How can you identify the role of market makers and institutional players in market movements?

The most successful and applicable way to trade with acknowledgement to the market makers are through finding the highest walls of open interest on the chain in my experience. In their best interest, they are not incentivized to pay out at the highest level. Taking the price of the option contract multiplied by the open interest will show the money on the line for each strike level. For those with high OI and imbalanced to the opposite side of the chain, it creates a wall that the market isn't expected to break on the bias the market makers will not allow it. A put wall acts as a support and a call wall acts as a resistance and with combined walls we can suggest the expected change for the security within a specific expiration aswell.

Exchanges have market surveillance algorithms to detect market abuse whether it is done by a marketmaker or other trading participant. A Marketmaker's edge is generally low latency. They have an expensive infrastructure to receive and act on market data in microseconds or even nanoseconds. To be able to act on signals like that, you too would need a low latency infrastructure

In my opinion, in order to maintain and balance the capital market, there should always be institutions with more power and capital to manage the direction of the market. But unfortunately, in the last few years, these directions are only for the benefit of the market goats. Because they use the market for their own interests so that the result changes in their favor. They are even ready to do this at the cost of starting a war

Market makers are the major participants in the market. Since they are the big guys, retailers suffer loss if not seeing from the MM's perspective each day.Through manipulations at higher levels of trading to emotional rollercoaster. The significance of MMs can not be over stretched in this context, they are all about the movement and basis of many price researches in the market till date.

Post HFT, COLO, QUANTS and algo role of market makers have changed dramatically. From being entities that provide liquidity to the system - these have evolved as institutions that violate the rules with acceptable, unacceptable tolerance levels. Making spot to futures swing from big premium to deep discount. Making future synthetic options to go from deep discount to high premium thus killing writers with premium and buyers with deep discount. Every week these market makers pocket a few thousand chores in the manipulation. And like in the terminator movie these entities have a bad robo, algo that violate the rules to hit the robo, algos that are designed to follow rules, especially option greeks.

Volume plays a crucial role in understanding market makers' moves. If I tell you that look for 5 red candles post a doji, that would be me telling you something based on ONE instance. Here's where you can go extra level to look for those players' tactics: After a huge upswing/downswing, how soon does it take for the stock to move in that same direction? More often than not, bull rallies will be sold into by smaller volumes that are hidden. Which can be a false positive unless more volumes are added. It's the opposite for crashes. The baseline is: market makers who you think are smarter, are just people trying to survive in any market condition. If you have the same goal, you will lose less and probably make more than you usually do

People say "Bhav Bhagwan che" Meaning price is God. I would put it this way - if Price is God then Volume is the Swaroopa " Character, intention of the God" If Price is a number then with Volume it becomes value, profit or loss ? Think

It's true, market makers use trading volume to change the trend and other purposes. The indicators that are broken always have a delay in the announcement and few people have access to the real volume of transactions. But these tools help to predict the possible trend

The volume is like the unknown essence for many traders as it owns the key critical part many traders are always waiting for. If we talk about liquidity, it is volume that is not seen but expecting to see its impact. At the end if retailers have an indicator that shows real time volume in the market then almost every trader will make million bucks $$ a day. However, the volume indicators seen and known are not holy grail still. In conclusion, volume is a great insight for the MMs.

Order flow analysis has gained prominence in recent years as technology has improved the granularity and accessibility of trading data. It's not limited to traditional financial markets like stocks and commodities but has also found applications in cryptocurrency markets. With high-frequency and algorithmic trading playing a significant role in modern financial markets, order flow analysis is a valuable tool for understanding market dynamics and predicting short-term price movements. It allows traders to access real-time order flow data, enabling them to react swiftly to changing market conditions and capitalize on fleeting opportunities.

The MMs are regarded with the schematics in the orderflow created in the market, as the that shows little of their intention before or after manipulation. Institutional orderflow (Iof) will help to identify trendy rally, impulsive moves at the same time the earliest reversal time in the market through series of different price representation, e.g Change of Character or Shift in Market Structure, stophunt that is common today and so on. If this paradigm is understood, long and short market opportunities would be easier to spot in spot, crypto, stocks and commodities trading.

In my opinion, it is better to know the behavior of the market, they give us the least time error. But only analysis on candles can't help you, news, knowing the correct areas of resistance and support in different time frames, etc. together can give you a correct strategy.

While many like to rely on indicators that use volume in their calculation, I would rather look at volume as it relates to the price structure. For example, when looking for large liquidations, I would be looking for not only instant buying or selling in response, but also a large increase in volume while the candle size starts to decrease. To me, the structure along with volume as a confirmation gives me much more conviction than just relying on a smooth indicator or volume line.

