Follow The Money: Market Maker Model
The Market Maker Sell Model places importance on recognizing distribution phases, where market makers gradually offload their positions and distribute shares to other market participants. During this phase, price often exhibits a consolidation or a range-bound behavior, allowing market makers to sell their shares without causing significant price movements. As the distribution phase progresses, market makers strategically create a false breakout or a shakeout to trigger stop-loss orders from less informed traders. This shakeout serves as a tactic to induce selling pressure and create temporary price declines. Market makers capitalize on this opportunity to sell additional shares at favorable prices before initiating a substantial downward move. Once the shakeout is complete and market makers have successfully distributed their positions, they drive the price lower, creating a breakdown or a reversal pattern. This breakdown typically occurs with increased volume and momentum, indi...
