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Wednesday, April 5, 2017


“A brief, and to the point, summary of my trading day.”

I’m a big boy, playing in a game with other big boys, and every once in a while I get punched in the mouth … welcome to my day. It’s happened before, and I’m sure it will happen again in the future. After watching gold these last couple of weeks, I’m convinced this is a market for saps … and perhaps I’m the biggest sap of all, cuz this isn’t a market for anybody to be trading in for a bunch of obvious reasons; 1) no liquidity, 2) eye watering slippage, 3) spikes up/down out of nowhere that hurt most everyone, and 4) stop runs that eventually kill you.

Today is my day to face the gun with the bullet in it that’s got my name on it … and for my efforts I get to be “ass handled” with 3 up spikes that take me out for losses that are around 3%. And the worst part for me is not the money [3% can be made back relatively easily, although I don’t downplay the loss by any means], it’s the fact that you couldn’t get any better algorithm signals than the ones I took today outside of the first trade [where I was looking for stops and didn’t get any]; and what this tells me is that this market is driven BY DEALERS & BULLION BANKS FOR DEALERS & BULLION BANKS, and that I’m a total SAP for trading this shit in any way, shape, or form.

USDJPY is slightly better, but to me that’s like saying dog shit tastes better than bat shit; “oh yea, I see the difference in taste; one has that bitter taste that kills you instantly [gold], and the other simply takes a little longer [USDJPY]”!

I’m not an “excuses” kind of man … sure, I bitch now and then on fills … but I’ve been in the past and am now a complete realist when it comes to markets and how to trade them … and today’s action tells me GOLD is for saps & chumps looking to lose money; and today’s losses put us [me actually] right in the camp of many a large hedge fund manager who has lost a hell of a lot more than 3% attempting to trade gold & FX [including USDJPY] and have completely given up and left the biz … and while I’m not in any way, shape, or form leaving the biz, I am saying it’s time for me to say ADIOS to both … they aren’t the same markets as before. What bothers me more than anything is that the significant portion of the losses today come from “absolutely perfect” algorithm signals … ones that if you gave them to me 100 times, I’d take them 100 times … what does that tell me? “It tells me I’d be almost better off ‘flipping a coin’ every day and going from there; it tells me I’d have equal chances trading MXNZAR and making money as I would if I stayed in this dealer hell hole known as gold”.

Over these last several months, I’ve tested various markets via my own trading account, in terms of what I call “micro liquidity”; and what I mean by “micro liquidity” is how easily can you get size off with market orders, very little if any slippage, and assuming the market is NOT going bat excrement nuts on some news event or economic release, the question simply becomes 1) is it moving and having decent daily ranges, and 2) is there a flow to the up/down movement that allow algorithm signals to work very well over the course of the day WITHOUT vicious dealer spikes shaking out stops for the most part? Is there such a market?

Well, yes there is; actually a “group”, and that’s the stock indices. Specifically, SP500, DOW30, & the NDX100; now granted, lately over the last year conditions have not been so great from a range standpoint, although in the last several weeks things are picking up despite the FED’s best efforts to kill volatility in these U.S. markets. The “flip side”, though, is my question, “so, getting beat up, chopped up, bored to death, and cheated to death by dealers is better somehow in USDJPY and/or gold”? NO, I DON’T THINK SO. And while we know with certainty the FED and the “Plunge Protection Team” is at the ready in U.S. stocks to prevent “waterfall” conditions [until they aren’t], about 80% of the time stocks rise; we don’t have anything near that in USDJPY and/or gold.

The other factor that makes U.S. stock indices attractive are the spreads and RT commission rates at Turnkey; while most likely not the very best in the world on one or other index, for U.S. citizens, you won’t find anything better.

Starting with tomorrow’s trade, I’ll be trading the DOW30, SP500, and/or the NDX100 [Nasdaq 100] and that is the exclusive list going forward into the future; USDJPY, the FX crosses, and gold can kiss my donkey goodbye. I’ve had it up to my eyeballs with getting screwed by dealers stops, significant slippage on market fills, and vicious spikes that eventually obliterate everybody trading. Up until I discovered Turnkey, trading the stock indices in a PAMM/MAM was a “pipedream”; very high spreads and commissions made trading literally the same as trading gold with a $1 spread [yea, try that sometime]. At various times I thought I had some kind of “deal” to trade the indices with other brokerage houses, but they never lasted [most notably Assets FX].

If stock indices go dead? I’ll deal with that if it comes to it, but how is it any different than gold the last 11 days? With very tight spreads and very low RT commission in the DOW30, and the fact that it is starting to move again [250+ point range today and it’s not over yet, 144 point range Tuesday, and 198 points on Monday], and most importantly a somewhat normal “trade flow” that isn’t a compilation of dealer spikes and stop hunts, which I think will lead to very profitable trading in this area.

So yes, I’m going to be changing markets to the 3 indices mentioned above, and the website will be exclusively devoted to my comments about the market I traded on any particular day, along with other things that influence these markets. As for Gold, USDJPY, EURAUD, & GBPAUD … from this moment on I could care less what they do, how dealers screw anyone who trades them, where they end up in price from “0” to 10,000 [or anywhere in between], what the spread is, or how they “moved” [i.e. manipulated] with a spike to take you out and hurt you.

