How to follow the market makers and exploit retail traders

Education

Bitcoin (BITFINEX:BTCUSD)

Updated

BITFINEX:BTCUSD Bitcoin

beyondta

“I believe that the public wants to be led, to be instructed, to be told what to do. They want reassurance. They will always move en masse, a mob, a herd, a group, because people want the safety of human company. They are afraid to stand alone.” -- Jesse Livermore

“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful” ― Warren Buffett

Maybe, you should reconsider your trading philosophy if you think that the market may be a charming place. Why? You need a lot of hours to figure it out. I will link the related materials in the end of idea.

The logic behind how market makers make money is very simple. They just take advantage of dumb retail traders that buy/sell in panic providing liquidity to whales and then, the market will reverse in opposite direction of retails expectation. Your goal as a smart trader is to follow whales and exploit others to the maximum. If a retail trader loose his all savings while trading - you shouldn't care. He is dumb!!! He deserved it.

How to figure out when whales want to screw retails to the maximum? ----- Sentiment is everything.
While analysing sentiment - look only at extremes.

Tools:

1. F&G Index. No need for explanation. Compare this index to the BTC chart and see how it works.

2. Coindesk and CNBC. Those are puppets of large institution. If you see "Bitcoin is Dead" or "Bitcoin is alive" - prepare to take the opposite trade.

3. Social Sentiment

4. Bitcoin margin trading sentiment.

5. BTC COT report. See what whales and retails hold.

6. BFXL100 ( tradingview indicator) Look at bitfinex longs/shorts margin position. You will pretty accurate result here.

7. Tradingview dumb gurus. Just find dozes of gurus that love to print ideas everyday-everynigh. Find when they gravitate toward one direction and then you know how trade. They are usually right at the major trends but wrong at the both ends.

If you want to learn more about sentiment - go here.
It is free but cost more then all those dumb gurus worth altogether.

Want to know how any financial market works?

Finally, short the dumb money, go long on yourself.

Comment:

Disclaimer

The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.