“All I wanted to do was order some ‘Meow Mix’, and here I am setting up an appointment @ 3 A.M. to get neutered at the Vet? Wait … what?”
Up until I left right after the “fairy tale” NFP report, Friday was one of the worst days evahhh! I have seen in electronic trading, over the whole mix of markets. Oh, to be sure, each market [FX, stock indices, metals, interest rates, & commodities] has had its rough days over the last 15 – 16 years, but throw them all in the same bag at once with headline news, and you have a recipe for disaster; and that “disaster” are gyrating markets that go up/down at speeds most traders [including myself] find not at all conducive to making money. Get on the wrong side of a couple of these vicious swings and you’ll be like internet Kitty above, looking to book a reservation at the nearest animal shelter to get your trading balls back.
Because here’s the thing; you always have to recognize and remind yourself why you are being allowed to trade by the banks/LP’s; why are they giving you and your piddly retail account such easy access to a multiple trillion dollar per day market? ANSWER IN THE FORM OF A QUESTION: “why do the swankiest casinos in Las Vegas offer penny slots?” SHORT ANSWER: “they’ll take any amount of your money any way you want to give it to them.”
“If the LP is the squirrel, guess what your account is to them?”
So, when trading is so utterly chaotic simultaneously across multiple markets, probability theory is out the window, GBP & NFP stupidity reigns supreme, and not wanting even to be tempted by this kind of market bullshit, I left early; when I got back and took a look at what I missed, I realized immediately leaving was the right choice. If the probability for a profitable trade is not on my side, via algorithm rules, I simply will not be an “ear of corn” for some fucking LP who views my account as “lunch”!
I have repeatedly, in the past, told people there is no “perfect” brokerage house to trade at; they are all conduits for bank liquidity providers [except Saxo Bank which is its own], and thus are no more than marketing tools and middlemen for the banks because the banks do not want [under any circumstances] to have to deal with the retail trading public. So, before I consign the great “Cable Disaster of 2016” to the history books, I want to point out something I should have done on Friday; and this is an important point. Let’s take a look at the “flash crash” in Cable at LMFX and see what happened on their MT4 trading platform, and then compare it to the “rape” at ASSETS FX. Directly below, the GBPUSD candlestick chart from LMFX.
And, just as a comparison reminder from Friday, the chart below from ASSETS FX.
“Why yes, you too can lose almost 1,000 PIPS to the criminal LP for no fucking reason other than pure greed. Yes, special indeed.”
On the face of it, it’s borderline criminal what the LP crooks did to the trading clients of ASSETS FX in Cable [in my opinion, the LP was Standard Financial, which is Citibank, but it could be somebody else. Not that it makes that much difference, but I thought you might like to know which LP I thought either started this or piggybacked somebody else on the way down.]; AFTER FRIDAY, THERE’S NO REASON THIS LP SHOULD HAVE ANY CLIENTS. Oh, they’ll be quick to “hem & haw” like a flock of chirping birds in heat about 1) fast chaotic markets, 2) no liquidity with disappearing bids, 3) widening spreads 50X normal, 4) computer systems run ‘amok’, and 5) a combination of any or all of the above, but the one thing they won’t ever talk about in public is how they live to feed off of these events all the while escaping legal scrutiny because as we all know “the only rule” in FX trading is simply this: “there are no fucking rules!”
EXIT QUESTION FOR THE LP @ ASSETS FX: “Since all dealers and LP’s face the same market conditions, have the same basic computer & networking systems, and are tied at the hip to every single level 1 top tier bank trading desk in the world on down, how is it your low bid price is a whopping almost 1,000 PIPS below the same quote @ LMFX, thus totally screwing any customer sell stop to the tune of almost 1,000 PIPS?"
