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A concept of accumulation and distribution process was developed by Richard Wyckoff. In simple words a smart money sells shares in order to hit its buy limit orders, then starts to buy shares in order to hit its sell limit order. But here are the questions:

1.Who is such smart money? A market maker or some insider?

I ask because i don't know who lead the accumulation/distribution process. I don't know whether this process is planned in advance. That's why i ask a second question.

2.Let's consider a profesional traders who are not marktet makers. Do they place deep inside limit order book buy order and sell order first, then use market orders to lead the price straight to their limit orders?

In my opinion it shouldn't be a common practice. This strategy needs a big amount of capital and it is relativiely very risky. Of course i may be wrong. In this case please correct me.

Regards.

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  • $\begingroup$ Is such a thing not considered market manipulation? $\endgroup$ Mar 15, 2022 at 22:23

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