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MarketMaking and MarketMaker. What is it and who is it?All participants in financial exchanges can be divided into two categories - market makers, who set the mood in the market, and market makers, private investors with small capital. Market makers ( they are in minority ) will always manipulate market makers ( they are in majority ). What is a market maker, who he is, what he does at the exchange and why he is needed? WHO IS A MARKET MAKER AT THE STOCK EXCHANGE? This is a professional in the market with very large money, without whom trading is impossible - because this figure is considered a key player in the market and moves the price. Most often, this is the whole financial organization. MARKETMAKER is the one who creates and maintains the liquidity level of exchange , currency , cryptocurrency , futures instruments , etc. It is only possible to make transactions on the market through the market maker, who regulates the processes so that the exchange is not dominated by only sellers or buyers. The MARKETMAKER is obliged to buy even if the market is dominated by sellers and even if it leads to losses. And when the market is dominated by buyers, the market maker must sell in order to balance the market. The main purpose of the market maker is not to make money, but to regulate supply and demand, to maintain liquidity. CATEGORIES OF MARKETMAKERS Large commercial banks, but not by themselves, but united in groups: they are called institutional market makers. Brokerage companies Dealing centers Investment funds Private investors with significant capital. WHY DO WE NEED A MARKETMAKER? It stabilizes the market, controls price movements, satisfies traders' demand. And since large financial institutions take on this role, they can be both sellers and buyers. The market maker makes a huge number of deals every day and ensures the liquidity of assets. The peculiarity of their work is that market makers can support the quote both in the buy and sell direction simultaneously on the same financial instrument, which makes the price move more smoothly and price gaps disappear. TASKS OF MARKET MAKERS Ensure profitable deals for all participants To maintain sufficient liquidity for any instrument throughout the trading session To accumulate orders within the instrument being traded Find and consolidate the best price offers and record them in the price book Provide all participants with information on current quotes as soon as possible WHAT AND HOW DO MARKET MAKERS MAKE MONEY? The best way to make money on the exchange is to be able to correctly predict large price movements and timely open positions in this direction. No market maker can do it on a large scale, but a small impulse is enough to start the process of a large price movement. And for this market maker first forms a trend in the direction he needs, after which he acts in the opposite direction. Thus, the market maker makes a profit, while other participants lose more or less. Since market makers are the first to review current orders, they are the first to find out about the emergence of a trend in one direction or another and do everything necessary to balance the market and not allow a large surge of volatility. For the fact that he keeps the market price of the instrument in the predetermined limits, the market maker receives a significant discount on the commissions. And his profit is the difference between the bid and ask prices, which is called the dealing spread. Because the exchange is interested in maintaining the liquidity of assets, it encourages healthy competition and advocates the presence of several market makers on one floor. It reduces the cost of transactions, increases the speed of transactions and makes pricing transparent. Even the exchange rules often contain a clause that a deal is legal if a market maker is involved, i.e. it is quite a significant and influential market player. HOW DOES THE MARKET MAKER WORK? He establishes a connection with his clients through a program, analyzes the market and executes orders of his broker's clients. Often he prefers to work with mid-sized brokers to have the necessary volume of transactions to make money. Marketmaking. Order-Making and Order-Making. The function of Order-Making is to watch a particular company's stock and make predictions. Order-taking is to execute traders' orders and take additional profits. HOW DOES PROFIT TAKING TAKE PLACE? Like other market participants, market makers can also incur losses, which occurs if a position is chosen incorrectly. But due to the fact that market makers work with large volumes of trades and a large number of clients, they always have an opportunity to cover their losses. Regards! R.Linda!
Education
by RLinda
30
RLinda ! EOSUSDT-> Price shake-up and subsequent sales!EOSUSDT on the chart you can see how the price twice tried to break the price channel upwards, but the second impulse only updated the local maximum and then made a false break. After the surge on the "Pumps" (in fact, a kind of shake-up), the price sells off heavily and goes down to the level of 1.410, the price breaks it and forms a consolidation in the short zone. I assume that if the price can consolidate in the short zone under this level, then we have the potential for the price to fall. The short-term target is the support of 1.27, the medium-term target is the liquidity zone of 1.155 Regards R.Linda!
Short
by RLinda
10
RLinda ! GBPUSD-> testing the support zone. What's next?GBPUSD on the chart clearly sees the downward price channel. The price will continue to be in a global bearish trend and it is logical to take the fact that the price will be in the channel for some time, as there are no preconditions to the break of this set-up. Earlier, the price broke through the consolidation downwards, broke through the first target 1.176 and almost reached the second 1.1600. These levels matter and that is why the price reacts strongly. I assume that in the near future we may see a pullback from the support zone, there are two key zones - the price channel support and the liquidity zone from the level of 1.1600. The short-term target is the resistance of 1.17600. Regards R. Linda!