ANSWER FROM THE LP: [crickets]
Of course, there is an answer, and it comes in 2 parts; the first part drives the second part: 1) absolute pure greed, and 2) the computer & networking systems are INTENTIONALLY PROGRAMMED to execute market orders with the lowest of the low ball bids/offers from a “pre-defined” list of 20-30 banks around the world; your order to sell, at any given millisecond goes to the bank for execution WITH THE LOWEST BID, and if your order is to buy, your order goes to the bank with the HIGHEST OFFER. This “pre-defined” list of banks runs the gamut from tier 1 banks like JP Morgan to tier level 5 banks in some shithole parasitic banking backwater nobody ever heard of before. In the case of a liquidation sell/buy stop on a position, that order is automatically routed back by the system to the counter party bank holding the other side of your initial position; there is no “competition” [hahaha] for your stop because the position needs to be closed with the originating bank, NO MATTER THEIR BID/OFFER QUOTE, WHICH IS MORE THAN LIKELY TO BE OFF THE MARKET WITH OTHER BANKS! So, in the case of what we saw in GBPUSD on Friday, there is the very real possibility some traders at ASSETS FX actually got filled BELOW THE LOW @ 1.10217.
And this kind of bullshit happens all the time in multiple markets; only not nearly with the severity of what happened in Cable; more like a “paper cut”. Many times, as I’m liquidating a gold position the liquidating price on my sell comes back $0.05 - $0.15+ below the bid/offer I’m seeing on my screen. Why? Because my liquidation order to close is not going to ALL bullion banks, it is strictly going to the bullion bank it originated from [i.e., the bank that had the highest offer at the time I bought, even though my trading screen ALWAYS shows highest bid/lowest offer, which from a trading standpoint is a total joke and pure fictional bullshit], and many times their quotes are “off the market” intentionally as they seek greater profits for themselves that they split with the brokerage house. In other words, the vast majority of banks in this “game” of trading are parasites; feeding off the host [the market] hoping you won’t care or notice for simply a few pennies. Great work if you can get it, all the while repeating the process a million times over during the trading day!
This is the “raison d’etre” of WHY IT IS SO IMPORTANT TO “BUY” VIA ALGORITHM RULES, AND TO LIQUIDATE GOLD ON THE WAY UP AS PRICES ARE RISING ON ABOVE AVERAGE SPIKES SINCE THE INCEPTION OF THE TRADE, OR AT WORST, WHEN IT STALLS; because if you have to liquidate when it turns around and starts going down, YOUR GOING TO BE LIKE MY FRIEND DIRECTLY BELOW!
“Please Lord, a ‘special place in hell’ for those LP’s that fill my liquidation order way off the market. Amen.”
So, while all the powers that be feign shock … SHOCK I TELL YOU … with their faux outrage over some LP who decided they needed a “quick” capital injection to meet customer losses they had to back via huge losses in gold & JGB’s and figured out GBPUSD was ripe for the pillage, the “dirty little secret” whispered to LP execs all over the world by their CEO’s on Friday was, “Christ, why can’t we do shit like this? Johnson, form a committee and study this and get back to me ASAP; damn, I could use a bigger Christmas bonus!” And so, after the SNB showed them all how to do it back in Jan. of 2015, these “one offs” are happening with more frequency than anyone would like to admit; now you know why.
And so, the brokerage house & dealer crime syndicates just sit back, watch with hidden glee as the customers “bitch, scream, holler, moan, threaten legal action [hahahaha, that’s a good one!]”, AND THEN RAKE IN MILLIONS OF DOLLARS JUST TRANSFERRED TO THEMSELVES IN SECONDS AT CLIENTS EXPENSE. “Thank you, please come again!”
And while ASSETS FX aren’t the ones that did this to their customers, and they have no control over what an LP does, it isn’t like they haven’t been warned of this kind of behavior in the past by the LP in FX. After all, I let them know in no uncertain terms of what I thought about their actions when they refused to fill my limit sell order in EURJPY @ 121.175 on its way to 121.270 before immediately dropping to 121.080. [see Friday’s post for details if you want more] And, just for the record books, they never did do a damn thing about it.
So, my message to ASSETS FX is simple; I realize you had no part in totally screwing your client base in GBPUSD on Friday, 10/7/2016 during the Asian “flash crash”; I’m not blaming you. My question, however, is a simple one: is the LP still on your platform? Because if it is, I guess you have no problem seeing your clients get royally screwed on sell stops. If I owned your business, I would have told them by Friday afternoon to “get the fuck out and don’t let the door hit you in the ass as your leaving; you’re finished on my MT4!”
