Market Makers Buy And Sell ModelThe market Makers' Buy and Sell Model is a strategy that reveals the market maker algorithm model for price delivery.
Basically, there are 3 things market makers' algorithms do with price in every trading session, day, week, and month
Those 3 things are; Accumulation, Manipulation, and Distribution.
AMD:
A: Accumulation
M: Manipulation
D: Distribution
1. Accumulation: They accumulate liquidity through the delivery of a ranging market.
The purpose of delivering a ranging market is to induce both buyers and sellers to enter the market thinking that price will go in their direction.
How to Identify a Ranging Market: You know price is in a ranging market when you see obvious relative equal highs and lows price range.
In a ranging market, price swing points have relatively equal highs and lows, that is, the price is neither delivering a higher high nor a higher low.
2. Manipulation: After accumulating both buy and sell orders, they then manipulate the market to further induce another set of traders which are breakout traders.
But, that particular manipulation move is not their intended direction for the day. They only use it to gather liquidity, Which will then lead them to the next action which is to move and distribute prices in their real direction for the day.
Usually, when price breaks out of a ranging market, the break-out is a manipulation to further induce a new set of traders to enter the market, further proving liquidity for market makers' real intended direction.
3. Distribution: After manipulating the price to a particular direction different from their plan, they then distribute the price to their original intended direction.
e.g to buy, they will first sell the market and then buy at the discount price level.
You know a price distribution through clean candles that left imbalances behind and then break market structure away from the previous manipulation move structure high or low to form a new structure.
Example of Market Makers Buy and Sell Model as described on the chart.
AMD:
A: Accumulation
M: Manipulation
D: Distribution
Accumulation: Price range for some time, accumulating liquidity on both sides of long and shorts.
Manipulation: Price broke the high of the accumulation to take out Buyside liquidity and then create a new higher high and higher low. But it's a manipulation move.
Distribution: Price moves away from the FVG leading to a shift in market structure, plus a short pullback, follow by a massive move to the downside to take out sell-side liquidity below.
Entry: Your entry should be inside the FVG created by price before the shift in market structure, you can set a limit order inside the fvg and place your stop loss at the high of the swing high created prior to the fvg and shift in market structure.
The same thing applies to a bullish market.
Basically, Marker makers push prices higher so they can sell the market at a premium, while they sell the market to lower prices so they can buy that market at very discount prices
This strategy can be used in any time frame and all markets including forex, crypto, stocks, future etc.
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