The Market Maker Model You Were Never Taught

Summary

In this video, the speaker explores market maker models, explaining how they help understand price movement and identify market direction. These models, however, need to be paired with the speaker's blueprint model for enhanced clarity and accuracy in trading decisions. The video covers key concepts like liquidity hunting, accumulation, distribution, and mitigation blocks, while illustrating their application in various trading sessions (e.g., London and New York). By combining market maker models with the blueprint model, traders can increase their probability of success and better time their entries and exits in the market.

Takeaways

• 😀 Market maker models provide a comprehensive framework for understanding market price movements and can help predict whether the market will go up or down.
• 😀 Market makers are not evil figures; their primary job is to facilitate orders for large institutions and banks, keeping the market liquid.
• 😀 Market maker models include two stages of accumulation and three stages of distribution, used to identify key points for trading decisions.
• 😀 Fractal concepts are crucial: market maker models apply equally on both high and low time frames, with the same principles governing both.
• 😀 The 'breaker' is a key tool in market maker models, confirming when price is changing direction, such as from sell to buy or vice versa.
• 😀 Mitigation blocks are used to identify where market makers can square off positions or mitigate orders for profit, forming a critical aspect of market maker models.
• 😀 Both market maker buy and sell models rely on understanding key stages of accumulation and distribution to form low-risk entry points for trades.
• 😀 In the London and New York sessions, blending the blueprint model with market maker models can help traders predict liquidity hunts and the direction of price movements.
• 😀 Time-based liquidity hunts (like those at 3:00 a.m. for London or 9:30 a.m. for New York) are integral to the blueprint model, allowing traders to find high-probability entry points.
• 😀 Combining the blueprint model with market maker models leads to clearer trade signals, with specific focus on liquidity hunts and key breaker levels for confirmation of price direction.

Q & A

What is the role of market makers in trading?

Market makers play a crucial role in maintaining market liquidity by facilitating orders for large institutions and banks. They help provide a continuous flow of trades by absorbing buy and sell orders from retail traders and institutions.

How do Market Maker Models work?

Market Maker Models work by understanding how market makers mitigate orders in the market. They go through drawdowns and accumulate orders to facilitate larger transactions. The models work across different time frames, from shorter retail timeframes to longer institutional timeframes.

What are the stages of price movement according to Market Maker Models?

The price movement in Market Maker Models consists of two stages of accumulation (A, A2) and three stages of distribution. Accumulation involves market makers gathering liquidity, while distribution occurs as market makers square off positions, often followed by reversals triggered by mitigation blocks.

What is a breaker in the context of Market Maker Models?

A breaker is a key level that indicates a shift in price direction. When price breaks a certain level and then returns to it, it confirms that price is likely to move in the opposite direction, signaling a potential reversal or continuation in price action.

How do bullish and bearish breakers differ?

A bullish breaker occurs when price forms a higher low and then breaks through a key level, confirming a bullish reversal. A bearish breaker, on the other hand, forms when price creates a higher high, but then reverses, indicating a bearish move after trading back into the resistance level.

What role do mitigation blocks play in Market Maker Models?

Mitigation blocks are critical areas where market makers may need to fill unfilled orders. These blocks act as support or resistance levels where price often pauses or reverses as the market reacts to orders that were not executed during the previous phases.

What is the significance of the Silver Bullet stage in distribution?

The Silver Bullet stage is the second stage of distribution in the Market Maker Model. It is characterized by the least resistance, making it an ideal entry point for traders as the price moves in the direction of the market’s established trend.

How does the Blueprint Model enhance Market Maker Models?

The Blueprint Model enhances Market Maker Models by integrating time-based liquidity hunts, such as those occurring at specific times during the London (3:00 AM) and New York (9:30 AM) sessions. These time-specific strategies help traders predict market movements with higher accuracy.

What should traders look for during the 3:00 AM (London session) in the Blueprint Model?

During the 3:00 AM London session, traders should look for consolidation before this time, as it indicates where liquidity is resting. The price will then push higher, and if a change in delivery is confirmed, it suggests that the price will move lower after trading into a mitigation block.

How does the 9:30 AM (New York session) trading strategy work in the Blueprint Model?

In the 9:30 AM New York session, the price typically moves into key levels where liquidity is triggered. After a change in delivery is confirmed, traders should look for the first and second stages of distribution, which offer entry points for trades aligned with the market’s movement.