Capturing Market Maker Moves Who is the market maker?
A market maker is a market participant who buys or sells a large amount of a specific asset in order to provide liquidity to the market and to make the financial market function smoothly. Generally, institutional investors such as investment banks are market makers.
Most Crypto trading companies are market makers, and so are many banks. Market makers offer sells (supply) to buy orders from customers (we the retail traders) and buys (demand) to our selling. This can provide liquidity to the market, reduce transaction costs and facilitate trading.
We can buy and sell as much as we want, when we want, because marketmakers are always in the middle of trading. Crypto is said to be a non stop 24 hrs transaction, in reality it is made up of market makers intervening to provide insufficient liquidity.
Understanding the ideas of market makers is very important in understanding the Crypto market. Because, for us individual traders, it is the “opponent” itself.
Individual trader vs market maker
To beat market makers (though you can’t really beat them, VT traders can!), you need to understand the purpose of their activities. Market makers are also traders and their purpose is to make money just like we do.
The main difference between market makers and individual traders is their ability to access large amounts of money, market makers provide liquidity to the market. In other words, they can move the price to some extent by increasing or decreasing the number of orders flowing in the market.
Market makers do the following to generate profits from the market.
1. Invite traders to take positions.
This is achieved by using different price fluctuations to “trick” the trader into taking a position in a particular direction and then reversing it again. We have seen a lot about the importance of Crypto and zero-sum games for a long time, but in order to make a profit in the market, you must first have money on the table (market). To make money in poker, you don’t have to make a strong role, but when you have a strong role, you can win by raising a player who looks weaker than you and increasing your stakes. For market makers who have a full view of the position of individual investors and have a large amount of money, it is almost meaningless to predict price movements, and it is more important to find a duck that will lose even more. Create a situation where you want to enter in a specific direction and use it.
2. Create panic and fear to induce traders to make emotional trades.
This often includes:
⋅ Soaring and plunging
⋅ Spike candle
⋅ Indicator announcement
⋅ “Unexplained” price movements
3. Make a stop and clear the board.
You will be forced to execute a stop and be forcibly removed from the trade. The price range that many traders put a stop on is the best spot for market makers who want to take advantage of their stop prices to fill large orders in the opposite direction. Let’s reduce the damage of stop hunting by devising the position to put the stop and the loss cutting method.
After all, our goal as a Crypto trader is to trade with market makers and ride the waves they create. To do this, we need to think deeply about what the loser mass traders think and why they lose. The method of trading should essentially be based on the points that other duck traders lose (that is, the points that their analysis makes a mistake). This is why general technical analysis often fails.
First of all, if you stop worrying about price movements and try to look at the chart while thinking like a market maker while using the viewpoint of supply and demand, you should be able to realize something that you have never seen before.
Even if price movements cannot be completely predicted, it is possible to predict to some extent the entry points and stop-loss points of other traders. When reading the charts, by considering the perspectives of other traders (retail traders), you will be able to understand the ideas of the market makers that supply liquidity to them.
Trading Candle Market Maker Moves – White Candles
So far we have seen regular Black candles and Green and Red as usual candles in charts. To identify this Market Maker moves White candles are introduced bordering Green and Red lines to identify the Buy and Sell moves. Since trading is a zero sum game , market movers make money by pushing the price against the crowd , in order to make that sudden rise or spike in price happen followed by sudden fall or crash in price . Both this push and pull in price is done by market making orders. And it exactly returns back to the same level from where the price is pushed UP or DOWN, this can be seen evidently recorded on charts again and again matching and nullifying the sudden rise or fall in prices and this is more evident in all time frames.
In the chart shown (BTCUSDTPERP 4 HR time frame) one can see visually where the Market maker selling order started followed by a U turn to the same level, and then followed by the subsequent round of sells and again matching the same levels on rise , this happens again and again on all time frames.
To make it a full circle , the chart may end up at the price from where the SELL begun as shown in RED arrow
The same is true in the BUY side , after the price rise is evident, fall in price is expected to complete the full circle.
BTC fall was evident from where the price started to rise exponentially (in 3D time frame), upon rise and reversal the price is expected to reach again from where it started its sudden fall as shown in the GREEN area.
As a trader knowing from where the fall started and rise in price happened, one can go LONG or SHORT reading the charts. The price is shown explicitly as numbers on all market maker candles. Using this one can easily predict the next move in price. If it’s DOWN , then the price going UP is evident . If the price is UP then the price going DOWN is evident.
Check charts at tradingcandle.com and trade wisely.
Happy trading and spread Crypto love messages to others.