There's loads of information out there about investing, trading etc, but I'd not come across much on market making.
However a google search on exact phrase 'market maker' throws up lots of links.
This is from one:
Market maker firms like Merrill Lynch - MLCO, Soloman Smith Barney - SALB, Goldman Sachs - GSCO, Herzog - HRZG, Troster Singer - TSCO, and Nite Securities - NITE, just to name a few of the hundreds of active market markers, as mentioned earlier, are notorious at playing games. They perform "Head Fakes", Shake outs, Fading, and all in all, just cause general chaos when they choose to, which seems to be just about most of the time. Many traders and their trading accounts have succumb to the antics of these firms. As a day trader, keep one thing in mind. Day trading is war. It is a never ending battle against some of the biggest trading houses in the world.
I want to reiterate that market makers want your money, and will stop at nothing. The will do whatever it takes to influence you into making buy and sell decisions. Your number one best advantage is to learn and understand the movements of the market makers, so that at least you will have a basic fighting chance to maneuver your way through the never ending maze of volatility created by their actions.
Level II is purely suppy and demand based. You have buyers and sellers. The market maker's job is to simply fill customer's orders, and make profit for their firm. Once you learn and understand how market makers work, and how they think, your will have a greater opportunity to capitalize on their movements. One of the important things to remember is to try to think like a market maker. Then when you can do that, then you will understand a concept I refer to as "Painting" the market maker. To "paint" the market maker is to capitalize on his actions, or rather, do as the market maker does, by copying his actions. To do this, you must first learn and recognize his intentions.
Barry
