“Not exactly a rock solid foundation to build on!?”
It is the curse of modern day trading in the electronic era … we simply have no
way of knowing what goes on behind the scenes at brokerage houses scattered
around the globe … good one day, complete shit the next … are we as customers,
notified of management changes, changes in LP’s, different global platforms,
additional markets or ones about to be deleted, new agreements between
management & banks that are to our detriment cuz “all of a sudden” slippage is
built into the equation? … HINT: “hell no, customers are always the last ones to
know anything”! … and it’s been like this since “DAY ONE” from the start of the
21rst century.
And of course, customers & clients of brokerage houses across the globe are left
holding the bag when they decide to let greed take over at our expense … quite
frankly, they build their business model, and lay foundation, right at the edge of
the shore on the sand, and all it takes is one guy with a big wallet to come in and
change everything … usually I might add, not for the better … however, capitalism
in its truest form, and I’m not talkin’ about “crony capitalism” or “corporate
facism” that is all the rage in today’s U.S. corporate sector, is a self correcting
process that automatically weeds out the bullshit and cuts to the bottom line in
whoever has the best margins for profitability, while at the same time pleasing
clients … everybody else either adapts or dies, and we as customers win.
Everybody these days pretty much takes very tight bid/offer spreads in FX for
granted on the MT4, MT5, or proprietary platforms offered by thousands of
brokerage houses … sure, there are minute differences in spreads, usually
measured in tenths of a PIP, but there isn’t anybody getting rich offering USDJPY
at a 3 PIP spread like 15 years ago … well, why not? … cuz the entire planet is at
1-3 tenths of a PIP on the low side, and maybe 4 - 6 tenths of a PIP on the high
side, with varying scales of commissions, and there is no way in hell even the
dumbest carrot of a customer is going to pay 3 full PIPS to trade USDJPY … no
way would you survive as a brokerage house.
When it comes to the CFD space, or “spread betting” if you prefer, it’s where FX
was 15 - 20 years ago … hell, it wasn’t until Spring of 2017 that you saw the very
first “reasonable” bid/offer spreads in stock indices start to become widespread,
and Turnkey was one of the first to go “low” … and it’s only been in the last 3 - 5
years spot gold has come down to where it is [13 - 20 cents per oz. spread] from
the 40 - 50 cent level … granted, gold has other problems, but my point here is
that the CFD space is an evolving, slow process, event driven animal, and we
aren’t anywhere near “Optimal Conditions” on an industry wide scale … and this
is something I’ve been literally screaming at brokerage house execs for like
forever … “gain market share by slashing costs and give clients “SERVICE &
MARKETS”, and then keep it there and don’t fucking get greedy”!!
Many times, it’s the scumbag LP banks that force changes on brokerage houses
by raising fees on their platforms … currently, in order to get the markets you see
on your screens now, it costs brokerage houses anywhere from $15 - $20
thousand dollars PER MONTH, which they pay the banks for making the market
… if you’re getting “squeezed”, what are you to do when the banks come calling
and tell you, “no worries, we’re going to introduce some slippage into the fills
and we’ll cut you in on part of the take … all that for a very slight increase in our
platform fees of $15K per month to $17K per month … we all win”!
One of the very big reasons there aren’t more PAMM'S and/or MAM'S, is that
money managers can see the disruptive process brokerage houses present
them … and many clients erroneously think, “oh well, why did he/she go here
and have me open an account here and now we have all this shit?” … well,
guess what? … none of us are “in the loop” when SHTF at brokerage house “A”
and there are problems … we’re all lied to just like everybody else is! … up until
crypto came along about a year and a half ago and made deposits / withdrawals
“easy peezee, cheap & quick”, people had to utilize bank wire transfers, which
are slow & expensive, and nobody but nobody wants to pay these scumbags to
move money.
Cuz I’m gonna tell you what’s what … you do all of the work, you do marketing,
and everything is sailing along great, and in what seems like 5 seconds, it all
turns to shit in your hands cuz somebody at the brokerage house or scumbag
LP banks, has decided “you know what? … we’re giving to great a deal to these
clients of ours, and we need to make more money, so we’ll program into the mix
some BS bid/offer spreads and add some slippage on fills … that’ll increase out
bottom line like 20%, and we’ll just put up with the client bullshit complaints and
use the SOP [standard operating procedure], “duh, market conditions, duh”! line
of horseshit every single time you point out to them the ‘scumbaggery” that’s
going on.
