Retail trader’s invisible fight with market markers

Market makers are not supposed to take sides, such minimal risk. They make money by charging the bud ask spread.

With minimal risk, they are also not supposed to go bankrupt or make huge sums of money.
 
PPC said:
They do it in both directions.

What they do is that in the morning before the open they look at the orders that they need make market for, and then they’ll take the price in the opposite direction as much as they can (they intentionally start trading against the direction they want to trade).

Say for example they have lots of buy orders, so when the market opens, the market maker will start selling and driving the price as low as he can, and then he will start buying with size at much better prices. (With size, I don't mean that you'll necessarily see large volume spike, they don;t want others to know that they're screwing us, but usually you can spot it if you know what to look for).

They not only do this at the open with retail orders, institutions have guys on the floor and they also do similar games/tricks when they get instructions to fill large orders (which can take days/weeks to fill).

If they get a very large order (say buy order), they’ll work with the institutions and they’ll try to break a support level to get the retail traders (and smaller hedge funds) to sell, and once the sell orders are triggers, then they’ll slowly start buying so they can A) buy at discounted prices, B) so they can attempt to fly under the radar with their volume. The institution which is working the large order into the market doesn't want other institutions to know, so their guys in on the floor often needs to back off, and very rarely will the institution chase the price, they'll just back off if they can't get the price they want.

Fortunately, the institutions are like elephants and they cannot hide, and therefore volume is very important when it comes to reading PA in mega-caps.

PS: the 1rst hour reversals caused by market makers very reliable patterns.
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Yes "they" do that. No it is not manipulation. It is providing liquidity, nothing more. No gun to anyone's head.
 
PPC said:
They do it in both directions.

What they do is that in the morning before the open they look at the orders that they need make market for, and then they’ll take the price in the opposite direction as much as they can (they intentionally start trading against the direction they want to trade).

Say for example they have lots of buy orders, so when the market opens, the market maker will start selling and driving the price as low as he can, and then he will start buying with size at much better prices. (With size, I don't mean that you'll necessarily see large volume spike, they don;t want others to know that they're screwing us, but usually you can spot it if you know what to look for).

They not only do this at the open with retail orders, institutions have guys on the floor and they also do similar games/tricks when they get instructions to fill large orders (which can take days/weeks to fill).

If they get a very large order (say buy order), they’ll work with the institutions and they’ll try to break a support level to get the retail traders (and smaller hedge funds) to sell, and once the sell orders are triggers, then they’ll slowly start buying so they can A) buy at discounted prices, B) so they can attempt to fly under the radar with their volume. The institution which is working the large order into the market doesn't want other institutions to know, so their guys in on the floor often needs to back off, and very rarely will the institution chase the price, they'll just back off if they can't get the price they want.

Fortunately, the institutions are like elephants and they cannot hide, and therefore volume is very important when it comes to reading PA in mega-caps.

PS: the 1rst hour reversals caused by market makers very reliable patterns.
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This makes no sense.
 
Jzwu2017 said:
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Who is foolish enough to spend 2 hours watching these 2 episodes?
At least you should provide the summary.

Market makers must work smartly so that they can bring home the bacon
everyday.
Similarly, retail traders must trade smartly so that they can bring
home the bacon every day.


Is there any video on
CONFESSIONS OF A RETAIL TRADER?
 
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PPC said:
Say for example they have lots of buy orders, so when the market opens, the market maker will start selling and driving the price as low as he can, and then he will start buying with size at much better prices.
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Well isn't this good? I mean those buy orders are very likely buy limit orders to buy only at a certain price level and below. If they don't drive the price lower, how are those buy orders going to be filled? For example, if the price of XYZ is at $58 and the large buy limit orders are all at $55, these limit orders won't get filled and the price is not going to drop by themselves. The only way that the price is going to drop from $58 to $55 is if there is massive selling at $58 and then at $57 and so on until the price drops to $55 and which indicates the sellers are willing to sell XYZ at $55 now that's when the buy limit orders are going to be filled at $55.

And the same thing hapen for sell orders. This is what I think how it happens as I have seen this a lot in my trading that the price gets moved just to take out my order and then the price goes right back up or down. Yes I can understand if you are looking to short or stop-loss on an existing buy order then yeah you will be pissed that the price gets moved down not allowing you to sell at the price you want but that's how the MM work. They move orders and at the same time make a profit. They are NOT a charity. They ARE profit-seeking as that's their primary goal in being the market maker in the first place.

My problem is not with them moving prices to work the orders but their lack of transparency and their unfair advantage of being able to know our positions via PFOF. Trading is a very competitive business that anchors on information; whoever has better and more information wins. It's fine that we "do battles" against the MM with them trading against them but it's not fine that they have more information about us than us about them setting us up to fail before we even started. It's like we are competing in a race and MM is allowed to start first.
 
TheDawn said:
My problem is not with them moving prices to work the orders but their lack of transparency and their unfair advantage of being able to know our positions via PFOF.
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Look at it this way. The MM has to provide liquidity and needs to be compensated for risking capital, so it’s all good, it is what it is.

MMs commit most of their capital and make the most profit on big caps during the first hour, and because they’re creatures of habit, and in addition the institutions are always very aware of their VWAP, so when you combine these things plus how the media hypes the news and how the retail order flow overreacts to it, then you can start building strategies around their behaviour and align yourself with them instead of fighting them.

Thanks to the MMs, the first hour contra-moves are very profitable.
 
ETJ said:
An MM or any exchange member would need to be employed by a BD. No compliance officer would also them to post up on YT. These are bullshit.
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Think that is in the past. Its not a lifetime requirement is it? :wtf:
 
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