You are correct! Short sellers thrive on the notion that they...

You are correct! Short sellers thrive on the notion that they are "the smart money" and use that illusion to keep the small players off balance. They certainly use the tricks of the trade to guide prices and they are not confined by the mechanics of the market or transaction costs. For example their orders are never exposed on the market depth displays unless they want to make them visable for a deceptive purpose. If they are buying, they buy the whole parcel on offer except for a small number that they leave so the published price doesn't improve because of their trade.
They run bots programmed to take the price up or down on miniscle numbers, while their real orders remain hidden.
Never the less they can be defeated. Just holding firm and ignoring their propaganda is a good start.