Operator refer to the people who manipulate the market by trapping other traders or retail investors , operator can be anyone , a wealthy individual , a seasoned investor , a group of people with enough capital , even a promoter of a company can act as an operator , the term operator is generally used in a bad way meaning stocks which have operator in them generally make traders loose their money , because chart patterns begin to fail .
So how are operators able to manipulate the market ? They generally enter the stocks with medium to low market capitalization so that they may drive the stock easily , by using their strength of their capital they make technical charts fail , for example they can make a bullish candlestick pattern at an area of value which makes rest of the retail traders think that a bullish setup has emerged , but when reatilers enter the market the operators short it with their whole might thus trapping the traders who entered thinking of a bullish setup which leads to such traders also hitting their stop losses thus further causing the downslide of a stock hence benefiting the operators , this is just one of the ways operators can manipulate the stock , so in totality we can say that operators generally trap innocent traders and make money by duping such innocent traders .
Another famous method operators use is the Pump and dump scheme which is still going on in various stocks , we will talk about this one in the next article as it requires an article of its own , so stay tuned with trading ninja.
So finally we can say that operators are just not some wealthy traders or group of con mans ready to dupe you , they also include influential investors and even promoters of companies , huge investors can make the market move in their required direction as they have huge amount of capital with them thus also putting them in the categories of operators , in the case of Yes Bank we have seen that even company promoters can manipulate stock as per their will , trapping innocent retail investors and traders , so stay away from such stocks if you want to survive in the market.
So how can we save ourselves from these operators ? We can stay away from stocks that are low float , have low market capitalization and low volume and delivery levels , such stocks are the perfect breeding ground of operators , my own rule is that i only trade in stocks of nse nifty 50 or sensex index stocks , i don’t even look at any other stocks , by trading in nifty 50 stocks you can make sure that the probability of an operator manipulating the stock becomes close to nil as these companies have medium to large market capitalizations and are well reputed already established companies , hence such stocks negates the chances of being trapped by operators to a larger extent , but since anyone can act as an operator even promoters we cannot be 100% shielded from them all we can do is negate the chances of getting trapped.