If you heard about aggressive market participants, and passive market participants, then Moby Wick, is a passive market participant, that places big limit orders in the market. I sure you heard about whales of institutional trading. Because it places big limit orders, Moby Wick, will never be able to fill a complete order at one single price level, and it will ever be able to fill the complete order in one single order. So being a big player, is not necessarily easy.
And so, because of the two mentioned above, Moby Wick will leave clues, or marks in the market, that we as small fishes in the see, we need to swim along Moby Wick, and take advantages of those clues that it leaves behind. Why we need to follow Moby Wick? Because big orders are pulling the market in their direction, and nothing makes more sense, especially in crypto, then to follow big orders, or Moby Wick.
HOW CAN YOU SPOT MOBY WICK?
First you need to understand, that even though, Moby Wick is swimming in a big sea, now is approx. 1 trillion USD, and if you get down to Bitcoin, the largest part of the sea, it is around 450 billion USD. Now even though you see this 450 billion USD market cap, as a trader, you actually need to pay attention to traded volume, which is much lower. At the time writing, the traded volume 26 billion USD. This traded volume, which means that includes selling or buying to any other altcoin or fiat currency, it did not happen all at a single price level, in one single trade, but in thousands of trades at every price level from the daily range, obvious wright? So how can you spot Moby Wick? As I said earlier, it leaves market clues, because it is forced to do so. Why? 1. There is not enough liquidity at a single price level, so Moby Wick don’t want to risk paying the slippage, or having the completed order filled at bad prices. Because of this, Moby Dick, needs to fill the order in more than one try.
2. Most of the trades are limit orders, but if Moby Wick places a large BUY order for example, then that order will be visible in the order book, and everyone will buy, buy buy…so who is going to sell to them after? This why, it is going to place multiple limit trades at same level. After the initial limit order was filled, the price will reject and then come back for more. I will show you in the following graphic what I mean.
You can see how many times the price came back to the same level, rejecting aggressively.
Why the price will return to that level? Because Moby Wick is refilling, or adding more to its position.
Why the price rejects aggressively creating candles with wicks? Because all the SELL orders will be hitting the BUY wall set by Moby Wick, and those orders will be filled quickly.
Another explanation on how to spot Moby Wick, or whales. 1. Search for doji, evening star, morning star, or shooting star candles. ( big wicks candles ) 2. Make sure they are forming in the trend direction / continuation, after a small retracement. 3. Check if the price will reject aggressively a second time from the same level.