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Thursday, May 31, 2018

“SCUMBAGGERY”, TRADING, & THE NATURE OF MARKETS

“It’s not easy understanding how markets currently work.”

Things in markets are never what they appear to be on the surface; nowhere is 
this more evident than the crude oil market, and the ways to trade this market. 
The entire oil biz is priced on front month futures; ⅔ of the world uses Brent 
[Europe, MENA, Asia], and the other ⅓ of the world [U.S., North America & 
South] uses WTI; Brent futures are traded on ICE, and WTI on NYMEX, a 
division of the CME. 

The difference between the two is that WTI is a lighter blend, and has a lower 
sulfur content, and is thus easier to “crack” for gasoline. Brent, on the other 
hand, is a heavier blend with a higher sulfur content, and is more suitable to 
“crack” for diesel fuel & heating oil. Brent is more affected by geopolitical 
turmoil, and so problems in the middle east affect the price of Brent a lot more 
than they affect the price of WTI. 

Right now, both crude oil futures markets are in “backwardation”, meaning 
farther futures deliveries are “lower” than the front month; WTI about -15 
cents 3 months out, and Brent about -30 cents 3 months out to the front month. 
Since there isn’t much difference between the two, many professional traders 
love to trade the WTI/Brent spread, and currently it’s over an $11.00+ per 
barrel premium Brent “over” WTI … and when you’re trading a 1 penny 
spread market in both, it’s pretty easy to position the spread via futures.

Which brings me to current scumbag LP bank “scumbaggery” in the CFD’s 
traded through offshore brokerage houses. Right now, being long Brent & 
short WTI with a 1 lot for each, will cost you EVERY DAY via the rollover  
“vig” charged by the bank, $1.78 for WTI short, and $1.03 for Brent long; 
that = $2.81 per day, WITH TRIPLE VIG ON FRIDAY, so for the week it 
would cost you $14.05 M-F & $8.43 for the weekend, so for the week you’d pay 
$22.48 in “vig”“wait … wut? … aren’t the back months in backwardation, 
meaning they are actually cheaper than spot? … and so the damn bank can 
actually get paid to hedge your position and then charge you $22.48 per week for 
the position? … yes, scumbags top to bottom, and don’t forget the spread on each 
pair, which will be another $80.00”!

So, what’s my point? … the point is simple: “you’re here to trade, not position 
over days and weeks … the bank has no interest in your ideas concerning the 
future, they’re only interested in “now” … and because of this, it becomes vitally 
important you realize how important the spread is, cuz the bank is literally forcing 
you to day trade or even shorter … because of the volatility in this market, 3 or 4 
cents as a spread can be tolerated, and at the same time give the bank their “vig”  
in making the market … 5+ cent spreads can’t be justified, and the damn bank 
knows it, yet that doesn’t hold back their pure greed, as they often blow the spread 
out for no reason … under those circumstances, you take a hike and tell them to 
“F off”, and that’s exactly what I’ve been telling them [Turnkey & the LP’s], cuz 
the only thing they understand is the loss of revenue; everything else is 
meaningless to them”.

And they’ll look you in the face and give you their “tale of woe”, of how much 
they got invested in computer networks, how fast markets move, how many 
customers want to “pick them off”, and “blah blah, yada yada” until your eyes 
roll into the back of your head … “stop, I’m getting tears in my eyes”. And I 
would simply remind everybody, that approximately 11 years ago, a VP at Saxo 
Bank told me, “yea, you’ll never see in your lifetime a spread lower than 6 ½ 
PIPS in GBPJPY … what we got here at Saxo can never be beat”! Checking the 
latest spread here via Turnkey, I see a spread of  0.4 PIPS, and even with 
“scumbaggery” that means a fill within 2 ½ - 3 PIPS. So, what happened? “It’s 
called competition for business, something the idiot bankers don’t want to hear”!

Yes, it would be nice to position trade the Brent / WTI spread; it would be great 
if the idiot bankers had CFD’s in gasoline & heating oil too, and it would be nice 
to trade the “crack” … the first bank [s] that come along and price it right and 
make it available will make a fortune with the trader community that has less 
than $5K in their account … it’s probably as big as the futures market, but that 
takes “vision”, and none of these assclowns even have enough good “vision” to 
hit the toilet when they pee, let alone see potential in “bigly & yuge” markets. 
So, we got the CFD’s right now … and in the works, I’m planning futures, and 
with futures we also get “options” [puts & calls], which I’m thoroughly 
proficient in and have used in my personal account for decades, and now at that 
point I got MAX flexibility. [Note: Much more on this later, when it becomes 
appropriate … right now, I’m focused on the oil CFD’s, following the algorithm, 
and bringing profits back home to the PAMM. We’ll get to the futures when we 
get to them.]

