I think 90% of profitable daytraders are just market makers. They just supply liquidity without trying to outsmart the market. The daytraders that try to outsmart the market are the ones that end up losing because they fail to realize the overwhelming randomness of the market. The simplest definition of market making is buying at the bid with a limit order and selling at the ask with a limit order. But it can't be that simple otherwise everyone would be doing it. So on what basis is liquidity supplied? Tape reading? TA? Momentum? RTM? I also can't imagine averaging up or down can result in profitable market making. I thinks most successful market makers basically trade like 20 stocks all in and all out using limit orders and with the benefit of low commissions and a fast platform. And if they get too much long/short exposure they hedge with futures. Is this correct? Market making is as old as the markets, however I just can't find any good information in it. Please post some good books or blogs about the subject. It's probably a dying business (the discretionary side of it) due to automation but still want to learn how and why it works.