Many traders believe that market makers will “signal” moves in advance buy using small amounts of buys or sells as “signals”. The “signals” are from one market maker to another to communicate their intentions.
Having worked on trading floors with market makers, we can attest that this does happen. Here are the signs…
Many traders believe that Market-Makers (MMs) will “signal” moves in advance buy using small amounts of buys or sells as “signals”. The “signals” are from one MM to another.
This is a theory put forth by a lot of penny stock and non-penny stock traders. This is not a guaranteed trading method but can lend some insight to communications. It can pay to watch a few MMs of your favorite stock over several days or weeks to see if they follow these or other similar signals. That way, you can divine what they are going to do and jump in ahead of any move that may come.