Long
by RLinda
7
CADCHF BEARISH SWING OFF RESISTANCE?Pair: CADCHF Timeframe: 1D , 4H Analysis: Round number level, trend line, volume profile, support and resistance, ascending triangle, consolidation ————— Key Takeaway: We have seen the level of resistance we are now at hold for a few weeks and price cannot seem to break it. If we close below round number and high volume level then we will be entering short ————— Level needed: need a close by 0.74470 ————— Trade: Short RISK:REWARD 1:5 SL: 15 TP: 75 ————— DO NOT ENTER OUR SETUPS WITHOUT CONFIRMATION
Short
by TheGoldRoom
RLinda ! ETHUSDT-> pullback to the resistance. What's next?ETHUSDT We see a manifestation of the strength of the bears, in the last idea I pointed out all the prerequisites for a further fall. The price is trading in a local downtrending price channel and after trying to reach support at 1355, but not reaching, we see a pullback. I assume since the trend was broken earlier, globally, the bears are strong at the moment and I think the channel resistance and resistance zone may play on further developments. There are several important liquidity zones on the chart, such as 1355, 1200, 1050 and 915, I assume that the price can head in that direction. I assume, as we see a pullback on higher volatility to resistance, I think the level will most likely not be broken, I expect a fall. The short-term target is support at 1355. Regards R.Linda!
Short
by RLinda
22
RLinda ! EURUSD-> Fighting for the strong zone 1.0000EURUSD. The price is at a very important point lately, which is the zone at 1.0000, which is a global and historically important price. On the chart we can see how the sellers and buyers are fighting very vigorously for positions relative to this level, while it is impossible to determine exactly who will win. We have a global downtrend, but there were attempts to break the trend, but when the price approaches the channel resistance - the attempts failed. I assume, if the price can consolidate above the level of 1.000, there is a huge potential for growth. The nearest short-term target is resistance 1.0194. Sincerely R. Linda!
Long
by RLinda
16
General Market commentYesterday I cut half of my open positions. Namely the digestion I was looking to get, in the obvious line of resistance (200DMA) is not acting as per model. Historical Precedent What is different is the way that the market digested the correction. I was expecting much more the a tight sideways digestion on low volume (green) but the action is not tight (purple). Now the low volume is there (red) ! However, this makes me much more cautious about the bullish scenario. The model we wanted was a much tighter action. Do not let low volume mislead you! Check out the correction in 2007. We started on low volume but then on the bottom the down volume picked up. To be honest we never really got to "panic" mode in this bear market. The PutCall, VIX - never really showed panic markers, on the top of that the meme stocks are breaking out. Point being is that it is not impossible to bottom without these but it is unlikely.
SP:SPXShort
by TintinTrading
ARE THE BEARS GOING TO FULLY TAKE AUDUSD ?Pair: AUDUSD Timeframe: 1D , 4H Analysis: Round number level, trend line, volume profile, support and resistance, pennant pattern, ascending triangle ————— Key Takeaway: Saw a big pullback today for this pair up to resistance. We are seeing strength in USD which tells us the pair is going to drop. We want to see a break of bottom pennant and dynamic support before we enter short again ————— Level needed: need a close by 0.68795 ————— Trade: Short RISK:REWARD 1:8 SL: 25 TP: 195 ————— DO NOT ENTER OUR SETUPS WITHOUT CONFIRMATION
Short
by TheGoldRoom
US500 - Reversal or Continuation?Hello TradingView Family / Fellow Traders. This is Richard, as known as theSignalyst. US500 is overall bearish trading inside that giant falling broadening wedge pattern. Last week, US500 rejected the upper bound / brown trendline and traded lower. For now, the first rejection is around the 3950 zone. The 3950 zone is actually a support zone as we had many rejections from it previously, and also a demand as lately we had an aggressive movement upward from it. As per my trading plan, as US500 approaches the blue zone, I will be looking for bullish reversal setups on lower timeframes. Unless the blue zone is broken downward, in this case, a movement till the lower green zone (3700.0) would be expected. Which scenario do you think is more probable and why? Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
U
by TheSignalyst
17
