Wyckoff's Composite Man Concept, Part Four
In the above articles , we have mentioned many times that words such as “big man” or “big power”, such people are also called - composite man in the market.
This aspect is also important in trading; the concept of a composite person is one of the fundamental concepts of the Wyckoff method.
In fact, constituent people ( market makers ) are individuals with great influence in the market, these include banks, investment companies, lending institutions and other financial institutions.
Essentially, these are investors with large capital, which allows them to significantly influence the volume of demand or supply.
Such players try to manipulate the market, doing everything possible to buy shares cheap and sell them at a high price.
In practice, the “composite man” game looks like this:
First, the market maker begins to buy shares of the company, not in large volumes, so as not to attract the attention of other market participants and not cause a premature increase in price.
After a fairly large number of shares have been purchased, their sale begins, simultaneously creating bearish sentiment.
As a result, other holders of the security also begin to sell shares, excess supply sharply increases in the market, and this leads to a decrease in price.
As soon as the price of the selected share approaches the minimum, the market maker begins to buy the asset. After which the increase in demand and volumes of purchase transactions begin to push the price upward.
At the last stage of the operation, the constituent people sell the company's shares at the best possible price.
This is just one market management scenario that is often used by market makers.
If investors understand the game and begin to enter the market at the same moments as the market makers, the manipulative strategies of the compound man will bring them high profits.
By regularly studying the market and taking trades, investors can understand the motives of the compound man through the price action shown on the chart.
Investors will then have better trading opportunities than most other market participants.
Continuation, 5 steps to the market - https://time-forex.com/tehanaliz/wyckoff-5-shagov