In today’s blog update I’m gonna lay out the very real challenges ALL traders
face today, and it’s not a pretty picture … nobody talks about it, you won’t see it
written about anywhere else but here, and the sycophant financial MSM wouldn’t
touch it with a ten foot pole … it goes against the propaganda of “fair” markets
[cough, bullshit, cough], which if the public ever figured it out there’d be a true
revolution … but most Sheeple don’t like upsetting, uncomfortable things that
strip away the bullshit and really expose the “trading matrix” for what it mostly
is … ignorance & stupidity are powerful drugs! … and that purpose is to mug,
rob, rape, & pillage investment / trading accounts, and then get you to believe it
was all random and that’s just the way the cookie crumbles … you lose, and
banks and/or HFT’s win and skim via offshore entities that don’t show up on the
books for payouts to POLS, Apparatchiks, & regulators … the challenges are
REAL, and they all lie just under the surface, out of sight to most, and certainly
NOT up for discussion … first up are the MT4 / MT5 platforms, along with
proprietary web platforms that utilize “liquidity providers” [LP’s] to provide
bid / offer quotes and ALL fills for trading purposes … “liquidity provider”?
… this is the biggest oxymoron running, right along with “honest lawyer”,
“military intelligence”, and “hi, I’m from the government, and I’m here to
help”! … quite frankly, they are simply petty thieves … and then secondly I’ll
cover the “open order book” [OOB] crypto trading platforms and the very
real problems there.
There are some big issues on the MT4 / MT5, or other proprietary platforms
… 1) “limit” orders to buy / sell are not in fact limit orders, they are “market if
touched” [MIT] orders … this makes everything you do a market order, thus
ensuring they can fill you anywhere they want on every order … potential
slippage in & out, and along with the spread you have to overcome to see a
profit, this is a “hidden tax” on your trades that you pay and they book … and
too often it’s not a trivial amount … 2) ZERO TRANSPARENCY on whether or
not the ACTUAL market bid / offer is reflected in any LP bid / offer, and how
much are you stealing by filling me away from the actual market? … usually it’s
pennies or maybe a buck or two, like being charged by a scumbag bank for an
ATM withdrawal … but how do you know? … in actuality, they can fill any order
anywhere they want, and are NOT held to anything! … 3) “bait & switch”
bid / offers, especially on CFD’s … they market this “variable spread” horseshit
as an advantage for the client, and in theory it could be … in practice it allows
them to steal MOAR! … one second the oil spread is 5 cents the next second
it’s 2 cents … PUT AN ORDER IN AND SEE IF YOU GET 2 CENTS!
… BWAHAHAHA! … the scumbag LP’s will scream as their M.O.,
“DUH!, market conditions, DUH!”, 100% of the time and that’s the end of the
discussion … and what makes this especially egregious is when it happens
and nothing is happening in the market to justify their bullshit … and 4) you have
no recourse for their criminal behavior … NONE! … get angry and switch
houses? … the next house uses the SAME LP’s! … you’ve gained nothing.
While it’s impossible to prove this, cuz offshore brokerage houses for the most
part are 1) private companies with zero oversight, and 2) operate in jurisdictions
that make it impossible to get information, I’m pretty sure the vast majority of
them get paid by HFT’s for their clients account information … Yup, just like
Citadel paying RobinHood $90 million dollars per year to have all customer info
about their trading … size of account, what they trade, how they trade, where
they put their stops, etc. … and it wasn’t until RobinHood filed to be a public
company and had to disclose this, that the trading public went bat shit crazy
[BSC] with anger … so, you have to assume they do this, and the bigger your
account the more they pay attention to it … which means by extension & logic,
that the vast majority of orders for any market go to one or two “favorite” LP’s,
and NOT to this large group of “Tier 1” LP’s, which is a fantasy myth.
Fact is, you have to assume the LP or group of LP’s filling orders is in fact a
“market maker”, trading their own book and if it’s convenient for them they’ll
provide liquidity for an order AT A PRICE … and if it isn’t convenient for them,
cuz they don’t really want to fill you cuz it goes against their book, you’ll get
GUARANTEED SLIPPAGE AND A SHIT FILL OFF THE MARKET … you could
get this anyway, but if you want a “guarantee”, this is it!
And the more volatile a market or group of markets, the worse the conditions
and issues above become … for starters, anything in crypto when it moves, and
you’ll see the above issues come to the fore immediately … only an idiot would
trade crypto, specifically BTC & ETH at Turnkey or any other LP based platform
… bigger rip offs you will never find in any other group of markets!
