A term spoofing is a form of market #manipulation where traders’ places FAKE orders which never intending them to get filled by the market, its been mostly done by #Algorithms & #Bots to manipulate the market by creating a false sense of Demand & Supply, in this method typically, traders who attempt to spoof the market use bots or algorithms to automatically place orders to buy or sell. When the orders get close to getting filled, the bots cancel the orders.
Spoofing happens in all the markets like #Stocks, #Commodities, #Forex, #Crypto ETC. The main idea behind spoofing is trying to create a false impression of buying or selling pressure. For example, a spoofer may set a large number of fake buy orders to create a false sense of demand at a price level.
Then, as the market gets close to the level, they pull the orders, and the price continues to the downside.
Spoofing is illegal across many major markets, including the United States and the United Kingdom.
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