Unraveling the secrets of the market makers’ game in the capital market
Have you ever wondered who is really manipulating stock prices behind the scenes?
Well, this time we are revealing one of the biggest secrets of the capital market. How these big players secretly accumulate stocks, long before the rest of us even notice.
Have you ever seen a stock suddenly rise, only to think: “Oh no, I’m too late again”?
Don’t worry, the feeling of missing the boat is normal and happens often. Ironically, just when we, private investors, finally have the confidence to buy, that is often the moment when the big players are getting ready to sell.
The preparations for the price rise itself take place far behind the scenes, in complete silence. To understand this secret game, we need to get to know the players.
The market makers in financial institutions
Who are these people we call market makers? So, who is a ‘market maker’? Forget the image of a mysterious figure in a dark room. “Bandar” is a term for any party with enormous sums of money, whether it is a financial institution, a large investment fund, or a market maker—essentially anyone with enough capital to influence the market.
Think of it this way: their main weapon is accumulation. Imagine an art collector secretly buying paintings by an unknown artist.
They buy them slowly, one by one, so that no one notices and the price does not rise quickly. The goal, of course, is to acquire the artwork at a low price before everyone gets excited.
But why slowly? Why not just buy everything at once? Show them the difference. If they buy a lot, demand will rise immediately and the price will instantly skyrocket.
That is like shouting in the market: “Hey, I want to buy everything!”, which ultimately leads to them buying at a high price.
If they buy slowly, the price remains stable and their activities remain secret. If they buy slowly, the price remains stable and their activities remain secret. What tricks do they use to buy large quantities without being detected?
The first technique is camouflage. They use split orders. A large order, for example 1 million lots, is split into thousands of smaller transactions so that it looks like a regular retail transaction.
Then there are iceberg orders, where only the tip of the iceberg is visible on the surface—a small order—while a gigantic order is waiting in the queue underneath.
And the more sophisticated brokers spread their purchases across multiple brokers, like secret agents using multiple identities, to make their tracks difficult to follow. What is visible on the surface is only the tip of the iceberg—a small order—while a gigantic order is waiting in the queue underneath.
Furthermore, they are skilled at controlling the battlefield. They build layers, stacking thick buying queues one on top of the other to create a base that prevents the price from dropping.
They (the Badar) intentionally keep the price movement flat. Buying slightly lower, selling slightly higher, making the market look dull.
The goal is to avoid suspicion, while they quietly continue buying goods on terms for days.
The question now is: how can we turn the tide and learn to read the trails they leave behind? What kind of trails do they leave behind?
There are five key indicators that we can see at a glance. First, trading volume suddenly increases dramatically, while the price remains unchanged. Second, a sideways price movement looks dull.
Third, the buy queue on the trading platform is very thick, like a wall holding it back. Fourth, broker data shows a large and consistent net purchase over several days. And fifth, the price seems to have a hold that is difficult to break through.
It is important to remember that all of this is part of a larger market cycle.
Phase one: Accumulation. This is when the big players buy quietly; Phase two: Price increases, and prices start to rise; Phase three: Distribution, in which they sell to an euphoric audience. Then phase four follows: the decline, and prices fall.
Our mission as smart traders is therefore to find stocks in this first phase. Let’s try to play market detectives and see how we can uncover this pattern in practice.
Think of it as detective work. The first step is looking for stocks whose charts look dormant, or flat.
The second step is checking the volume and the number of transactions. Are there more transactions than usual? The third step is looking at the broker’s summary data to see if large quantities are being bought.
And most importantly: the fourth step is ensuring that the pattern is consistent. ***tok
