Can Stock market be manipulated by social media account?

Stock market investment is lucrative money making option. People often see it as a vast ocean of money and try to float in it. But at the same time it is considered to be risky. Without any investing knowledge and ideas, investors may fell into a trap. Stock markets rely on sentiments and there are chances of share manipulation. Especially when it comes to pump and dump which is easier way of manipulation.

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Pump & Dump is a scheme where the price of a stock is artificially increased through misleading statements, and then the stock is sold to make a profit. This is often done with penny stocks or some some newly listed shares in the stock market. With market heavenly relying on news and statement, I was wondering can a social media account with a large follower base able to influence the price of share?. Having a strong follower support they can pump the prices and also have the ability to dump on booking heavy profits 📈

With the curiosity to learn the trading basics and earn through stock market, I started to look out for some #youtube channel who can give insights about #trading and #investing. Most of these channels were trading based, with hardly anyone focusing on long term investment. Few of these account have a strong user base. They run some online courses over #telegram and #WhatsApp channel for their followers for swing trading. They give tips and suggestion on particular shares. They timely judge the price breakout zone through analysis and hints at possible investment option.

The Youtube influence

Lately, I am taking note on one partular channel, who really influenced me with their "near to perfection" prediction. Whatever shares the channel recommends pumps quickly and then comes backs to their original price. It happened with multiple stocks in last few weeks. Few of their recommendation were newly listed IGIL, Mobikwick, EIEL etc. The day they recommends these stock, the next day saw a heavy buying pattern. Pushing the price of the share as high as possible. The trend remain same for next day and soon I saw a "dump" pattern, pulling the price back to its original or below zone.

Having s strong user base with more than 100k followers, it is easy for these social media account to manipulate the market on their own term. They might develop a inside group of close knit traders who invest heavenly on a particular stock to pump its prices pulling other investors interests to put their money. Once they achieved their target, they start selling, fuelling manipulation in the stock market. These kind of Market manipulation is illegal and aims to benefit from investor impatience. It can be difficult for institutions to detect and prevent.

Reflecting on their recomendation, I did carried away and made some profits as well as losses. Being a small investors I am feeling pretty safe , acknowledging the way they are playing with investors sentiments.

Familiar scamming instance.

Recently, scams related to stock market trading were unearthed in India. Young investors in the the hope of some quick money invested their money on several firms who promised that they would get huge returns by investing in the stock markets. The firm allegedly raised hundreds of crores and ran away. The scams brought back some old memories of different stock markets scams that were done previously.

Now with social media in place, new investors should be aware of the various risks and invest wisely through their own research. Be smart and invest smartly**. Beware of influencer and social media account for possible manipulation.

In good faith !

Posted Using InLeo Alpha