According to MAR's Commission Delegated Regulation (EU) 2016/522 of 17/Dec/2015, momentum ignition is the act of entering orders or making trades with the purpose of "starting or exacerbating a trend and to encourage other participants to accelerate or extend the trend in order to create an opportunity to close out or open a position at a favorable price."
MOMENTUM IGNITION EXAMPLE
Momentum ignition is similar to spoofing in the sense that in both practices the manipulator tries to mislead other market participants into believing that there is an increase in buy (sell) interest, to then trade against them at more favorable terms. Typically, both are high-frequency practices, in which an algorithm tries to trigger reactions in other algorithms to then trade against them at more favorable terms.
However, these practices differ from one another in the sense that in momentum ignition the manipulator's efforts to mislead other market participants actually involve trading, while in spoofing, the manipulator misleads other market participants by placing and cancelling orders before execution.
However, these practices differ from one another in the sense that in momentum ignition the manipulator's efforts to mislead other market participants actually involve trading, while in spoofing, the manipulator misleads other market participants by placing and cancelling orders before execution.
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