Trading Concepts Compendium (Part 4): How to Analyze Taker and Maker Buy and Sell Orders, and Follow Market Maker Capital Into the Market?

The trading concept supplement series aims to share some "rarely mentioned, but extremely important" trading concepts, I believe that both novices and veterans can take something away in this series of articles. This is the fourth article in this series of 10 articles. (Summary: Trading Concept Supplement (3): The direction of the minimum resistance in the market) (Background supplement: Take Bitcoin's double top structure in 2021 as an example: talk about what is a "future data leak") Why do we analyze the strength of Taker? "Without Huigen, you have to follow" In crypto, especially the contract market, it is a zero-sum game. In other words, your gains come from someone else's losses; The reverse is still true. Your opponents often include crocodiles who have been hunting on Wall Street for decades, why do you think you can earn them? At least I admit that I am not capable, in this case, if we focus the entry point of the strategy on "following the main funds", the win rate is often much higher than if we operate blindly. In the first two articles of this series, I analyzed in detail the principles of order and price movement in Maker and Taker, if you haven't read it yet, I recommend that you read it first to understand the rest of this article more fully. Advanced analysis method of the principle of volume and price The so-called trading volume refers to the amount "after the two parties of buying and selling match each other"; In other words, behind each trading volume, it must represent "the same amount of buying and selling". The "explosive volume, huge amount" we often hear refers to the fact that a large number of buy and sell orders are matched, and a large number of funds enter the confrontation here. But have you ever thought about the "composition of volume"? Huge volume, may represent two situations, take plunge + huge volume as an example: 1⃣ A large number of Taker sell smashing + Maker buy taking over 2⃣ a large number of Taker sell smashing + Taker buy Brainstorming time is up: what is the difference between the above? Situation 1⃣: If Taker sell is very strong, Maker buy will only be constantly broken down, The final statement on the K line is "a large proportion of entities fall negative K" situation 2⃣: If Taker sell is very strong, but at the same time Taker buy is also involved in the engagement, Under the pull of the two sides, the final K-line statement "the proportion of entities may be small" Core focus: the same is huge, the meaning of the representation can be completely different Therefore, in the event of a huge amount, If you can distinguish the above two situations, you can more clearly grasp the intention of the main funds. After all, only Taker is the "driving force behind the price", and if there is only maker buy + maker sell in the market, money cannot be exchanged. (For details, see: Trading Concept Supplement (2): Taker, Maker, the principle of price movement) Real case analysis: how to judge the strength of Taker by volume If you can understand what I described above, I will introduce two real cases so that you can more directly understand "how to judge Taker by volume". As shown in the picture above, I marked a 1hr "K-rod with huge drop + closing needle". Some people may interpret it like this: Volume = the same amount of buying and selling, so there are many people buying here The price has closed the needle, indicating that the buying force is very strong According to the above, it is judged to be a bullish signal But God's perspective tells you that the follow-up still continues to fall, why? Then look down: let's switch the same chart to a 1 min candlestick chart. It can be seen that although you see "a single huge K line" on the 1hr chart, cut to 1 min K, you can clearly find that the source of the huge amount almost all comes from the plunge in a few minutes The falling K line in those few minutes is almost all "the proportion of entities is large" You can pause and think about what it means to "a 1 min K": "huge + large proportion of entities"? Undoubtedly, it is definitely a huge amount of Taker sell, and if there is a Taker buy to compete during the period, it will not make the entity account for such a large proportion. Therefore, although you can see "huge" + "needle close" on the 1hr chart, it can be clearly seen after cutting to the 1min chart: "This is simply a unilateral slaughter of taker sell, only maker buy takes over". According to this, we basically do not see taker buy out of the protective plate on the candlestick chart. Since there is no "main fund" to intervene in the protective market, why should we enter the market to go long? Let's look at another example: the above figure is a 1min K chart for another timeframe, also at 1hr K when a huge amount appears. As can be seen from the 1min K chart: a large number of taker sell smashes appeared in the front of the decline (red mark area) A huge taker buy appeared in the back (yellow mark area) Why is taker buy involved? Similarly, the yellow mark is a "1min K increase in the proportion of entities", and the corresponding trading volume is also "huge", compared with the first case, there is obviously a main fund (taker buy) involved. Therefore, compared to the first case, this case is obviously more qualified to go long. Summary The whole process of this article is a little too hardcore, and basically no one on the Internet is teaching the judgment of taker, so it is completely normal if you feel strange. There are still many angles to talk about the analysis methods of taker, maker, and volume, and today's sharing is just one of them. The above is the content of the trading concept supplement (4), I hope it will be helpful to you, thank you for reading so far. Original link: Related reports Interpretation of the Web3 AI track 6 status quo: Compared with AI agents, institutions pay more attention to infrastructure AI Agent integration Web3, robots help you chain financial management era is coming? Mind Network Full Introduction: Using FHE Technology to Solve AI Agent Security Problems (Trading Concept Supplement (4): How to analyze Taker, Maker buy and sell orders, and follow the main funds to enter the market? This article was first published in BlockTempo's "Dynamic Trend - The Most Influential Blockchain News Media".