Now, I’ll move over to the OOB platforms … the biggest issue here are
commissions [a/k/a “gas fees”], cuz every trade goes onto the blockchain as a
matter of record, and that costs money … some houses, like PHEMEX and others,
have a rebate of -0.025% on “limit orders” [maker], and 0.075% on market orders
[taker] in perpetual futures … other houses [most in the space] charge 0.05% on
both maker & taker orders … and still others have sliding discounts based on
trading volumes per 30 days … do 2 market orders at PHEMEX and you’ll pay
0.15%, and with BTC at about $40,000, that’s a commission of $60! … frickin’
OUCH! … do 2 limit orders and they pay you $20 … that’s all well and good
when crypto is “normal” bat shit crazy [BSC], but if it goes up some levels to
extreme “nutso”, or goes DEAD and VIX drops, you’re gonna discover 2 VERY
BIG ISSUES FACING YOU.
#1 … when crypto goes wild beyond normal, your ability to do limit orders and get
filled in your profit direction, GOES RIGHT DOWN THE RAT HOLE … you won’t
get filled … meaning if you go market, the next microsecond bid / offer might be
hundreds of dollars away from where you thought it was just 1 second ago [BTC],
or if you’re trading ETH it could be multiple dozens of dollars away … and there
you are, with a complete shit fill … and the problem only mounts from there, cuz
even if it goes in your profit direction, if you put a limit in to sell [assuming you
bought], what happens if BTC goes right up to your limit and then drops $500 in
the next 2 minutes, and you’re frantically chasing it down with lower limit sells
and nobody but nobody is buying from you? … now you have to go market to
get the liquidation, and you’ve just poured gas on the fire you’re immolating
yourself in … nice profit one second, painful “pissed off” loss the next.
Or, consider when it’s DEAD … who’s gonna reach to take your limit order if the
market isn’t moving? … you ain’t the only one who knows “gas fees” are high, so
why would anybody reach for your limit order in a dead market … and here again,
you can’t get your orders off! … and in the lower VIX coins, which is everything
else besides BTC, this is a very real problem you don’t even see just looking at
a chart and assuming orders can be gotten off at your convenience … they can’t
and don’t! … orders only get filled in crypto when somebody thinks it’s gonna
move and THEY’RE WILLING TO EAT THE GAS FEES to give to you, either out
of fear or greed … this is how crypto works at its most basic level … over on the
MT4 / MT5, this isn’t a problem cuz usually RT commissions are very low, and
while you may not like the fill, wait ‘till you get “stuffed” on a crypto order and
discover the gas fees you just paid … it’s a very big & real problem.
#2 … We’ve only been in the new year a week, and there has been an insidious
change in the crypto houses [ALL of ‘em] that I very much dislike and quite
frankly, IMHO smells of manipulation of the highest order.
Yes, we all know crypto is volatile … more volatile than any other space in
trading … and since the OOB platforms are P2P [peer-to-peer], a brokerage
house has to make sure that all sides to a trade have the money in their account
to eat losses, otherwise the winner of the trade is gonna not get his full dollar
profit … and if that happened even once, it would be the last day of trading for
that house cuz everybody would leave immediately … from a practical trading
perspective, that means when you open a crypto position [long or short], on
your OOB platform is gonna be what’s known as a “liquidation price” … this is
the price, that should your position go against you, the house computer will
automatically close your position and you got no say in the matter … and what
irks me to no end, is that no matter the size of your equity balance versus the
size of the trade, they’re gonna close it out cuz they aren’t gonna let you stay
in a position [no matter the size] that’s going against you and is a loser … let
me give you an example … you got $10,000 in your account … you go in and
buy $100 worth of Bitcoin … and you bought BTC at 41,800 … remember, $100
worth, with 10K in the account … BTC could go to fucking ZERO, and all you
would lose is $100 … but the house has your “liquidation price” at 41,590
… meaning, if the price of BTC falls $210 and trades at 41,590 or anywhere
below, the computer liquidates your position!
Well now, this opens up a whole “can of worms” on the OOB that smells of
bullshit … specifically, which group of liquidity providers on the OOB stand
ready, willing, and able to buy client “liquidations” and then bid the shit out of
BTC and spike it higher for quick & vast profit? … and I saw this last week in
spades, especially that time that saw BTC rally $1,000 in one M1!! … get caught
in this horseshit long or short, and my only question for you is, “feel
manipulated yet”? … the house counters this by saying that “liquidations” are
“gas fee” free, meaning there’s no commission, so you’re free to buy [sell]
again and establish a new position … MY RESPONSE: “this ain’t the way 99%
of the time this happens … cuz whether it’s killing longs in a liquidation and the
market immediately jumps “bigly & yuge”, or it’s killing shorts in a liquidation
and the market immediately goes tapioca ‘bigly & yuge” your clients are getting
screwed royally by LP’s who have the money and wherewithal to swing markets
in BTC to “get” these liquidations" … my question to you, Mr. Brokerage House,
is whether or not you provide customer information to these LP’s for a hefty fee,
OR get a cut of the ill gotten loot? … my guess is BOTH! … and quite frankly, as
I’ve seen this happen numerous times last week in BTC, I’ve backed out of that
market and refuse to trade it, simply cuz $210 thresholds for BTC are nothing!
