Understanding Liquidity and Market Manipulation – Sandeep Kumar Chaudhary’s Way

learnwithopen .ai

Thu, 16 Oct 2025

In the ever-evolving landscape of the Nepal Stock Exchange (NEPSE), where most retail traders follow price without understanding the logic behind it, Sandeep Kumar Chaudhary — Nepal’s first complete technical and fundamental analyst — has brought a revolutionary perspective to trading. Through his institutions, MarketMind Investment Group and NepseBook, Sandeep has redefined how Nepali traders view the market by introducing the concepts of liquidity and market manipulation — two forces that quietly dictate every movement in the financial world. His approach teaches traders not to fear manipulation but to understand and trade in harmony with it.

According to Sandeep Kumar Chaudhary, the market is not random; it’s a psychological and structural battlefield between institutional players (smart money) and retail traders (emotional money). Liquidity is the fuel that drives this battle. Institutions, such as banks and big investors, require liquidity to execute large orders — but liquidity doesn’t exist everywhere. It’s found where traders place their stop-losses and pending orders. This means that the price is often engineered to move toward those zones to trigger stops, collect liquidity, and then reverse in the real direction.

Sandeep teaches that understanding this behavior is the key to trading like institutions instead of being trapped by them. He explains that liquidity is not about volume alone but about where orders are resting. He divides the concept into two types: liquidity pools and liquidity grabs.

Liquidity pools form around areas where retail traders commonly place their stop losses — above recent highs, below swing lows, or near breakout levels. These pools act like magnets that attract price movement. When institutions need liquidity, they push price toward these zones, triggering retail stop losses, and use that liquidity to fill their large orders. Once their positions are filled, the market usually reverses sharply — a phenomenon that retail traders misinterpret as “false breakouts.”

Liquidity grabs, on the other hand, occur when price briefly breaks above or below a key level, triggering stops, before quickly reversing. Sandeep calls this the “smart money trap.” He teaches traders to recognize these false moves as opportunities, not as losses. When a liquidity grab happens, it often signals the beginning of a true institutional move. He advises traders to wait for confirmation — a break of structure, change in momentum, or return into the previous range — before entering in the direction opposite to the grab.

What makes Sandeep Kumar Chaudhary’s teaching unique is how he connects liquidity behavior with market structure and order blocks. He explains that liquidity grabs often occur near institutional order blocks — zones where large buy or sell positions are accumulated. When liquidity is taken, and the market reacts from an order block, it confirms institutional intent. This combination of liquidity and structure allows traders to spot high-probability entries with minimal risk.

Sandeep emphasizes that market manipulation is not evil — it’s essential. Without manipulation, there would be no liquidity, and the market couldn’t function. He reminds traders that institutions don’t manipulate out of malice; they manipulate to execute billion-rupee orders efficiently. He teaches that the role of the professional trader is not to fight this manipulation but to understand it. Once you learn how smart money moves, you stop becoming its victim and start becoming its follower.

He also highlights how emotional trading feeds market manipulation. Retail traders often chase price when it breaks out or panic when it retraces. Institutions know this behavior and use it to create liquidity. Sandeep explains that the “smart money” builds traps using psychology — making traders believe in one direction before moving in the opposite one. For instance, a sudden rally on news might seem bullish, but in reality, it could be an institutional exit zone. He teaches his students to always look at the context behind price movements, not just the move itself.

In his live trading sessions and mentorship programs, Sandeep uses NEPSE examples to show how liquidity plays out in real time. He demonstrates how price sweeps previous highs or lows before major reversals, particularly in sectors like banking and hydropower. His students learn to identify liquidity zones, false breakouts, and institutional footprints— turning what once felt like random market noise into a readable structure.

He also integrates Fibonacci retracement, Smart Money Concepts (SMC), and Elliott Wave Theory into liquidity analysis. For example, he teaches that institutional retracements often align with the 61.8% or 78.6% Fibonacci levels after a liquidity grab, providing excellent low-risk entry zones. These alignments, or “confluence zones,” form the backbone of his scientific trading approach.

Sandeep’s philosophy revolves around thinking like an institution. He often tells his students: “Institutions don’t chase price — they create price.” By studying liquidity behavior, traders can learn to anticipate these creations. Instead of reacting emotionally, they start observing logically — waiting for liquidity sweeps, confirmations, and structural shifts before entering trades.

Another critical part of his teaching is risk management during manipulation. He warns that liquidity traps are powerful but unpredictable. Therefore, traders must never enter before confirmation and must always protect capital with tight stop losses. He emphasizes that patience and observation are the trader’s greatest tools when dealing with institutional manipulation.

Through his guidance in MarketMind Investment Group and NepseBook, Sandeep Kumar Chaudhary has helped countless Nepali traders shift from reactive to analytical trading. His method teaches that liquidity is not your enemy — ignorance is. Once traders learn to see where liquidity lies, they stop trading randomly and start aligning with the real forces that move the market.

In his words, “Liquidity is the heartbeat of the market, and manipulation is its rhythm. Once you understand both, you can dance with the market instead of fighting it.”

Under his mentorship, a new generation of Nepali traders is emerging — traders who no longer fear volatility but use it as a signal of institutional intention. By studying liquidity and manipulation the Sandeep Kumar Chaudhary way, they are building precision, patience, and consistency — the true hallmarks of professional trading.