The Secret Strategy: Trading Large Liquidations
45sReveals an insider trading strategy that promises high accuracy, sparking curiosity and desire to learn.
▶ Play ClipAI Summary
The video explains a crypto trading strategy based on large liquidation events. It describes how market makers are forced to buy liquidated positions at a discount and then move the price in their favor, creating predictable local reversals that traders can exploit.
Chapters
[00:00]
Trading from large liquidations
A highly accurate crypto trading strategy involves trading from large liquidation events. Each coin has a market maker providing liquidity in the order book, and traders mostly trade against the market maker, not each other.
[00:14]
Market maker's forced purchase
When traders are liquidated on sharp price moves, the exchange dumps all or part of these liquidations onto the market maker's balance at a discount (usually up to 1% below market price).
[00:27]
Market maker's need to sell higher
The market maker is forced to buy coins and needs to sell them at least a couple percent higher. Since they control the order book, they will naturally move the price in a direction that benefits them.
[00:40]
Local reversals after liquidations
After large liquidations, the price often reverses locally, allowing traders to open quality positions. Trading from liquidations is essentially trading alongside the market maker, who always trades profitably.
[00:54]
More info on channel
The creator mentions more useful information is available on their channel.
The strategy hinges on understanding that market makers are forced to buy liquidated positions at a discount and then manipulate price to sell at a profit, creating exploitable local reversals for traders.
Study Flashcards (4)
Who provides liquidity in the order book for a coin?
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Who provides liquidity in the order book for a coin?
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A market maker.
What happens to liquidated positions?
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What happens to liquidated positions?
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The exchange dumps them onto the market maker's balance at a discount (usually up to 1% below market price).
00:14
Why does the market maker move the price after a large liquidation?
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Why does the market maker move the price after a large liquidation?
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Because they need to sell the coins they bought at a discount for a profit, so they push the price up.
00:27
What is the typical discount on liquidations given to market makers?
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What is the typical discount on liquidations given to market makers?
easy
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Up to 1% below market price.
00:14
💡 Key Takeaways
💡
Market maker as counterparty
Clarifies that traders usually trade against market makers, not each other, which is a fundamental insight.
📊
Liquidation discount
Reveals the specific mechanism of how exchanges offload liquidations to market makers at a discount.
00:14
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Market maker's price manipulation
Explains why price reverses after large liquidations: market makers need to sell higher.
00:27Full Transcript
[00:00] Одна из самых точных торговых стратегий в криптовалютах – это торговля от крупных ликвидаций. Смотрите, у каждой монеты есть маркетмейкер, который поставляет нам, трейдерам, ликвидность в биржевой стакан. Большую часть времени мы торгуем не друг с другом, а с маркетмейкером.
[00:14] Именно ему мы продаем свои монеты и у него покупаем. Когда трейдеров ликвидируют на резком движении цены, биржа сгружает на баланс маркетмейкеров либо все, либо часть этих ликвидаций со скидкой от рыночной цены обычно до 1%.
[00:27] То есть по факту маркетмейкер вынужденно выкупает монеты, и теперь ему нужно продать их хотя бы на пару процентов дороже. А так как он контролирует стакан, он естественно будет двигать цену туда, куда ему это будет выгодно.
[00:40] Именно поэтому очень часто после крупных ликвидаций, как вы видите на графике, цена локально разворачивается, и мы можем качественно открывать позиции. По факту торговля от ликвидации — это торговля вместе с маркетмейкером, а он всегда торгует в плюс.
[00:54] А еще больше полезной информации у меня на канале. Заходи.