Candlesticks are one of the graphical representation of price movement on the market chart. Candlestick has its history rooted back to the 18-century in Japan. Hence, Japanese candlesticks. Useful in technical analysis for different patterns; continuation or reversal. The interpretation of different candles at area of value will determine what a trader will do in the market. They are highly useful in technical analysis. Platforms like MT4/5 will allow you to select your desired colour for the bullish and bearish candles representing buy and sell movement in the market.

Japanese Candlesticks provide an excellent piece of the Technical Analysis puzzle. Each candle gives you the opening price, the low of the period, the high of the period and the closing price. Because markets are fractal (they display similar properties in all time frames) the "period" of an individual candle may be daily, weekly, monthly and so on. Or with real-time data feeds you can use one, five or ten-minute or hourly candles, etc. What period you choose depends on the time frame you want to trade. Candlesticks can give you the answer to the most important question in trading (who control the market?)

Candlestick analysis, rooted in 18th-century Japanese rice trading, has gained widespread recognition among traders worldwide. It offers a visual language to interpret price movements, making it accessible even to those not well-versed in complex financial terminology. These patterns have proven their reliability over time, and they often repeat across various markets. For example, a bullish engulfing pattern in the forex market can signal the same strength as a similar pattern in the stock market. Traders also incorporate candlestick patterns into automated trading systems, utilizing algorithms to spot and act on these signals in real time, adding another layer to their effectiveness.

Market Profile is like a special chart that helps traders see how prices go up and down in the market. It shows how many trades happen at different prices. This helps traders understand what most people are doing, which is important for making good decisions. Market Profile is useful for both short-term and long-term trading. It changes as the market changes, so traders always have the latest information. There are two main types of trades based on the Market Profile: Proactive: a break of the previous balance area in search for a new fair price; Responsive: a return to the fair price area from unreasonably low or high prices.

Market profile is a graphical price representation that covers a period of time on the chart. This is one of the uncommon way of analysis that large percentage of technical trader do not consider powerful in analysis. I personally love running a 3 months market profile, quarterly profile for the year and that helps to see the price distribution. To see rejection zones, Areas of value and point of control. This makes it easier to compliment my technical analysis in more awesome ways, and it is truly profitable.

I agree that the Put/Call Ratio and the Volatility Index (VIX) help with sentiment analysis. However, for effective trading, it's important to know when to enter and exit trades by understanding sentiment strength and possible trend changes. I find the following indicators helpful for trading: 1. Keltner Channel for assessing overall momentum. 2. Stochastic and CCI for identifying overbought and oversold conditions, as well as reversal signals.

When I think of sentiment analysis, I don’t necessarily connect it to the role of market makers and institutional players, but rather the more crowd sentiment towards the market, which, as we know, in the past have been large indicators of where the market may move next. The VIX for example, is a large contrary indicator, which we see as the fear gauge measuring the market volatility and overall investor sentiment. A spike in VIX may suggest an impending market decline, and a low level of volatility could indicate a more positive future market sentiment. On my VIX charts I have 14-16 marked as a low volatility, level 16-21 normal and above 25 as panic.

Interesting fact from backtesting: the correlation between the daily changes in the S&P 500 and the VIX is -77 and over the past 10 years the correlation has become stronger at -81%. The rise in VIX during bearish market conditions can be attributed to the overall bullish bias of the stock market. The VIX measures the market's expectation of the 30 day move of the S&P 500 volatility, using the options as the underlying. This number is annualized so what I’ve done in the past is take the VIX divided by the square root of the timeframe I’m using for example, one month would be divided by 12 and using this we can find the expected range for that period of time using the VIX.

David vs Goliath story from the Bible Everyday once the market opens look at the Volume of similar priced option strikes.. Say for banknifty today 25 Oct 2023 morning 930 42500 ce and 44000 pe were similar priced. 42500 ce had a Volume of 2 lakhs whereas 44000 pe had a Volume of 75000 . 42500 ce is golliath and 44000 pe is David in terms of Volume. Initially market went up David got hurt thrice and then final laugh was of David from around 550 odd made 1300.. This happens most of the days David has nothing to lose Goliath thinks David is too small to hit and for David - Goliath is too big to miss ! Think

Careful analysis of these trading behaviors empowers market participants with valuable insights into the underlying supply and demand dynamics, aiding in making well-informed trading decisions amidst the complexities of financial markets.