On the other hand, in this “shifting sands” universe we’re all in whether we like it
or not, there can be extremely positive changes as well … as a perfect example,
none more than Turnkey since the start of the year … longtime readers know I
hold no quarter or play favorites when it comes to brokerage houses, and if they
deserve scorn and derision, I’m perfectly willing to dish up a heavy dose right
into their face … I don’t ask for perfection, all I ask for is “fair” and not to be
taken advantage of by the scumbag LP banks … make a legit market and nobody
complains and everybody wins … fill me off the market with horseshit fills and
then try and paper it over with “duh, market conditions, duh”!, and you & I are
gonna have problems.
I understand fully the perils & pitfalls of running an offshore brokerage house
… I understand the partners get treated by the banks like we do, which is
“STFU & trade” … they are caught in the middle, but this is the biz you chose to
be in so deal with it … nobody EVER is going to get a fill changed from the bank
… EVER … they will never admit fault, and they will never change a fill … and in
order to get satisfaction from getting hosed by them, you’d better have some
very deep pockets for the legal bills and some time to kill, cuz it’s gonna be time
consuming and super expensive … gonna sue them over a DOW30 fill 5 points
off the market that maybe cost you $15 - $25 dollars? … hell no you aren’t, and
you maybe think they don’t know this?
But, back to Turnkey … as I said yesterday, their managing partner reached out to
me after the Holidays and we had some very good “discussions” … for whatever
the reason(s), I think Turnkey has “turned the corner” … and I think they realize
[finally], or have new people who realize it, that in order to maximize revenues &
profitability, 2 things have to happen; 1) cut costs brutally across the board,
especially with banks [lower access fees & using crypto for deposit / withdrawal],
and 2) provide the very best tier 1 LP’s for fills so clients are happy and biz
increases over time … you do these 2 things and good things will happen to
your business … don’t do either or both, and go sell movie tickets or something
cuz you’re gonna get run over! … now for the first time, I have direct access 24/7
to the man in charge … he knows who I am, he knows I was a “big hitter” in the
SP500 futures market back in the day, he knows I wrote a book, & he knows what
I want and expect from him and his firm … “give me the truth with no bullshit … I
can handle and deal with honest information, but dishonest info hurts us both, so
don’t fucking do it! … I want “fair”, and he wants increased biz flowing into
Turnkey … well, it’s simple … give people fair and the rest takes care of itself”.
On the other hand, yesterday sees the “same old same old” tried & true bullshit
ANY brokerage house will dredge up when confronted with evidence of
“scumbaggery” on the part of their pricing and fills, and so it was with FX
CHOICE yesterday in the DOW30 CFD … they know they’re lying, I know they’re
lying, and they know that I know they’re lying, but this is “the game” they all play,
cuz what do you expect them to do, admit they fucked you blind! … sorry, that
ain’t ever gonna happen. So, it remains to be seen what today brings here in a
few hours when the sun comes up and the NYSE opens.
I want people to understand, that I have no animus towards any brokerage
house … it’s simply a function of being treated fairly … treat me and my clients
like dog shit, and expect me to not be nice … treat us fairly and give us good
spreads with low RT commissions and nobody has any problems and everybody
wins … change your culture and/or habits and remain in our “good grace” by
doing what you’re supposed to be doing, and I’m as nice and easy to get along
with as your Grandma at Sunday church service … like Vito Corleone says, “it’s
business, nothing personal, just business”.
Well now, that escalated quickly to the downside, didn’t it? … made ZERO sense
for the DOW30 to rally off the open, but when you put into context of scumbag
bank positioning, it all makes sense … in any event, news flow about our favorite
“fruit company” maybe suffering 50% loss of iphone sales in China this quarter,
coupled with brand spanking new virus case outside of China exploding,
specifically South Korea & Iran, and how many elephants can go through the
exit door at the same time without bringing the wall and half the building down?
… short answer, none.
And so, thanks to the Twits at the FED, who’ve done nothing but run the
CNTRL-P machine full tilt since October 1, and have suppressed VIX and allowed
a straight up climb, especially in the NDX100, we get the very thing they try and
suppress … namely, plenty of volatility due to their hubris & stupidity … the fall
only hurts when you reach the bottom.
