why fake rotations work (to trap) is due to the prior structural context of HOW price has behaved in consolidation. It's very important to be aware of that, so that we know how they are trying to get us got. More about that on another article.

Same rigged pattern (fake rotation), same initial outcome but different bigger picture outcome.

The reason for outlining this below is to keep in mind everything written about the rigged price action in this article: It is never about spotting a pattern and looking for massive delivery on the move. Trading rigged edge is more often about 1-2R trades than catching 5 to 10R bangers. So both below patterns initially repeated the same fade delivery (where the edge was too short into fake rotation and covered into support wash) but not to look for a huge fade (which the right side ticker gave, but not the left side).

Trading rigged-read is about catching legs, not catching full outcomes.

To type4 or not to type4 before the squeeze (aka flushing out support before the squeeze)?

One of my earlier research topics in #trading #smallcaps was to gather tons of consolidated structures, and then isolate only squeezing versions, and find out in how many (A) support is shaken out first before the squeeze happens, and in how many cases there is (B) clean squeeze with support staying untouched.

The results in the hot market were very elevated to the clearout+reclaim version. It totally makes sense. In the hot market, the rigger will have more demand competition. So they shake out everyone from the train before squeezing to the intended price.

Why was this research critical for my view of markets? Because we are inclined to think that every consolidation in a hot market should by default go cleanly higher into the breakout. Stats will tell you (and agenda reasons) that you should equally if not more expect a dirtier version of delivery if anything. We are meant to assume, if market is hot, and tons of longs are on it, the demand will win out the fight from supply, and ticker will squeeze. But that assumption has one major weakness=this is only true in honest non-rigged market. This is why its no surprise that so many consolidations of smallcaps on 1000% squeezing tickers will actually clear out support levels before they push them more. To toss out competitive longs before launching the rocket. Another great example that assumptions and real data can be two opposites. In fact, the market makers would use common assumption intentionally as trap.

If we were to isolate just the cases where tickers squeeze from consolidation where support level is clean and un-broken and ask ourselves: In how many cases does price just:

- squeeze directly up (clean) from the consolidation structure without breaking support first,

-shake out longs first with demand clearout and then squeeze up

Examples would show us that in hot market, its not uncommon to see support first getting swiped before price squeezes up, even if it doesnt make sense:

All three tickers above are from risk-ON market with strong cycle in smallcaps.

Or another type4 on AREB from few months ago, where they cleared out demand on catalyst release mid-day and then squeezed into HOD to take out the shorts too, basically stopping out both sides of market participants:

And another version of replicated type4 that is similar to AREB above, but happened twice on same ticker ADGM, on smaller strutures:

There was good short opportunity on ADGM taking that second HOD clearout, assuming it will dunk just as hard as first one did.

Above research years ago has highlighted to me, that being aware of type4s in hot market is key. Which requires a very unusual type of mindset to bring yourself long on a ticker that has just flushed out support and looks "baked and done".

Animal kingdom and rigging the behavior for shephearding

A great example of orchestrating herding behavior or rigging the herd is the Border Collie, an intensive, and super loyal dog breed, which above all other dog species has leveled rigging of other species behaviors the furthest (but unlike human macro riggers will stay loyal to owner and its species at no harm created).

A lot of insights replicate straight into how market makers similarly in small-caps orchestrate the order flow of organic participants in markets and push them exactly where they want to for liquidity exchange reasons.

If you study closely all the micro tricks the collies use, it goes way beyond just "stand in front of sheep and it will go other direction".

Often they have to handle stubborn sheep using behavioral rigging of the same-same-same-step-up trick (1-1-1-2) that ends up moving it into a scare/change stance. I have explained this trick in my older article in regards to Mordhau in gaming sphere in regards to feint move after symmetric behavior. Highly psychologically effective against players without enough millage. Another trick collies use is bitting sheep just slightly/lightly (without harming) so from the scared surprised standpoint those animals are more likely to bend to the wanted direction that Border Collie will suggest in the first place. Not because they are hurt, but because they are surprised and no longer under no-fear stance. In same way how bear trader that is red on position and is taken for a ride into squeeze is no longer under no-fear stance.

Fake aggression is another effective trick that collies use, bending down and posing explosive moves which have no follow-through, just to get the change in sheeps momentum starting. In exactly the same way riggers will use biggest explosive candles to start changing momentum on tape, as explained above.

Dont spoil all the rigged fun

Did you know that insights about about rigged markets can be shared, but they might still take so many execution attempts by a trader to get it right and to apply correctly that many retailers who try to apply it, will still fall off the wagon before getting there?

So it kinda doesn't matter is what you are saying? Not at all, in summary, any good insights (especially if very counter-productive and strange) take a tons of practice to be implemented well. "Aha moment" is only a start, then it still takes tons of executions to flop on doing what aha moment suggests in first place before doing it right. Many will give up before that. Thats how it is. Thats why market makers win in the end by majority, over 100 samples.

Even if it makes sense of how manipulations work, still every single pattern needs so many repetitions, and so much real-time clarity (to not freeze) every time to execute well.

Liquidity differences between the tickers also make each pattern slightly different enough that it makes it easier to stop out on ticker with wide spread because you just get scared of slippage due to bid/ask hole, even if you have 100% right read on it.

Having good and conviction and read on manipulations can lead to oversizing and not being willing to cut because you think you know "what their agenda is" so much it can make you create large loss and stop out at the worst moment, just before everything you thought turns out to be true in delivery. Bad liquidity and too much conviction can work against you, unless you REALLY have consistently high enough read on THEIR agendas.

Manipulated markets are already hard enough to trade for someone who spent thousands of hours studying it, let alone for a beginner in markets.

As beginner in arena: You have your sword ready, your shield ready, and the people are cheering for you up there in arena, but oh wait...the sword is made out of wood, the shield is made of paper and the cheering crowd (social media) just wants you to see get ripped apart, that's what they came for on social media, so they feel better on some days... Some not all of course, there are still always those who honestly wish you to survive and thrive, so they can have you as an inspiration. A little guy fighting the elite (market makers) and making it, trading in the end is the true underdog industry field, religiously in core.

Also take a lot of what I said with a grain of salt, because a lot of rigged things can't be proven with mathematics or government stamp on, other than having tons of pattern examples that point towards unlikely coincidences.