Wyckoff's Composite Man Concept, Part Four
In the above articles , we have mentioned many times that words like "big man" or "big power" are also called - a 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, market makers are individuals who have great influence on the market, and these include banks, investment companies, credit institutions and other financial organizations.
Essentially, these are investors with large capital, which allows them to significantly influence the volume of supply or demand.
Such players try to manipulate the market, doing everything possible to buy shares cheaply and sell them at a high price.
In practice, the game of "composite man" looks like this:
First, the market maker begins buying up the company's shares, but in small quantities so as not to attract the attention of other market participants and cause a premature price increase.
Once 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, the excess supply on the market increases sharply, and this leads to a decrease in the price.
As soon as the price of a selected stock approaches its minimum, the market maker begins buying the asset. After this, rising demand and volumes of buy transactions begin to push the price upward.
At the final stage of the operation, the constituent people sell the company's shares at the most favorable price.
This is just one of the market management scenarios that is often used by market makers.
If investors understand the game and start entering the market at the same moments as market makers, the composite man's manipulative strategies will bring them high profits.
By regularly studying the market and entering trades, investors can understand the motives of the composite man through the price action shown on the chart.
After this, investors will have better trading opportunities than most other market participants.
Continue reading: 5 Steps to the Market - https://time-forex.com/tehanaliz/wyckoff-5-shagov
