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Marketmakers

Market Makers in Crypto: Who Controls the Cryptocurrency Market?Functions of Market Makers Market makers perform several essential functions in the cryptocurrency market, including: Providing Liquidity: They ensure there is enough liquidity between buyers and sellers to maintain active market participation. Providing Quotes: They offer bid and ask prices at any given time, facilitating trades between market participants. Risk Management: Market makers manage trading risks and maintain a balanced risk-return ratio to protect their interests and those of their clients. Providing Advice: They supply market information and analysis to assist clients in making informed trading decisions. Improving Market Efficiency: By reducing the spread between buyers and sellers, market makers enhance overall market efficiency. Market makers in the crypto industry operate similarly to traditional market makers. They provide market liquidity, execute buy and sell orders instantly, and earn profits from the spreads between these orders. However, due to the relatively unregulated nature of the cryptocurrency market, there is no stringent code of conduct for market makers, and the technical demands for ensuring transaction security are higher. Market makers follow a simple principle: "buy low, sell high." This approach requires handling large volumes of transactions, sometimes up to tens of thousands per second. They use advanced algorithmic programs to monitor numerous parameters and recalculate forecast prices multiple times per second, thus providing market liquidity without incurring losses. Despite this, even sophisticated trading algorithms can falter due to rapid trade speeds or incorrect price predictions. During periods of high volatility, market makers might incur losses while trying to stabilize the market. Therefore, a stable or slightly fluctuating market is ideal for them, while days with significant price movements can lead to substantial losses. In essence, while regular market participants react to past events, market makers anticipate future market movements to set optimal buy and sell prices and determine order volumes. Cryptocurrency exchanges and market makers often collaborate closely. Some exchanges maintain their own market-making teams, while others partner with third-party market makers. This cooperation can take two forms: Direct Cooperation with Crypto Exchanges: Exchanges offer special programs for market makers, providing personalized trading terminals. Through APIs, exchanges share order book information and market depth with market makers, facilitating pricing and matchmaking. Indirect Cooperation with Crypto Exchanges: Market makers provide over-the-counter (OTC) market-making services through intermediaries or platforms. Market makers are crucial but not mandatory for liquidity provision on crypto exchanges. They must negotiate terms such as commission distribution and trading volumes with exchanges to ensure profitable and smooth cooperation. Additionally, they must adhere to exchange rules and external regulations to ensure legal compliance. From a trading mechanism perspective, market makers with internal exchange connections play a significant role in price determination, which can help prevent price manipulation to some extent. Their presence enhances exchange liquidity, improving user experience and loyalty, and making the exchange more profitable. Consequently, exchanges often offer discounts to market makers for their activities. ✅Disclaimer: Please be aware of the risks involved in trading. This idea was made for educational purposes only not for financial Investment Purposes. --- • Look at my ideas about interesting altcoins in the related section down below ↓ • For more ideas please hit "Like" and "Follow"!
BITSTAMP:BTCUSDEducation
by Crypto4light
Lesson 1: The Market-Maker's GameLet's look at how market-makers succeed in trapping you and I in the market to make billions. These techniques, when grasped, can have an immense positive influence in your trading. Market-Makers use areas of support and resistance to accumulate/distribute order blocks. This creates massive liquidity for them to be able extract big profits, leaving the ordinary retail trader holding an empty bag. ---------------------------------------------------------------------------------------------------------------------------------- 1. Support was broken at the 0.79000 zone. They break support zones like this to trap all the SELLERS. those who placed STOP LOSSES at 0.77400 anticipating price to go down are kicked out of the market before price starts to climb higher and higher. This is the biggest reason why traders wonder why the market kicks them out before it moves in their desired direction. It's as if someone is watching your trades. Well, market-maker can see where most STOP LOSS orders are placed. They push the price to those levels to wipe traders' positions. 2. The maker-maker's intention is to take the price up without being too transparent. Their intention is to make you believe that price is headed downwards when in fact it's going up. Their first target in this case is the 0.98000 zone. When price gets to that zone both BUYERS and SELLERS will be shaken off the market so that they can take the price up some more to the 1.2500 zone (3). 3. At 1.25000 more manipulation will take place. At that price level a lot of amateur retail traders will be thinking that price is still going up. What ensues then is a big drop. Maker-makers would have now trapped BUYERS to create liquidity for taking the price down. This is critical to understand. If you can trade how MARKET-MAKERS are trading you'd be able to extract profits off the markets on a consistent basis. --------------------------------------------------------------------------------------------------------------------------------------- Do drop questions in the comments section. I will be ready to answer.
