The Collapse of the Market Maker Myth: Only Winners and Losers Exist in Capital Markets

Rebeca Moen Mar 16, 2026 09:25

For decades, the concept of the "market maker" — or zhuangjia — has been shrouded in an almost mythical aura within China's capital markets. The binary narrative pitting retail investors against all-powerful manipulators has become so deeply embedded that it is treated as common knowledge. Yet common knowledge is often nothing more than a synonym for collective fallacy. In reality, there are no omnipotent puppet masters in the market. Those who have attempted to control stock prices through sheer capital force have, time and again, met with catastrophic failure. The true nature of the capital market is a multilayered game of predator and prey, where outcomes are determined not by labels or capital size, but by cognitive depth and strategic capability.

Within the discourse of China's capital markets, the zhuangjia — loosely translated as "market maker" or "stock manipulator" — is a concept frequently invoked yet rarely understood in its true dimensions. In the popular imagination of most market participants, the zhuangjia is a mysterious and omnipotent force: an entity commanding vast sums of capital, capable of dictating stock price movements at will, transcending the constraints of both technical indicators and fundamental analysis, and treating even broad market trends as mere instruments of its design. In more extreme versions of this narrative, so-called "state-level manipulators" are elevated to near-divine status, regarded by retail investors as the ultimate arbiters of market direction. Such rumors have never ceased circulating, reinforcing day after day a deeply entrenched web of cognitive distortion.

The binary opposition between retail investors and market manipulators constitutes an extraordinarily simplified worldview of the market. This narrative has gained such wide currency largely because it caters to the human instinct for reducing complexity. When confronted with the bewildering turbulence of market fluctuations, attributing everything to "manipulator activity" is by far the path of least cognitive resistance. It is precisely this intellectual laziness, however, that leads vast numbers of investors to blame external forces for their losses rather than examining their own deficiencies in understanding and strategy. More alarmingly, it is not only retail investors who fall prey to this mythology — many large-capital players who fancy themselves as market manipulators are equally ensnared by the same illusion.

Reality is far more unforgiving than myth. A review of the history of China's capital markets reveals that those who have attempted to corner individual stocks through brute capital force have, in an overwhelming majority of cases, ended in financial ruin. The list of cautionary tales is extensive. Capital size has never been the decisive factor in market outcomes — without a profound understanding of market mechanics, even the deepest pockets serve merely as accelerants for losses. To this day, there remain individuals prepared to deploy billions in pursuit of profits through the antiquated model of stock manipulation. That this mindset persists after multiple cycles of market-inflicted devastation is a testament to how stubbornly such beliefs endure. For genuinely skilled market participants, however, the appearance of such players simply means an increase in available prey. The more conspicuously a capital pool operates under the manipulator playbook, the more swiftly it tends to be devoured.

The truth is that capital markets harbor no such thing as an omnipotent market maker. What exists are only winners and losers. The market, at its core, is a multilayered hunting game: diverse pools of capital, competing strategies, and participants of every caliber coexist in a single arena governed by the law of the jungle. Within this ecosystem, there is an abundance of "prey" — participants whose behavioral patterns are predictable and exploitable — and a very small number of "hunters" possessed of genuine market insight. What determines a participant's fate is not the size of their capital or the label affixed to their role, but whether they possess the cognitive tools and operational framework commensurate with their ambitions. Armed with modest weapons, one can hunt modest game and survive. But to charge at quarry far beyond one's capabilities without the proper instruments is to invite the market to turn predator upon the hunter. The question that matters has never been whether you are a manipulator or a retail investor. It has always been whether you possess the ability to win — consistently and sustainably — in this unrelenting game.

• crypto
• market maker myth
• market dynamics
• investment cognition