The nature of markets today has drastically changed from just a few years ago 
… outside of actual, physical commodities that have worldwide appeal, the 
scumbag banks control and really manipulate trading every single day 
… except, they can’t control crude oil. That doesn’t mean there aren’t “stop 
hunts” or gaps in price … hell yes they’re there, it simply means it isn’t coming 
from a bank prop trading desk where they’re front running a corporate order 
and bagging the trade for profit.

Turning to today’s crude oil markets … “hey, who’s up for some trading 
volatility”? … haven’t seen anything remotely like this in the FX complex for 
months on end, especially Cable … “just another day in crude oil … bon 
appetit”!

Only one trade today … PAMM up half way to 0.1%.

Today was interesting to say the least … first on the agenda is the “trade war” 
via China , Canada, Mexico, & the E.U., and the tariffs announced this 
morning by Sec. Ross literally “spooked” WTI oil down the drain [Brent held, 
thus blowing out the spread to above $11.00+] … that was followed by a rally, 
where I got the first weak algorithm buy signal [there are 2 buy/sell signals in 
crude oil; one “weak” for scalp, and the other “strong” for a longer hold period 
if justified by market action, and thus “let the pony run” kind of trade … this 
one was “weak”.] That was our one trade today.

That sent us into right before the 11 A.M. EST. EIA crude oil inventories report 
for Cushing, OK. [the main hub for WTI oil deliveries], where instead of a 
consensus forecast build of 0.92 million barrels, we got a drawdown of 3.62 
million barrels … and price is up $0.40 - $0.50 in a second. A new high for the 
day is set, and now comes the long liquidation, and I’m looking for a buy signal 
… that buy signal never came, cuz literally in the next 20 minutes, price goes 
down straight, and is now below the level before the report.

An hour later or so, I get a “strong” sell signal, but I don’t take it … why? 
Well, Brent is hitting a new high for the day at the same time, and I’m 
wondering what the hell is going on, cuz either Brent comes down, or WTI 
explodes higher, and given the inventories report, I think the probability for 
WTI higher is better than Brent lower … wrong … Brent gets “monkey 
hammered” minutes later, and now WTI hits a new low for the day … “thank 
you Mr. Market”! …  since then it’s been a slow climb higher with no follow 
through, the spreads have widened, natch, cuz the banks won’t let you stay in 
without penalty ‘till the end of the day without putting a gun to your face and 
holding you up for that little extra. All told, we had 3 trend changes today, and 
they came fast and furious, while only 2 buy/sell signals … thing is, when this 
market moves, it goes, and it can miss moves simply cuz the algorithm can’t 
react that fast; if it did, there’d be way more “false positives” for loss, and 
that’s not acceptable.

I said yesterday, that today I’d have some comments on a surprise market; 
I’ve decided to hold off on that ‘till tomorrow, and thus make the comments 
current for the entire weekend. All told with what transpired today in WTI oil, 
with 3 very fast and vicious trend changes, I’m extremely pleased with the 
algorithms performance … it avoided trouble, it gave me a decent scalp, and it 
gave me a sell signal that worked beautifully if I had taken it … given that kind 
of scenario again, I’m taking the signal … lesson learned. In the final analysis, 
today’s action is nothing “special” … oil sees this kind of volatility all the time 
… it’s why we’re here. So far, zero slippage on fills, and about 80% of the 
trading day the spread is “acceptable” … not optimal, but I’m working on 
them to make it better. This is a great market, and I’m kicking myself in the ass 
for not being here sooner … I’m all about profits, and I don’t care if I’m 
trading dirt futures … and boy, does the algorithm ever produce in this market 
… Cousin It & CoS (Chief of Staff) Milton Waddums are “killing” the futures 
in this stuff for their personal accounts … “they’re starting to make tons of  
money and acting like real professional traders! … oh, the humanity”! 

The future’s so bright, I need sunglasses … and with that, I’m outta here 
… until tomorrow mi amigos … Onward & Upward!!

PAMM Spreadsheet directly below.