Education
by SMCSmartSniper1
Who is the MARKET MAKER and how they manipulate the market ?!!!!-WHO ARE THESE PEOPLE, WHY ARE THEY SO MEAN AND MANIPULATIVE -I SWEAR I WILL NEVER TRADE CRYPTO AGAIN ITS ALL PUMPS AND DUMPS -AAAGGHHH NOT AGAIN....they stop hunt me again and I am rekt once more. -THESE MARKET MAKERS ARE FULL OF ---- . yup, we have been all there my friends I get your feelings, I really do! but you think market makers are evils and are here just to manipulate the market? for real? bare with me for a couple of minutes and I will break it down for you. WHO IS THE MARKET MAKER A market maker is a simple man, but this simple man has a lot of money and with a great amount of money, comes great amount of power. let me borrow a sentence from 'investopedia' so I can introduce you to this simple man: "The term market maker refers to a firm or individual who actively quotes two-sided markets in a particular security, providing bids and offers (known as asks) along with the market size of each. Market makers provide liquidity and depth to markets and profit from the difference in the bid-ask spread." did you notice that? "Market makers provide liquidity and depth to markets.." so it is fair to say that their existence is crucial for every market. without market makers, there may be insufficient transactions and fewer investment activities, which means you can not buy your favorite altcoin/asset at a certain price because there is no one willing to sell to you. it's simpler than you think, market makers provide deals in the market, they offer 'x' amount of securities at a given price (bid) and also offer to sell 'x' amount of securities slightly higher than where they bid (ask). When an investor initiates a trade they will accept one of these two prices depending on whether they wish to buy the security (ask price) or sell the security (bid price). I also borrow the last sentence from 'investopedia' xoxo HOW DO MARKET MAKERS MAKE PROFIT? the difference between their bid price and ask price is what we call 'spread'. if the bid price of a stock is $10 for example, and the asking price is $11, then the spread is $1 (or 9%). if I buy one share of that stock at 10 and sell it at 11 I will put $1 in my pocket as profit. but market makers make a trade with spreads as low as $0.01. why? we will get to that very soon, what important here is that even in small spreads you can make a lot of money if you are investing with A LOT of money, and boy they do have a lot of money. as I mentioned earlier they keep the spreads really low for multiple reasons: the obvious reason is to make the market moves slightly with a natural flow which we can witness in liquid markets such as forex or Bitcoin for instance, the orderbooks are always tight. another reason is the exchanges that offer different market makers to come and heal their order books and 'depth'. so there will be a domestic rivalry between market makers as well in order to execute their trades before anyone else and they will keep the spreads as low as possible. another quote from 'investopedia' which is the sponsor of today's article (lol): "Market makers must operate under a given exchange's bylaws, which are approved by a country's securities regulator, such as the Securities and Exchange Commission (SEC)." WHAT WILL HAPPEN IF THE SPREAD IS HIGH? you will die.. Nope, it was a stupid joke ffs when the spread is high the depth of the market is shallow, and when the depth is not deep enough, any player with a fat bag can move the market in any direction that they want. what is this 'depth'? glad you asked: "Market depth refers to a market's ability to absorb relatively large market orders without significantly impacting the price of the security." (by order of the investopedia) Market depth can be evaluated by looking at the order book of an asset/stock/..., which consists of a list of pending orders to buy or sell at various price levels. On any given day, there may be an imbalance of orders large enough to create high volatility, even for stocks with the highest daily volumes. are we done here? you all understand? good lets move on BUT WHY ARE THEY SO EVIL? It's all about business darling, a man gotta eat and feed his familia. these market makers usually work on behalf of large institutions, and they are brokerage houses that provide trading services for investors in an effort to keep financial markets liquid. but they can also trade individually and make some profit on their own, this is where they manipulate you with fake breakouts and deviations and upthrust and springs and blah blah blah. without market makers trading won't be fun ;) thanks for baring my none stop nonsense writing, although I put a lot of hours behind my research so I don't falsely deliver the wrong information! so leaving a like and comment will cheer me up a lot, and although I don't have A LOT of money to be a market maker, I have A LOT of free time to create content such as this. (follow me :D) the next article will be about the taker buy-sell ratio !!!!!!!!!
BITSTAMP:BTCUSDEducation
by CryptoSep
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