In the financial markets, often a set of market participants keep on adding long inventory of a particular trading instrument during bull markets (long inventory pile up phase) over a period of time. At times the long inventory goes to the extreme which is often followed by the liquidation of those piled up inventories (liquidation phase). It is a trading good practice to understand which participants are piling inventories and who in the markets are cutting down their inventories.
Understanding who is dominating the market on a given day gives fair advantage and plays a crucial role in deciding trading strategy and executing the strategy at the better price. When the market participants behavior changes one can continually readjust his strategy and change his/her tactics depending upon who is in control.