Now, if they are still there with you, the next question is why? It can only mean money; they either agree to give you part of the “customer spoils” from the flash crash, or they give you a bigger piece of the spread going forward; please explain to me how this arrangement benefits your clients in any possible way?
And, if all this isn’t enough, we know from the last few weeks that the LP made changes to their crude oil CFD, seeing it go from an above average instrument for customers to one of the worst on the market in a day. “Any bets out there, that the same LP in GBPUSD is the one in Crude Oil also?”
To be fair to ASSETS FX, their spot gold [spread, round turn commissions, and minimal slippage] trading is still [and has been for a long while] one of the very best on the market along with LMFX [I know it’s hard to believe, but it’s true]. While at times I get a little annoyed with some slippage that I think is a “little over the top” with market orders, it’s still only a matter of a few pennies I’m trying to squeeze out on a position. Their recent additions of “new” stock indices [especially the DOW30, SP500, & DAX30], so far at least are very good; “net” trading costs are “reasonable”, and so far I don’t see any problems with slippage.
We’ll see what happens with these CFD’s in the days & weeks ahead; ASSETS FX history with stock indices isn’t a very good one. It was 2 years ago at this time on the calendar, that they first introduced stock indices onto their MT4 [October 2014]; since then, the current “new” CFD’s are the 4th set [with 4 different LP’s] that are supposed to impress. It’s very early still; let’s see what they do with 1) round turn commissions, 2) spreads, 3) slippage on market fills going forward, and most importantly 4) not if, but when there is another market panic to the downside in the DOW30 or the SP500 in the future, what kind of shenanigans is this “new” LP going to pull? Will the CFD’s be on the futures market, or will the bottom drop out like what happened in GBPUSD to screw customer stops below the market that have no business being hit and set off by the LP? I guess we got something to look forward to don’t we?
As I looked over the action from Friday, when I got back from the beach and after dinner, it very much looked like a small capitulation move occurred at the European close, when somebody [read BIS on behalf of the Fed] monkey hammered gold lower in a $10 blitz in 3 minutes with $2 billion notional of futures contracts at the market [see Zero Hedge for details]. Either that, or it was the dumbest hedge fund manager on the planet [theoretically possible, but highly unlikely]. I’ll ask the question again; “What kind of normal [haha] trader person that cares about price, after a $70 price move to the downside in 4 trading days, sells 2 “large” at the market at the bottom?” Well, nobody I know that’s going to be in this business very long with behavior like that; which reinforces my belief he/she didn’t care at all about price, and that means it’s the manipulators punishing day trader longs. Directly below the RM=3 move within a minute of the European close @ 18:30 LMFX server time.
So, coming into today, what’s the worst thing you can possibly see on your screen if want gold prices to go higher today? That’s right, the numbskulls in Asia rallying gold about $8 per Oz., buying like they always do, and then watching the price drop. Seriously, these people need psychological help; “how many weeks/months/years of data do you need to convince you that if you wait to buy in New York you will get consistently cheaper prices? What the fuck is wrong with you? Pay some young MBA 100 Yen per hour to sit and wait for the manipulators to strike and buy it then; for the life of me, I can’t understand the idiocy and dementia of these traders!”
And of course, with that having been said, here we are at midday New York with what … a $3 - $4 per Oz. chop session that sees prices unable to go up or down. Exactly what am I supposed to do with this? I’ll tell you … leave it alone and come back tomorrow … not that I want to … but I’m unwilling to subject myself to a trading strategy today that consists almost entirely of hope … “as in I hope it can go higher … please?” No thanks.
This time of day all it takes is eye contact with the dog for more than 2 seconds, and a little grin on my face that says, “ready to hit the beach?”, and he’s scrambling like a fighter jet looking for Ruskies, trying to locate his leash, nurfball, and the all important bag of Beggin’ Strips. Time to unleash in the beauties of the turquoise water and forget markets … I’m so outta here … until tomorrow.
Have a great day everybody!
OPEN A DEMO AND/OR LIVE ACCOUNT AT THE LMFX LINK IN THE “DOWNLOAD LINKS” SECTION OF THE WEBSITE TITLED “OPEN TRADING ACCOUNT – DO IT NOW!”