If you’re keeping score at home, that was about a 400 index point drop in 30
minutes … straight down, no prisoners, and if you tried to pick the bottom,
you’re already in the morgue … and at the bottom a very nice 100+ point range
M1, where on every platform I had up, the bid/offer spread was somewhere
between 10 and 30 index points and moving at the speed of light … no way
anybody could have gotten a “fair” fill down there no matter what you did … and
when you see this serious negative news flow, especially after the huge runup
lately, you just back away and let it do its thing, and keep your fingers away from
the order tickets.
No respite from the bullshit seen yesterday at FX CHOICE … today even worse,
and that’s before the big selloff! … directly below, 2 different order tickets about
30 minutes apart from FX CHOICE.
“Nothing to see here Sheeple, move along” … look closely and you can see the
spikes out to 5, 6, even 7 index points followed by the immediate snap back
… “oh, did you click the sell button and got filled at the low “mystery tick”?
… duh, market conditions, duh!
Meanwhile, at Turnkey during the same time frame as the second order box
above, directly below their order box … see any “scumbaggery” here?
above, directly below their order box … see any “scumbaggery” here?
You’d have to be blind not to see the difference between the 2 houses … all of
which led me to “reach out” to FX CHOICE and demand an explanation, cuz I got
one they won’t like or admit to, and that is the bank LP’s don’t like to get picked
off and have “scalpers” make money off of them … hence the bullshit “mystery
ticks” … and sure enough, all they did was piss me off, although they’re
switching me to another live server to see if that helps … and as I told them, it
had better, or your biz dries up cuz I’m not putting up with this bullshit … so,
we’ll see tomorrow.
Moving to trading action, you know there are going to be problems when the M1
ranges are averaging 30 - 50 index points, and we had one M1 today at the
bottom that was about 120 index points … try and trade this and you’re begging
to lose money … the banks will simply not make a fair & honest market when
volumes explode and liquidity dries up, and as a result spreads explode and
slippage is guaranteed with your fill … you literally have to be absolutely perfect
in order execution in getting in AND OUT, cuz miss on either and it’s a bloodbath.
After the morning massacre, the “Plunge Protection Team” [PPT] in the market
I’ve seen 4 times, but as soon as they finish it’s right back down quickly … like I
said it’s perfect execution or you’re toast … now here at about 1 PM EST, the
DOW30 is melting up cuz “fun-durr-mentals”, as the PPT no doubt flexing their
muscle and wasting some more newly minted cash … what a fucking joke.
Before SHTF this morning, one algo buy signal in the DOW30 … the TURNKEY
PAMM / MAM UP 0.1% … there were no trades for the FX CHOICE PAMM / MAM.
We’ll see if the other server works at FX CHOICE or if its bullshit … will report
tomorrow. Today one of those days, once SHTF and the 30 minute bear market
exploded onto the scene, to leave alone and not get ripped to shreds on some
serious mystery ticks. Plenty of times today, the DOW30 has gone up/down
20 - 30 points in a heartbeat, and even if you had a profit, you wouldn’t know until
you clicked the button, closed your eyes, uttered a prayer, and then peeked at the
fill … and who knows what that might be, cuz the chance for “ugly” today is off
the charts … and the time it took me to type the last few words, the DOW30 has
just gone down 40 points … and quite frankly despite the PPT, tomorrow’s
another Friday with the weekend coming up and a virus exploding around the
world now … if we start going lower tomorrow, who wants to go home with
losses into the weekend, holding sky high tech stocks, with a virus on the loose
in Japan, Africa, South Korea & Iran … oh sure, they’ll contain it … right … uh
huh, sure they will.
Since the start of the year, Turnkey’s DOW30 market has exhibited very stable
pricing in the off hours away from the NYSE … last night for instance, the spread
was 2 points throughout the night, sometimes going to 1 point … granted, like
everybody else there have been very brief instances where the spread has gotten
“fat” for no reason ...however unlike before, it hasn’t stayed there for 3 days to a
week, and instead come back in minutes if not seconds … quite frankly, it trades
better at night than it does during the NYSE day … the news flow out of Japan,
South Korea, & China tonight will be interesting to say the least … I think what
traders will focus on is Beijing, and outside of China have cases exploded … not
so much anymore with Wuhan or Hubei province … any really good news on
containment, cases dropping, and/or lower death rates and watch this stuff
explode higher.
… until tomorrow mi amigos … Onward & Upward!!
Have a great day everybody!
-vegas
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