Market Intelligence

Market Liquidity & Institutional Order Flow

Liquidity is an important aspect in the market, especially for institutional investors, as they need lots of liquidity to enter or exit the market.

The smart money acts as a MARKET MAKER for the herd. In other words: The smart money is the counterpart of the overhang of long or short positions being held by the herd. If the herd is net short then the smart money is net long. If the herd is net long then the smart money is net short. This creates a conflict of interest between the smart money and the herd. And because of its overwhelming power, the smart money will always win!
This to explain how the smart money operate.

Therefore, institutional traders focus more on demand/supply metrics than to the traditional technical analysis tools and techniques.

Next to the support and resistance levels, it indicates all major liquidity levels and pools in the market. The liquidity on these price levels is cumulated by stop loss, breakout, break-even orders of especially retail traders. The longer a support or resistance level holds, the more liquidity is cumulated just above/under this price level. This is also why systematically all stop loss orders are hit.

All these levels are sooner or later hit by prices action as institutional investors will drive the price to where the liquidity is.
By doing this manipulation, new liquidity zones are created that will again be crossed afterwards.

Artificial intelligence

& Machine Learning algoritms

Where it is difficult or unfeasible to develop conventional algorithms to perform the needed tasks, machine learning algorithms are used in order to make predictions or decision, to find generalizable predictive patterns and for mathematical optimization.

Machine learning models and techniques are based on artificial neural networks, decision trees, support vector machines, regression analysis, dimesionaltiy reduction, classification, clustering, and Bayesian networks.

Greek Math

Delta, Gamma, Ultima, Vega, Theta, Rho... In mathematical finance, the Greeks are the quantities representing the sensitivity of the price of derivatives such as options to a change in underlying parameters on which the value of an instrument or portfolio of financial instruments is dependent. The Greeks are vital tools in risk management. Each Greek measures the sensitivity of the value of a portfolio to a small change in a given underlying parameter, so that component risks may be treated in isolation, and the portfolio rebalanced accordingly to achieve a desired exposure, for example delta hedging.