Understanding the Other Side of Your Trades: Market Makers

1. Who’s on the Other Side?

Many traders mistakenly think they’re competing against other individuals, but in reality, it’s usually market makers. These professionals ensure market liquidity and are hired by projects to help distribute tokens to the public.

Market makers have substantial resources, expertise, and strategy, which often makes them formidable opponents in the trading arena.

2. Why Do Market Makers Matter?

Market makers, like Sigma Chain (recently involved in the SEC lawsuit against Binance), are often controlled by the same entities behind major exchanges.

Trading against a well-funded and organized market maker is akin to gambling—you’re not competing on equal footing.

3. Key Strategies to Succeed in Trading:

Control Risk & Focus on Stability:

Trading success requires a realistic approach. Prioritize consistent, long-term growth over quick gains. Manage risk to avoid major losses, aiming for steady profits over time.

Focus on Technical Analysis:

For short-term trading, technical analysis is more important than fundamentals. Market movements over hours or days are influenced by market makers and intraday traders, making technical indicators essential for navigating price action.

Think in Probabilities, Not Predictions:

No one can predict the market with certainty. Instead, focus on probable outcomes and plan for different scenarios. This mindset helps improve decision-making and risk management.

4. Final Thoughts:

Trading requires a well-thought-out plan, discipline, and respect for the market. It’s a long-term endeavor that demands patience and strategy.

Even with market makers exerting influence, traders can still find an edge by staying prepared and having a clear strategy. Persistence, smart decision-making, and focusing on long-term growth are key to success.

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