Many market makers, banks, and hedge funds- mainly big players with deep pockets-are known to fade breakouts, which are traded by the retail traders and ourselves.
Their game plan is to make money from the majority of the crowd who thinks that the price will rally merrily after an upside breakout or decline dangerously after a downside break, Since market makers are the pricing counter parties to their retail customers, they have to take the opposite end of the trade, whether you like it or not.
Let's see things from their point of view. For example, if there is an expected crowd demand to buy at a certain price above a resistance level, these firms know that they will have to sell to their customers, so how will they position themselves in an advantageous position? What they routinely do is that they reach into their pockets, spend a bit of money buying up the currency pair to the level where entry stop orders have been placed by their customers, so that they can now sell to those people who are desperate to buy, thus making some decent profits from this trick.
The next stage of the trick comes when customers stop orders are triggered and the retail crowd goes long. This gives the market makers and other BIG PLAYERS a chance to close the previous longs that they entered by selling to the crowd.
Our system predicts these moves by the market makers and so we are able to follow these institutions, making money for our customers by using high probability low risk trades.
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