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Friday, July 14, 2017


“Always check the pool before entering!”

We live in a world where events and circumstances happen and change so quickly, it’s literally impossible to keep up. In financial trading, from the start of the “modern era” in the late 1970’s up to around the turn of the century [1999 – 2001], that pace remained steady; oh sure, there were technological innovations that came about because of the computer revolution, but the “art & science” of trading pretty much remained the same. Starting from just after 2001, came paradigm shifts that started with electronic trading and removal of physical “pits” and the end of an individual trader’s need to use the CME or any of its affiliates [e.g., COMEX, NYMEX, etc.].

From about 2001 to April 2012, as the world came to grips with shocks it never expected from the 2008 housing bubble collapse, traders started to become relatively comfortable with online trading, while the industry as a whole, dealt with scam brokerage houses rushing in to open accounts, taking customer money, and then disappearing. This isn’t much of a problem anymore, thanks to the LP banks making it much tougher, from a due diligence standpoint, for anybody wanting to set up a brokerage house and clear customer trades through the LP bank. In fact, what the record shows is that the U.S. leads the world in scams the last decade; to wit, 1) Stotler, 2) REFCO, 3) MF Global, and 4) just recently FXCM. “I guess all of that wonderful regulation from the porn watching CFTC, NFA, & SEC didn’t do much good did it? Oh, and how about regulation & monitoring by the CME? Nah, too busy taking cash from HFT’s and others for quicker access to its Globex servers to worry about your piddly futures account”.

And then comes April 2012, where the FED & BIS [Bank of International Settlements] come in one day and slam gold lower by about $100 per Oz. in a coordinated manipulative attack on the market that nobody has ever seen. Of course, now it’s commonplace and doesn’t even raise an eyebrow when they slam gold lower, but back then it was news. Enter the BOJ & ECB and the shenanigans they started pulling away from U.S. markets, and in retrospect trader’s should have realized [including me] it was only a matter of time before the FED joined the manipulative party.

That brings us to February 2016, where after a bear market in crude oil sent prices into the 20’s from the 100’s a while earlier, the FED sent in the “Plunge Protection Team” [PPT], heretofore reserved for stock indices, into the oil market to save the energy industry in the U.S. from bankruptcy and oblivion. And from that moment, anything and everything traded is at the “whim” of a central banker; when you have unlimited power and the CNTRL-P machine to print as much money as you need, what’s going to stop you from pricing a market [any market] where you want it priced for policy objectives? Strictly from a stock indices and stock market aspect, I don’t see protesters outside any building anywhere protesting higher stock prices with signs and angry protesters; simply put, who’s gonna protest higher stock prices, and what person who works and has any kind of IRA, or 401(k) doesn’t want to see higher stock prices? So, the FED knows you aren’t gonna care if they manipulate prices higher and give you a “FED put” underneath your portfolio. While it may go down from time to time, there isn’t gonna be anymore 40% declines or anything like that, as long as the CNTRL-P machine is on.

Which brings us to the other side of the equation in financial trading, the brokerage houses. Before I get started, though, let me just say I am totally pleased with Turnkey as my current brokerage house of choice; don’t live under any illusions that there exists a “perfect” brokerage house … there isn’t one and won’t be one anytime soon. And also remember, brokerage houses are simply the “middleman” between us and the scumbag LP’s, who refuse to deal with us cuz they don’t want the scrutiny. In any event, it is what it is, and we live with it, deal with it, or we don’t trade … it’s that simple. From a relative standpoint, Turnkey has excellent customer service [could be better, but I could say that about them all]; their round turn [RT] commission structure for STP/ECN trading is the very best I have seen [meaning the lowest] at $2.00 per RT per 100,000 of notional value; and their spreads are among the lowest and best out there and rival institutional rates not seen at many places. It’s very easy to open and fund an account, and withdrawals are handled quickly and efficiently. So, all in all … yea, I’m glad we are here!

However, I’ve said before and I’ll say it again, for a myriad of critical reasons, you have to be insane to have a trading account in the U.S. That leaves “offshore” brokerage houses [“offshore” defined as simply non U.S. domiciled] as the only option and the dirty little secret is that 90%+ of those don’t or won’t take U.S. citizens or residents as clients, simply because [thanks to Obama and his crew of socialists] they don’t want the “hassles” of U.S. law.

Still, no matter where you park your funds and do business, you have to constantly monitor your brokerage house for any “hints” that there might be problems on the horizon; I can’t stress this enough, cuz over the years and years I have traded, I have seen plenty of good brokerage houses, who for years had good, solid reputations, go down the “rabbit hole” into oblivion very quickly, all the while giving hints months before that there were problems. Just as one example, I got my funds out of Forex-Metal before they went rogue and were labeled a “scam brokerage house” by Forex Peace Army because of problems that started with spreads ballooning, customer service going downhill, and a problem I had with a small withdrawal weeks before I moved my entire trading account.