Have a great day everybody!

-vegas

OUR TURNKEY FOREX “PAMM/MAM” IS NOW OPEN AND
OPERATIONAL; SEE “PAMM/MAM MONEY PROGRAM” IN
“DOWNLOAD LINKS” SECTION IN RIGHT HAND COLUMN
FOR DETAILS [VIEW ONLINE AND/OR DOWNLOAD] AND
START YOUR JOURNEY FROM WHERE YOU ARE AT TO
“ESCAPE TO SUCCESS”!

  














 

Wednesday, May 30, 2018

NEW DAY, NEW MARKET … ALL THE VOLUME YOU WANT!

“What can possibly be better than swimming in crude oil?”

If crude oil moves, the oil algorithm will capture a good portion of the move, 
under normal trading circumstances … Brent or WTI makes no difference. 
Today sees OPEC rumors and the usual suspects talking oil up & down, 
making for the world’s most heavily traded physical commodity, that puts FX 
in the “old people’s home”, put in an above average range. Cuz in these two 
markets, it’s not the banks calling the shots … they have no power or control 
here.

Today sees over a $2 range for the day, where each 1 penny move is comparable 
to 1 PIP in any of the FX pairs. The oil algorithm absolutely nailed the price 
move today, and while I wish we were able to trade the futures instead of a bank 
CFD, that possibility has to wait a while. 

And while price was moving, I was engaged with the brokerage house on a 
number of issues that have literally robbed us of profit in the past … sure, I 
didn’t hold back one bit … of course, I’m not blaming them cuz it’s the 
scumbag LP bank’s who are at fault, but they are the liaison between the bank 
and us, and have no choice but to hear my concerns and issues. Without them, 
we have no standing with the banks, and can’t even get a “hello” from the 
a-holes.

Only one PAMM trade today … really, a test of the WTI CFD to see the level of 
 “scumbaggery” they might pull when actual money is at risk. No slippage on the 
fill getting in or out, but before you clap your hands in glee, with a 3 or 4 cent 
per barrel spread, there shouldn’t ever be any slippage, so getting what we 
should is hardly a reason to give them credit. Today has seen the spread from 1 
cent to as many as 6 cents; I’ll trade if it’s 4 cents or less, but anything 5+, they 
can forget cuz it’s not in our financial interest to give money away to these 
scumbags. Most days will see the spread either at 3 cents or 4 cents for the U.S. 
trading day, with a sprinkling of 5 cent spreads to trap the unwary. And, they 
won’t explain what separates the need to raise the spread other than, “ummmm 
duh, market conditions, duh!” “It’s a B.I. Itch when you have to lie to explain 
highway robbery, but since they’re used to it, I’m pretty sure they don’t care or 
lose any sleep over the practice”.

So, the one trade I did make today made a few bucks ... nothing significant 
… and tomorrow sees regular trading start in WTI.

As with any derivative traded, the only scenario where problems arise for the 
algorithm, is if volatility collapses to below normal levels and stays there 
… with increasing world demand for oil, increased geopolitical issues that could 
potentially impact oil markets, political instability with ever larger deficits and 
debt, I have a very hard time seeing anything that could make crude oil “dull & 
boring” with no range, day after day running into weeks and/or months. But, 
even if it did, how’s it any different than the current crapola in FX? As I said 
the other day, show me how we are at any disadvantage trading crude oil [Brent 
and/or WTI, makes no difference] versus anything in FX .., if the spread can 
stay decent [2-4 cents], given the ranges, we are actually better off than before.
I’ll have more on all of this tomorrow, including a surprise market I want to 
talk about as well … and with that, I’m outta here for a cold one … until 
tomorrow mi amigos … Onward & Upward!!

I’ll have the updated PAMM Spreadsheet here in a few hours after dinner, and 
I’ll post it directly below.

UPDATE 6:00 P.M. EST.: PAMM spreadsheet directly below.


  Have a great day everybody!

-vegas

OUR TURNKEY FOREX “PAMM/MAM” IS NOW OPEN AND
OPERATIONAL; SEE “PAMM/MAM MONEY PROGRAM” IN
“DOWNLOAD LINKS” SECTION IN RIGHT HAND COLUMN
FOR DETAILS [VIEW ONLINE AND/OR DOWNLOAD] AND
START YOUR JOURNEY FROM WHERE YOU ARE AT TO
“ESCAPE TO SUCCESS”!