1. What is Scam Wick?
Scam wick, generally speaking, is a result of human intervention in the derivatives trading market in an attempt to affect users’ profitability.
In general, a scam wick seen in the futures exchange indicates probable human intervention. Scam wicks are long wicks. It refers to the rapid price fluctuation of a certain currency: rebound after a sharp spike shown as a long upper shadow on the K-line chart, or rebound after a nosedive, shown as a long lower shadow on the K-line chart.
2. What are the reasons behind scam wicks on derivatives exchanges?
If investors start futures trading, due to the leverage effect of margin trading, when the price fluctuates sharply within a short period of time, the point reached by the upper shadow or the lower shadow is likely to cause a large loss in the account. When the margin is not enough to maintain the original contract, it will lead to a situation where the overall equity is negative and will result in liquidation, which will affect the profit and loss of a large number of users.
3. How to avoid a scam wick?
Choose a fair derivatives trading platform. The K-line of the BingX trading platform refers to the spot market of many mainstream exchanges as the market data, completely eradicating common problems in futures trading platforms such as scam wicks, malicious trading, and network issues.
1. BingX K-line derives from the spot market and cannot be manipulated by the platform.
E.g., the first 15-min line of BTC/USDT K-line, July 30, 2019.
a) OKX Spot
Open = 9537.8, High = 9702.8, Bottom = 9400.0, Close = 9591.2
Open = 9539.60, High = 9700.00, Bottom = 9420.00, Close = 9588.23
Open = 9538.24, High = 9693.98, Bottom = 9411.31, Close = 9589.41
Based on the above market situation, the BingX futures trading market can be obtained.
Open = 9538.62, High = 9698.92, Bottom = 9410.43, Close = 9589.51
Compare the concurrent K-line data of 4 exchanges
OKX: Open = 9537.8, High = 9702.8, Bottom = 9400.0, Close = 9591.2
Huobi: Open = 9539.60, High = 9700.00, Bottom = 9420.00, Close = 9588.23
Binance: Open = 9538.24, High = 9693.98, Bottom = 9411.31, Close = 9589.41
BingX: Open = 9538.62, High = 9698.92, Bottom = 9410.43, Close = 9589.51
Tips: Due to the reasons mentioned above (It is possible that the market data from any one of Huobi, Binance, and OKX will be excluded from the calculation) as well as the difference in the three exchange’s speeds of publishing data, BingX does not ensure its market data is the same as the mean value of the data from the three exchanges.
For more details of Index Price Calculation of Standard Futures, please click the link below:
Standard Futures | BingX Index Price Calculation
Digital asset derivatives trading is highly leveraged and risky, and may result in partial or total loss of account funds. Before conducting futures trading, investors must ensure that they understand the nature and rules of futures trading, and decide whether to participate in futures trading based on their investment experience, goals, financial status, and ability to bear risks.