Beat The Market Maker (BTMM)

Strategy – A Complete Guide

 7 mins read ●
 Last Updated: 2 October 2024

Written byOyekanmi Jose Reviewed byShain Vernier

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KEY POINTS
 The BTMM strategy is aimed at understanding and exploiting market maker behaviors in
Forex trading, recognizing the influence these large institutions have on market prices.
 It emphasizes recognizing a three-day cycle in market maker activities, identifying distinct
phases of market maker manipulation, and aligning trading strategies with these phases for
effectiveness.
 The strategy also employs various indicators like candlestick patterns, EMAs, and pivot points
to analyze and predict market movements, providing a structured approach to trading.
Smart money concepts have gained widespread attention in recent years, but just
some years ago, those who popularized it were labeled weird. One of those was
Steve Mauro, who founded the Beat the Market Maker (BTMM) strategy.
Shortly after training his first set of students, the profitability of his unique trading
strategy began to speak for itself. Today, the BTMM strategy stands as one of the
most reliable trading strategies, and this article will give a full explanation of what
this strategy is all about.

Table of Contents
 What is the BTMM Strategy?
 How Does the Beat The Market Maker (BTMM) Strategy Work?
 Top BTMM Technical Analysis Tools and Indicators
 BTMM Strategy PDF Free Download
 Is the BTMM Strategy a Profitable Strategy?
 Frequently Asked Questions About the BTMM Strategy

What is the BTMM Strategy?

Founded by Steve Mauro, the Beat The Market Maker strategy, as its name
suggests, focuses on understanding and exploiting the actions of market makers.
The story behind this strategy is deeply rooted in Mauro’s trading success. At some
point in his career, Steve Mauro suddenly realized that markets mostly move in a
certain direction based on the actions of market makers. A market maker, typically
a large financial institution like a bank, functions as an intermediary in trading,
influencing market prices through their substantial trading volume.
They usually have a huge impact on price movements and the dynamic in the
market. As such, the BTMM is a classic “follow the money” strategy. Its idea relies
on identifying market scenarios when market makers manipulate price action.

Much like the Smart Money Concept trading strategy, the BTMM strategy revolves
around recognizing patterns and strategies used by market makers to find profitable
trades. These entities use various tactics to manipulate price movements, such
as inducing traders to take positions and then reversing the market direction
to profit from these moves. The market makers’ primary tools include the ability
to buy or sell currency in different volumes at varying prices, playing on the
emotional responses of retail traders.
Interestingly, the BTMM strategy includes recognizing reversal patterns, which
are considered vital for successful trading. Whether these patterns are artificially
created by market makers or are natural market occurrences is a matter of debate.
However, traders using the BTMM strategy focus on identifying and leveraging
these patterns rather than getting caught in the market makers’ traps.

How Does the BTMM Strategy Work?

As mentioned, the Beat The Market Maker (BTMM) strategy operates on the
premise of understanding and capitalizing on the activities of market makers
(MMs). These market makers, often large financial institutions, have significant
influence in the markets. They use their buying and selling power to create price
movements, which can trap or mislead retail traders.
One of the key aspects of the BTMM strategy is the understanding of the three-
day cycle, a pattern often observed in market maker behavior. This cycle starts
with the market maker-driven phase, characterized by fast moves (Level I),
followed by a phase driven by retail traders’ emotions in the absence of market
maker support (Level II), and finally, a return of market makers to the market for
profit-taking and further movement in the direction of the technical trend (Level
III). Each level of this cycle has distinct behavioral patterns and is essential for a
trader to recognize for successful application of the BTMM strategy.
BTMM traders often use intervals of days to identify a three-day cycle pattern, as
shown in the chart below.

The BTMM strategy entails identifying these cycles and patterns, understanding
market makers’ influence, and using this insight to make profitable trading
decisions. It’s about aligning with the powerful moves of market makers rather than
being caught in common market maker traps.
Overall, that’s the basic idea of the BTMM strategy. It relies on the notion that
market makers are those who dominate the markets, and as such, understanding
their actions is the key to success in trading.

BTMM Technical Analysis Tools and

Indicators
The Beat The Market Maker (BTMM) strategy uses various indicators to analyze
market behaviors and predict movements. Here are some of those:

1. Candlestick Patterns
These are the primary tools for BTMM, where particular shapes and formations of
candles indicate potential market movements. Key chart patterns include Spike
Candles, Spinning Tops, Hammers, Inverted Hammers, Doji Candles, Evening Star
and Morning Star Formations, and Railroad Tracks (RRT). Each pattern has its
significance, often indicating trend reversals or continuations.