I’m literally going to focus on the stock indices for 4 big reasons; 1) they have “micro liquidity” and the other markets don’t, 2) the cost structure to trade any of the 3 is excellent and rivals gold & USDJPY on paper, 3) outside of reports and news events specific to stocks, the ABSENCE of spikes [mostly down] is most definitely welcomed, and 4) 80% of the time stocks and the indices they represent go higher; that is a significant statistical advantage no other group of markets have. This doesn’t mean I’m going to always be long the indices, simply a fact which I’m not going to ignore.

For those of you in the PAMM, nobody is more unhappy I got “ass mauled” today from the algorithm signals in gold and losing money, than me. And while most managers would just sit around and say, “Meh, stuff happens”; that isn’t gonna fly with me. When I smell shit, I don’t need to see it to know it’s there, and in more ways than one I feel like I got “played” today by the dealer community … and that ain’t happenin’ again.

Whether the Dow, S&P, or Nasdaq is nuts, simply active, average, dead, or on life support, it is the only group of electronically traded markets on the MT4 we [I] can consistently make money going forward without constantly getting screwed every 60 seconds with dealer BS. “Whether you like it or not, it’s the truth … and while I’m not sayin’ everything is ‘peaches & cream’ in trading the stock indices, their action is a hell of a lot more consistent to making money than the casino known as FX or gold. Large banks via the FED & other Central Banks openly & actively support stock prices and many times manipulate prices higher … on valid algorithm signals, why shouldn’t we take advantage of this FACT?

The website’s focus will shift to U.S. stocks, specifically the 3 indices I have mentioned; my first priority going forward is to make the money back I lost today and put us in a position to trade heavier volumes and position scale winning trades; on “up” days, we will be in long positions longer in scope than simply scalping, and on “down” market days I’ll either be scalping long positions, or if there is specific news that warrants sell pressure in the market, I’ll be short.

Today was unfortunate, but let’s not kid ourselves here; as the PAMM gets bigger and the trade sizes get larger, there is no way I’m venturing into the viper den known as gold up against a dealer community whose sole purpose is to rob us via slippage on fills & stops via phantom spreads that don’t actually exist. Sooner or later, this move to the stock indices had to be made, and it might as well be now after a “papercut”, rather than later when gold or USDJPY takes our arms clean off and does some real damage. Trading volatility and “action” are picking up in the stock indices, despite the FED attempting to manipulate it lower; so, there is a “silver lining” here.

FED minutes just released … more BS from the Twits who invented BS … and is the usual case, order books getting cleaned out on both sides while nothing is really happening … light selling in the stock indices on talk some members think stock valuations are “high” … give it to tomorrow and nobody will remember what any of the FED Pie Hole’s said or think, and quite frankly the market doesn’t care. Tomorrow’s blog I’ll detail the stock indices “envelope deviations” for SDEV lines for each of the 3 U.S indices.

To wrap things up here today; “I paid dearly today for information; was it worth it? In the long run, yes it was, but that doesn’t help much when you know you were on the other end of a yo-yo here in the short run. Tomorrow starts our journey back to the stock indices, a place I’m very comfortable trading and should have been since I started here at Turnkey. I’m here to STAY come ‘hell or high water’ until the day I go room temperature. I made millions before in the stock indices, and I’m determined as ever to do it again. Unless we get some kind of super-duper, “flash crash” type of action out of nowhere in stocks, and I happen to be long at the time, what we witnessed today is simply a memory and has a very small chance of repeating again. Nobody knows, but I feel good about it. So, onward I go most likely tomorrow into the Dow30 and get back to first making profits, then getting us even, then consistently staying there as time goes on”. [Note: first trading preference is the DOW30, second is SP500, and third is the NDX100.]

Later tonight I’m going to be redoing the PAMM/MAM spreadsheet, so as to 1) give it a stock indices focus, and 2) summarize since the PAMM inception on 2/20/17 our losses from capital so that people can eventually see what I am going to make up here in the days ahead in the stock indices, and 3) focus attention going forward on the 3 U.S. indices without all the noise from the other FX & gold trades that now have no meaning for me as a trader. I’ll have that redone and including tomorrow’s results when I post tomorrow.

As traders, we all have doubts and then learn to give up the regrets; admit it or not, you know they are there. When I first laid eyes on Turnkey’s MT4 trading platform with their $2 per 100,000 notional traded round turn [RT] commission structure, I said, “oh God, the indices are the place to be”! Sure enough, my first instincts were exactly right on target, and truth be told, if we were in the DOW30 since the election we’d be up so much you’d need a new calculator for the extra digits … instead, the kitty litter box known as gold and/or USDJPY … no more … lesson lived, lesson learned, and I’m back to stay in the stock indices.

Beach beckons … I’m outta here … until tomorrow … cheer up, it’s only 1 stupid day šŸ˜Ž

Have a great day everybody!

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