Market Maker Method - Rough overview of the concept coming priceRough overview and explanation of the development of markets with market makers (group of people and institutions which together control the market in a coordinated manner around the world).
(THIS REPRESENTATION IS NOT AN EXACT PRICE PROJECTION BUT IS ONLY FOR THE VISUALIZATION OF THE CONCEPT)
The MM (Market Makers) work in cycles, in this example the weekly cycle is shown. As visualized in the picture, the week begins with a level 3 breakout pattern, an M. Breakout patterns at level 3 are almost always an indication of the beginning of a reversal, as the market makers move the market in 3 levels. In the levels shown, a stop loss hunt then begins in order to gain the liquidity of the longs / shorts that exit there before they move on to the next level. We are currently in Level 1 Uptrend.
Important information:
- The MM are inactive on the weekend and let their bots carry out a stop loss hunt during this time, so it is not advisable to trade on weekends
- The price trend for the coming week is determined on Mondays, so the market there can also move 'unexpectedly' and very volatile
- The MM are mainly active on the 1h and 15min charts (15 minute chart for entries and 1h for trend confirmation)
- The MM act in 3 vector candles (unusually large candles)
- Vector candles are mostly signs that the MM want to build up shorts / longs at a higher price in order to bring the price back to these candles afterwards (slow trend = true trend)
- The beginning of MM Patterns can be detected if 3 vector candles can be spotted
- Use of EMA's for pattern confirmation: Breakout patterns upwards are usually below the 50day EMA and downwards above the 50day EMA. If the 200day EMA is also very close to the 50day EMA and the same behavior can be observed there, it is further confirmation of a breakout.
- Recognition of price targets based on the hourly chart: the price always normalizes to the 50day EMA! As soon as the price moves away from the 50day EMA the price target is the 200 or even 800day EMA. If the EMAs are all flat on top of each other, the next M-Level (indicator for breakpoints and support / resistance) is the projected price target before it normalizes again to the 50day EMA.
- All patterns are basically variations of M and W patterns, an inverse H&S is also basically just a modification of a W.
- If a breakout fails, it is a sign that the MM want to animate more shorts / longs before liquidating them. These breakout patterns then usually arise after this fall or become modifications of the previous pattern such as inverse H&S, so it is still a valid W formation.
- In a bull market, especially in crypto, it is not uncommon for a reversal to the upside to occur in the first or second level.
I hope this brings some light into the current market situation and helps people to be able to evaluate the market more calmly.
