How do MM's work?

I can't comment on how the MMs play around with the equities markets, as I don't trade individual stocks.

I trade the Dow Futures and, every day, there are short, sharp moves, against the trend, that seem designed to take out the day traders who are using tight stops. Two ways to protect against this are a) to widen your stop and/or b) use a longer time frame to trade from.
I'm sure that the same game is played with equities.

As an illustration of these false moves. Today, at approx 19.41 GMT, the Dow made a sudden move against the down trend, from 11,324 to 11,335. This move took about 5 mins., before the continuation of the trend took it down to 11,304, in less than 5 mins. This up move was enough to have taken out a lot of the stops. Having taken a lot of people out of the market, the big players then pushed the market up.

I've been caught like this many times in the past but, either I'm getting better at reading the bluffs, or I am getting luckier. I wish I knew, for certain, which one of these it was :confused:
 
Markets dont cheat they go up and down some one wins someone loses there are two sides of the coin. You are being paranoid if you think people are moving the market to hit stops , there will be a mix of stops and orders at these price when the market moves thats what the market does, get used to your environment, yes over people do want to take your money but they are not likly to move the whole market on ones own to get it.
 
Rereading the first post makes me laugh, "artifical volume" a order in the market is part of the days volume the buyer has exchanged with a seller this is signifcant even a 1 lot the same rule applys as a 10000 lot . You should read about greater fool theroy it may help,

There watching
 
Glad you had a good laugh and thanks for the advice.

To enlighten you, I've been in stocks and lost money just to record my observations of what I've seen regarding manipulation.

I've watched a tic chart flatline for minutes, and been in that stock. I've clicked on the 'Bid' and watched the price jump 30 cents in 1 second. I've waited 10 minutes as this stock flatlined again...average volume day 150,000 for this equity. After 10 minutes I clicked on the 'change order' button, and this stock jumped 50 cents immediately, all I did was cancel my order which was well below the market. This stock went up for 3 days and was technically overextended when I bought. It went up 3.5 points, I sold to see what would happen, and within an hour and a half the price collapsed 4 points in 20 minutes to within a half point of my short position. 4 points, 20 minutes, no news.
I tried to short again for the sake of research and got a message stateing 'unable to short'. I called the broker and he said there were 'no shares available' after calling margin dept. This was the first time I'd ever gotton a message labeled, "unable to short", normally I get a message on my trade platform 'no shorts available'. Explain what happened so we both know.
 
That was DXPE a few days back.
I know my posts sound dillusional. I've suspected, tested, and confirmed that at some point in the electronic chain there is a link which allows an mm to see some level of activity on a traders platform, be it nonspecific such as 'idle', 'active', but in some way similar to Level II. Maybe it's purely a non human analysis by mm's computers....but the reality is, it's real on my particular platform.
For sure I get reactions when I mess with my platforms BID / ASK buttons (without sending anything...just clicking on the current BID / ASK price which does load into a 'loaded and cocked, ready to send' order entry).
So, the obvious conclusion is.....that order entry is already sent......it just needs to be approved to be executed. So this is the dirty little secret of electronic trading, and the mm has the unfair advantage (must be illegal) prior to any execution whatsoever. Maybe it's just my brokers platform, but try it yourself, most clearly seen during slow periods...try several stocks if one doesnt work. If it doesnt work, it must be my brokers platform, cuz I realize how surrealistically crazy this sounds, but it suddenly made sense how I'd felt like 'I' was the one being traded, and not vis versa.
If it works for you, then the unfair advantage table has turned and the re-thinking of what has happened in past trades is a bit clearer. Sounds totally illegal and implies much much more.
I had no idea and never suspected such invasion of privacy. I had always thought what I did on 'my' platform was a discreet activity. I know it sounds crazy, or maybe this is something which some prefer to keep quiet since it explains a lot once a ticker is loaded into a watch list on a platform.
Previous posts 'laughed' at my artificial volume concept. Another site, EliteTrader, had a discontinued thread on computer mm's and the programming of such. One guy posting referenced a 1967 book which stated that 'they were just starting to use computers over at XYZ brokerage for trading. Well, we plan on getting a system which watches how their system is trading and figure out how we can beat their computer at it's own stratagy. If this is the thought process in 1967, you can bet that in 2006 brokerage / mm computers are climbing as far into a traders (ass) system to find out what we are doing, and my experience is it's up to the level of your watch list if you have point and click trading.
 