TOTAL CRYPTO MARKET CAP LOOKING BEARISH!The market is currently on route to levels lower in the following days to come. This statement will be justified in the paragraphs that follow. Flag break: The market was trending in a bearish flag formation starting on the 18th of June and has recently broken out on the 19th of August. The breakout target levels for this flag formation puts the total market cap at prices as low as $618b, however there are a few strong levels of support that will prevent a sudden drop in price which will result in a hopeful healthy decline in price. It could be argued that the $765b support could be a bottom for this move as there should be a huge buy back at these levels as it does pose as a strong support, being the intraday low of the flag formation. EMA: Following the break from the flag formation, the price has fallen below the 100 Ema again, after peaking above briefly. This adds additional confluence for the bears to continue strong. Looking back at the previous brief break above the 100 EMA followed by a sudden break under, the current price seems to be playing out similarly to the past move. The following attachment is the example of the similarities of the current price movement. RSI: The RSI is looking slightly oversold however still has some way to go in relation to the previous bottoms at 21.74. This indicator strengthens my predictions on a potential consolidation area in order to build up for another bearish move. My opinion over a consolidation area will be discussed below. Support, Resistances & Fib: The price has broken below a previously strong level of support at $960b, therefore it could be argued that the price will consolidate below this level to recreate the support as a prominent resistance. This level of now resistance is also a 50% fib retracement level further strengthening is position as a key level of support and resistance in the future. The red circle displays the break from the key support: The 61.8% - 65% level is approaching and should hold the price up for some time. It could be argued that the price has fallen into a consolidation area between $972b and $911b. This potential consolidation area would further create health in the price action by making sure the market does not overextend, however due to the current news regarding inflation reduction by the fed could result in the price falling straight through these levels due to massive sellouts however this is all speculative at the moment. I shall be looking into the matter which will be discussed in an article that follows. Feel free to give me your most honest opinion on the current market. Thank you
CRYPTOCAP:TOTALShort
by Crisp_Flow
RLinda ! EURUSD -> Review for the new weekEURUSD is trading in a global downtrend, currently the price is in the critical zone for the last 20 years. After a false breakdown and a test of 0.99000, the price forms a local rise. I have drawn a local support trend line on the chart, which shows how price is behaving. We have a local uptrend, but it is under a strong support level of 1,000, it is hard to speculate what will happen next. I assume that there are high chances that the falling trend will continue, but what the price shows now, can be a precondition for further growth. Regards R.Linda!
by RLinda
8
You Can't Trade on Indicators Alone - Watch the TriggersYou cannot trade on technicals alone. One has to watch the triggers and wait for them to conclude. This was a case in point on Friday 26th August 2022, after the Jackson Hole speech by Fed Chair Jay Powell. Bulls drove the market up just prior to the speech thinking that released economic data was good for a continuation of the bear market rally. Then Chair Powell came on and in a few minutes the market tanked, BIG!!. The big shorts scored here. The bottom line is don't trade on opinions or technicals alone. Watch for the triggers. Triggers are events, economic data and Fed decisions that sway the direction of the markets.
U
by tonyescorcio
BTC market cycles...Anger or Depression Stage 4? Look up that infamous "Wall Street Cheat Sheet, psychology of a market cycle" diagram The 4th stage is the markdown and downtrend. In the very first cycle it looks pretty textbook where stage 1 is a consolidation box but crypto does crypto things...by the time COVID came the stage 4 into stage 1 is a WIDE and volatile type of consolidation which lead to the 2nd markup to ATHs. This year we have inflation, another macro event! Stage 4 into a theoretical stage 1 could end up doing the same, it's definitely not clear cut or this stage extends further down first before a basing type of consolidation. But...the clue is to watch the 40 ma cross/rejection and what happens on this broadening pattern. A clear cross on the ma and pattern break could signal a new stage 1 (can have intermediate steps) in which a new set of unpredictable and volatile patterns form! Btw this is speculative. I could redraw this as well and this could very well still be gigantic top on stage 3 (like cycle 1 pattern breakdown, this entire top here could also be a larger broadening pattern with a failed breakout) But I am looking at it in terms of smaller cycles and patterns but I will keep updating this analysis on it. *** currently *** 1. bear flag 2. 3rd touch on broadening support bounce 3. price moving towards the 40ma 4. will it swing up to test resistance? 5. what/when/if will the next stage 1 base look like? 6. the last cycle just take notice the wide and sideways 1a/1b I pointed out. 7. last cycle lasted 700d, I duplicated that period of time to current cycle. What if it repeats and it lines up right to where the bear flag could hit (channel upwards) the resistance? 8. the 40 ma cross/reject will be something interesting to watch. ...past performance is not indicative of future results...but sure lines up nice!
COINBASE:BTCUSD
by kenloi