Spoofing refers to a deceptive practice where a trader places buy or sell orders without the intention of executing them. The goal is to create a false impression of market demand or supply. For example, a trader might place a large sell order to drive the price down, hoping to buy at a lower price later. Once the price falls, the trader cancels the order and purchases at the reduced rate. This manipulation can mislead other traders, influencing their decisions based on the false signals.Spoofing can also involve placing multiple small orders to simulate activity and entice others to buy or sell. Such practices undermine market integrity and can lead to financial losses for unsuspecting traders.Regulatory bodies monitor trading activities to detect and penalize spoofing, as it can harm the fairness of the market and erode trust among participants. It’s essential for traders to be aware of this tactic to protect themselves and make informed decisions.