they are a major advertiser on tv / internet and I think they are based in Canada....I prefer to not be any more specific, but you know em.
 
cgoodwinca said:
Go ahead and ridicule me, but when you believe, you'll see what's happening.

Horseracing has it's way of cheating, Casinoes keep tabs on when certain undesireables enter a casino.

The MM's can see you, as a daytrader, enter a trade. At the very minimum the computer system keeps tabs on your position and can tweek the price during slow periods to put pressure on you. Do you think a computer cant figure out the best stratagy to screw with as many traders as are in a position for a short period? Most days are artificial volume and a game to put pressure on the most traders...computer age, dude, not wild wild west. It's not illegal to keep tabs on
daytraders positions by MM's. They can even build a database of your profile based upon trade platform identifiers so that MM computer algorythms can create a stratagy to f' with the most people based upon their average time in the market. We're talking about Las Vegas here. Casinoes are built upon statistics of how to screw people eventually, and daytrading is the same. You are handing yourself over to a computer system where the average days price movement is all about suckering people into artificial volume-price activity, and unless funds are buying and selling, thats what its all about.
Cheers.
Click to expand...


OMG, I have just read this crap. What utter drivel. . And let me guess, you think John Lennon was killed by the KGB, and Martians are going through your trash right now ? I was a MM for 17 years, and if you seriously believe what you've written, then you deserve to be parted from your money by your lack of understanding and knowledge of the markets.

CT
 
CityTrader said:
OMG, I have just read this crap. What utter drivel. . And let me guess, you think John Lennon was killed by the KGB, and Martians are going through your trash right now ? I was a MM for 17 years, and if you seriously believe what you've written, then you deserve to be parted from your money by your lack of understanding and knowledge of the markets.

CT
Click to expand...
I agree with your viewpoint. However, I think the quality of service differs in varying degrees between different Market Maker's. I have indeed had my own share of MM's, that don't live up to basic standards, on how one should operate on the market.
 
cgoodwinca said:
I tried to short again for the sake of research and got a message stateing 'unable to short'. I called the broker and he said there were 'no shares available' after calling margin dept. This was the first time I'd ever gotton a message labeled, "unable to short", normally I get a message on my trade platform 'no shorts available'. Explain what happened so we both know.
Click to expand...


dude, i think the fairies are definitely out to get you. id watch your back if i were you. either that or you couldnt short because you were out of dough (clue - thats why they called the margin dept!!). 'unable to short' is quite different from 'no shorts available'. next time you wish to do something 'just for the sake of research', id at least cover your bases like a professional and make sure your variables (like cash) wont hinder you from reaching correct conclusions.

perhaps it was the pixies playing games though?

did you know the pixies help the market makers programme the computers, and the bogeyman makes the secret database?

youre great value!!
 
....excellent posts by sandpiper....if you like witterings of a bungling buffoon.
 
Last edited:
You must log in or register to reply here.

Similar threads

J
CSI - Spreadbetting
Replies
12
Views
3K
jkplay
J
A
How SB firms manage their counter party risk? and few more questions
Replies
18
Views
4K
MORRIS2001
M
E
How do big players trade?
4 5 6
Replies
104
Views
20K
breadman
B
Grey1
GREY1's APPROACH TO TRADING US STOCKS
12 13 14
Replies
270
Views
201K
XOOKAZOID
X
ColinRiche
Level 2 and MM's
2
Replies
29
Views
1K
BBB
B
Top