Market Maker Tricks

European Stock Exchanges are fully electronic, bypassing all these corrupt middlemen and scammers, Why haven't we followed suit?
 
First of all they did/do those things all day, not just at the open.

Second, it was not something that was done in the 90's, it went on until very recently, before all the structural changes.

And it wasnt just MM's , Mutual Funds and others routinely gamed the close.

Maybe they didn't let you in on the scams.
 
I have recently started day trading (2nd week), but I was swing trading for years beforehand. I am really disgusted at what level 2 has become. There must be some kind of code between the mm's, cause the sizes are obviously all hidden, and once in a while they flash the actual sizes 1/10th of a second before the move. Needless to say, I am getting my ass handed to me! I think I might try catching some moves on the NYSE, cause the Nasdaq has become ridiculous. Any advice from successful day traders would be much appreciated!
 
I remember RIMM a month ago, they drove up the stock 8 pts so the institutions could get out at higher prices. I, ofcourse, thought there was some rumor so I bought only to get crushed.
That's my market maker manipulation story.
 
You mean they bought RIMM for their inventory all the way up 8 points, to provide insitutions with nice exit, then ate the losses? What selfless creatures... :D
 
Quote from froggie:

Hi folks,

Anyone in here know if the market makers are aware of and can distinguish between retail orders and institutional orders? I mean can they see if a retail trader is buying or selling? And do they see our account numbers when we place a trade? Answers to these will be very helpful. Also, does anyone know of any market maker tricks that we stock traders should be aware of?

Thanks
More...

The question that you're REALLY asking here is, "Why is it that whenever I trade, the trend suddenly goes against me?"

The answer is simple: Market makers and specialists work for firms that clear their own accounts. And, their proprietary software picks up the account number of those with whom they trade.

So, when the software picks up an account that buys and sells the same security more than once in the same day, the software instantly notifies the market maker/specialist that the account number is a potential daytrader.

And, what do you think happens the next time you trade in that security? If it's an NYSE stock, the specialist will tank or run the market against you in order to lock you into to a loss, and then the specialist will try to trade around you all day long, so that you cannot get out with a profit.

If it's a NASDAQ security, well it takes a little longer because there are multiple market makers, but very quickly, if you trade several times in a day, you will manage to trade more than once with a market maker and from there on out, that market maker will attempt to do the same as the specialist, i.e., run or tank the market against you and then trade around your position.

Are there ways to avoid the trap so that you can ride the waves, rather than be drowned by them?

Um...maybe...
 
Quote from jztrading:

I was a market maker for 8 years with the second biggest MM on the street. I can assure you there are no tricks that would affect a day/ trend/ scalp trader. Also no MM can see your account, that would be a conflict and unethical.I have been day/trend trading for the last two years and although I use my MM experience as a learning tool, I have no advantage over any other day trader.
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It seems we have a conflict here...
 
Quote from kjkent1:

The question that you're REALLY asking here is, "Why is it that whenever I trade, the trend suddenly goes against me?"

The answer is simple: Market makers and specialists work for firms that clear their own accounts. And, their proprietary software picks up the account number of those with whom they trade.

So, when the software picks up an account that buys and sells the same security more than once in the same day, the software instantly notifies the market maker/specialist that the account number is a potential daytrader.

And, what do you think happens the next time you trade in that security? If it's an NYSE stock, the specialist will tank or run the market against you in order to lock you into to a loss, and then the specialist will try to trade around you all day long, so that you cannot get out with a profit.

If it's a NASDAQ security, well it takes a little longer because there are multiple market makers, but very quickly, if you trade several times in a day, you will manage to trade more than once with a market maker and from there on out, that market maker will attempt to do the same as the specialist, i.e., run or tank the market against you and then trade around your position.

Are there ways to avoid the trap so that you can ride the waves, rather than be drowned by them?

Um...maybe...
More...

lol
 
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