Holding the Market

Holding the market is an illegal strategy that could potentially be used to stop a security from falling. The big problem is that this strategy may not even be worth it.

Holding the market refers to a person placing a large number of buy orders on a down trending stock, so much so that the stock finds support and potentially goes up. This may seem like a good strategy, but it has many downfalls.

1. It is Illegal, except for brokers who try to maintain the price of a security. This is a pretty big one. You cannot simply Force the Market to do whatever it is you want it to do.

There are a lot of people who try pump and dump schemes, but in reality moving the market by yourself or trying to move the market in a group is just an illegal act.

2. It is hard to pull off. In order to place enough buy orders to affect the market you need to buy millions to billions of dollars worth of shares. Not many people can pull that off.

Unless you are a big mutual fund or a billionaire investor you will not be able to manipulate the market by yourself.

3. It comes with huge risks. If you are unable to stop a stock from falling you would stand to lose huge amounts of money. Since it already takes a lot of money to do this if you are unable to push the market higher or stop it from falling you have put a lot of money into a falling position and you will suffer from it.

It is better to follow a trend and not to try to change it. After all if the momentum is pushing the stock downward it is not going to be very easy to push it back up. Sometimes corrections are necessary.