What usually happens is it starts with a severe drop in the quality of customer service; your statements via email become erratic, emails don’t get answered, live chat is unresponsive and never available, and their phones go “dead”. You get this, and it’s time to leave … like right now, and there’s a chance it may be too late anyway. My point, though, is to remain vigilant … keep your eyes and ears open, and always stay on top of things.

To this end, I’m sad to report that LMFX has dropped to the point where I would not feel comfortable keeping my funds there in an account. As many of you know, last year I not only had my account there, but I also was an affiliate IB, where I was told we could start our PAMM very shortly … that was over a year ago … fact is they lied, and I found out why they lied at the end of last year … they were selling the brokerage house to another group [unknown and wouldn’t say who] and didn’t want to start or do anything to upset things … Ok, well I don’t like getting lied to no matter the circumstances, so I left cuz I know what their actions mean.

That ushers in a new group who doesn’t want to be known, who change banks to somewhere in Eastern Europe, and from what I gather from some clients who still had accounts there … even though I told them to get the hell  out and leave way back in December … nope, they stayed until recently. Long story short, one guy started his withdrawal process at the end of April of this year … it’s now mid-July … he just got his money yesterday … it took him just over 10 weeks of screaming, yelling, threatening, a zillion emails wanting his money … what he got back from them that he showed me was every excuse in the book for why they couldn’t send the money right now, but in a couple of days it will be sent … we promise … only, more time elapsed, the excuses got more bizarre … until yesterday, when the money finally showed up and he got charged by LMFX $60 for the wire. EXIT QUESTION: “Would any of you find this acceptable behavior on the part of the brokerage house, and would any of you keep funds there”? If any of you reading this had an answer other than “hell NO”, trust me, LMFX would love for you to open an account and fund it … happy trading.

So, what once was good and OK, has turned into bat guano within a year; nothing is ever “written in stone”, cuz things change for various reasons. I’m glad he got his money, but my lecture to him still stands; “you have to heed the warning signs, and when you ignore them, bad shit happens. Learn from this”! Now, just to be clear, I’m not saying LMFX is a “scam brokerage house”; what I am saying is that I definitely disapprove of the way they handled this gentlemen and the process he had to go through to get his funds … it’s disgraceful and LMFX should be ashamed of itself … of course, they won’t be, and it’s business as usual … that isn’t good enough for me and it shouldn’t be good enough for anybody else either, and it’s why I wouldn’t keep a nickel there going forward.

Turning to today’s market … ZZZZZZZZZ … ok wait, let’s give it a chance shall we? … why I don’t know, cuz it very much looks and feels like another “Flying Wedge of Death” [FWD] kind of day with an upside bias … but who knows, we’ll find out via the ‘setup” shortly.

It’s Friday, and I’m gonna just recap the day … I’ve been in this biz a very long time, trading stock indices since the beginning … this is the weirdest day I have ever seen … I have never seen the SP500 so manipulated on the buy side ever … by the same token, the Dow30 is all over the place with a correlation matrix that has lost all meaning … I’ve mentioned it before, but today is the worst I have ever seen, and that’s saying something since I’ve seen more trading days than most … add to that, today was the worst day I have seen with “speed of light … crickets” trading conditions since the central bankers decided to make the stock indices their playground … the gaps in price discovery, the speed at which it goes up/down from nothing, and the endless M1’s where the ranges are 1 or 2 points and literally goes nowhere for hours is really baffling and strange … it’s a manipulated market; in no way, shape, or form does this market resemble anything it did prior to 2016. Did you know the CME now offers discounts in clearing fees and commissions to central banks that trade Dow30 & SP500 futures? Could there possibly be any greater admission than this? Since the inception of central banks into the stock indices in February 2016, this is the biggest intervention, manipulative jack higher I have ever seen. It’s only been about a year and a half … I’m sure in the future there will be more with more gusto to come. Seriously … God help this country with all of this, cuz when it blows up [which someday it will], the mess will be unbelievable.

Of course, throw in slippage into this mess, and the scumbag LP [if this was a just world] would simply be hung … what they do to orders that I can see from the quotes is literally criminal, but there isn’t anything anybody can do about it cuz it’s the only way you can trade … you can bitch and scream at them all day and night, turn blue in the face, and it won’t raise an eyebrow over at the bank … deal with it.

Today was one of those days where I walk away happy I only lost a couple hundred bucks … trust me, it could have been far worse … it wasn’t, cuz I know what I’m doing, but the speed at which the stock indices mete out punishment is staggering … throw in slippage, and it’s a very bitter pill. So, I’ll take the splinter out of my finger, and look forward to next week. Look for some DAX30 trades next week, as I throw in some “Dow30 from Germany” into the mix; lately, this market has picked up and the version 4 algo is doing very well there. No reason not to trade it in the early hours. Onward & Upward!

PAMM spreadsheet directly below.

Time for the beach … dog and I are outta here … until Monday.

Have a great weekend everybody!



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