2. Exponential Moving Averages (EMAs)

EMAs like 5, 13, 50, and 200 are used for identifying trends, momentums, and
potential reversal points. They provide a dynamic view of support and resistance
and are essential for interpreting market direction. For example, a crossover of the
5 and 13 EMAs can indicate a signal for entry or exit.

3. Colour-Coded Sessions
This involves marking out specific trading sessions, like the Asian or New York
sessions, to identify periods of high trading activity or potential reversals. BTMM
traders often use these key levels since they anticipate market makers may place
large around these price levels.

4. Previous Highs/Lows of the Day (HOD/LOD)

Similarly to the color-coded sessions technique, this indicator is used to mark the
previous day’s high and low points, which often act as significant levels of support
and resistance.
5. Pivot Points
These are used to identify potential turning points in the market based on previous
days’ highs, lows, and closing prices. They provide a grid-like structure to assess
where the market might move, and therefore, the Pivot Point strategy is a vital part
of the BTMM technique.

6. Average Daily Range (ADR)

The Average Daily Range indicator is another excellent indicator for the BTMM
strategy. It measures the average market volatility and provides high and low
estimates that can be crucial for setting up trades.

7. TDI (Traders Dynamic Index)

The Traders Dynamic Index (TDI) is a comprehensive indicator incorporating RSI,
moving averages, and volatility bands. For BTMM traders, it helps in providing
early entry signals and identifying potential reversals with its unique patterns like
“Shark Fins”.

All in all, the BTMM involves a variety of tools placed on a price chart. For some,
it might be confusing; however, a BTMM chart can certainly provide plenty of
trading signals. As you can see in the chart below, A BTMM price chart is made of
a combination of tools and indicators to predict market makers’ traps and
manipulations.
BTMM Strategy PDF Free Download
If you need something to easily carry around and refer to when it comes to BTMM
trading, this PDF is for you:

BTMM Strategy Free PDF Download

Is the BTMM Strategy a Profitable

Strategy?
Undoubtedly, the BTMM strategy provides a huge benefit for traders in
understanding market dynamics and analyzing the markets. The idea of following
market makers makes sense. After all, they have an enormous impact on the
markets since they are the first in the chain to place orders from large institutions
and even governments. In that sense, the BTMM strategy is more about trader
psychology and risk management rather than a technical method of trading the
markets.
If well mastered, then yes, the BTMM can be a highly successful strategy that can
traders identify potential trading opportunities. However, while the BTMM strategy
offers comprehensive tools and insights, its profitability, like all trading strategies,
is not a one-size-fits-all guarantee. Success depends on a trader’s skill, adaptability
to market conditions, and the precise execution of the strategy’s components.

Frequently Asked Questions About the

BTMM Strategy
Here are some frequently asked questions about the BTMM Strategy:

Who developed the BTMM Strategy?

The BTMM strategy was developed by Steve Mauro as a method to interpret the
intentions and movements of market makers and trade alongside them. It’s based
on his years of trading experience and teaching other traders to understand the
market from a market maker’s perspective.

What are the key indicators used in BTMM?

BTMM uses several indicators, including advanced candlestick patterns,
Exponential Moving Averages (EMAs), Pivot Points, the Relative Strength Index
(RSI), and the Traders Dynamic Index (TDI). These tools are used to analyze
market momentum, direction, and potential reversal points.

Can BTMM be applied to all types of markets?

While BTMM is primarily used in the Forex market due to its emphasis on
currency pairs and volatility, the concepts of understanding market makers and
using specific indicators can be adapted to other financial markets to make
profitable trades. However, traders should understand the unique aspects of each
market and adapt their strategy accordingly. It’s also important to consider market
liquidity, volatility, and regulatory differences when applying BTMM to markets
other than Forex.

The information provided in this article is not intended to give financial

Risk Disclosure:
advice, recommend investments, guarantee profits, or shield you from losses. Our
content is only for informational purposes and to help you understand the risks and
complexity of these markets by providing objective analysis. Before trading,
carefully consider your experience, financial goals, and risk tolerance. Trading
involves significant potential for financial loss and isn't suitable for everyone.

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