“Momentum Ignition” (Ramping) definition :
Momentum ignition, also known as ramping, is a market manipulation strategy where a market participant attempts to create the illusion of a trend or price movement by artificially fueling the order book with one-sided trades. The primary goal of this practice is to deceive other investors into believing that the market is following a specific trend, which may induce them to take positions in the same direction.
Delving into Momentum Ignition
1. Unilateral buying or selling :
The manipulator begins by executing a large number of orders in a specific direction, either by buying heavily (to create an illusion of an upward trend) or selling heavily (to create an illusion of a downward trend). These trades are often executed at prices that do not necessarily reflect the true value of the asset.
2. Creating the Illusion of a Trend :
The massive orders create an imbalance in the order book, which can give the impression that there is a strong and sustained trend in that direction. Other investors may be deceived by this apparent trend and may be induced to join the movement by placing orders in the same direction.
3. Quick Position Exit :*
Once other investors have reacted to the fake trend by placing orders in the same direction, the manipulator can quickly liquidate their initial position, thereby profiting from the resulting price movements.