… and they are gonna catch you and screw you! … ETH is better, but not by
much … this is a development in the crypto space that could become a real
account killer, and it’s 150% pure bullshit, put into effect to enrich OOB LP’s at
spec expense … this is not a positive development, and what it really says is
that the “whales” want MOAR! … “give me ALL of that spec money”!
Turning to markets this week, I’d be remiss if I left out “Stock Bellies” from last
Thursday & Friday … as I said in a blog last week, the “Plunge Protection Team”
[PPT] is gonna be working overtime to keep the “Spoos” above 4500, a level right
now that isn’t in danger … and the fight between 4500 - 4700 is gonna be filled
with PPT exploits that would make the Mafia blush … the real loser in the race to
raise rates and go “QT” [tightening] is the NDX100 … the DOW30 is mostly beta
neutral, so it should roughly go in line with the SP500 … Friday saw 4 PPT
attempts to “pump” “Stonks” and kill shorts … in an “88/6/6” paradigm of trading
[88% of the time indices go UP, 6% of the time indices go sideways, and 6% of
the time indices go DOWN “bigly & yuge”], when there’s no “bigly & yuge”
surprises that threaten either the economic outlook or a group of market
heavyweights [e.g., AMZN or AAPL], and we’re NOT in the back “6” of the
paradigm based on either super sized ranges to the downside or big losses of
1% - 1 ½%+, it’s gonna be a real chore to stay short and make money from the
short side of “Stock Bellies”, cuz the PPT is gonna go after you and your
short position.
Since I’ve adapted the crypto algo for “Spoos”, DOW30, gold, & oil [these are the
only 4 cuz they’re volatile enough consistently to trade on the MT4 for the PAMM],
there haven’t been any decent sized down days in either the “Spoos” or the
DOW30 for me to watch & observe in real time with the algorithm … as I’ve said
many times, you can’t simply just back test and make any valid conclusions cuz
you aren’t watching it in “real time” for issues that back testing won’t show when
looking at it … the VERY REAL ADVANTAGES TO TRADING “STOCK BELLIES”,
is first and foremost that U.S. Indices most definitely trade in the “88/6/6”
paradigm, something which no other group of markets, either traditional or
crypto, can say … not even close! … and that means, unless there’s a very good
and well known issue, you’re NUTS for trading any of the “Stock Bellies” from
the short side on a consistent basis.
There are houses that have a decent NDX100 CFD for trading … however, they
aren’t open to U.S. people, and are KYC … unfortunately, Turnkey can’t seem to
find any LP that isn’t horrible … the issue is slippage, even on the smallest of
orders … meanwhile their SP500 & for the most part DOW30 are very good to
excellent … not all the time, cuz they have their moments, but you’ll find that
anywhere, so it’s not just specific to Turnkey.
Given the rate environment we’re in right now, it’s gonna be a big problem for
gold to rally … and if by chance inflation cools at all, gold is gonna get “monkey
hammered” in an environment of rising rates … and while it’s on my trading list,
it’s at the bottom up & until the rate environment gets a lot clearer OR inflation
gets plenty worse than it already is … the market is basically “stuck in mud”.
The problem in oil is specific to Turnkey … the “Hoover Dam” spread goes in &
out like squirrel farts in the wind … add to that, oil is a lot like crypto when it
falls, meaning stops get wiped out violently … but unlike crypto, after the
violence there’s little left to trade going forward without a lot of waiting for the
next decent move … I like oil as a trading market … I don’t particularly like the
way Turnkey offers it.
Back to “Stock Bellies” … over this weekend, giving a close eye to everything
good & bad about each market, meaning “Spoos” versus DOW30, the
undeniable objective conclusion is the DOW30 is the better overall trading
vehicle, whether scalping or day trading … it’s biggest advantages are
1) LOWER consistent relative spread, 2) LOWER relative slippage on fills, 3) ease
with which the DOW30 index escapes the spread even when conditions are slow
… it’s simply better than the “Spoos”, and 4) clearer and “more pure” algorithm
buy signals, where when rats panic they overshoot more than the “Spoos”,
meaning buy fuel is more pronounced and reflected in price … going forward
into this week, the DOW30 becomes my first trading choice for the PAMM, and
given the environment we’re in right now, there will be no lack of price or VIX
action … and relative to the other markets of gold & oil, it will offer better and
more algorithm trades … of course, I could be wrong about this, but if “Stock
Bellies” languish, how does that get either gold or oil moving?
As for crypto and “The Syndicate”, I’ll be watching how ETH behaves relative to
“liquidation points” that have somehow become “standard” among a whole
group of the biggest houses, which smacks of “collusion” among whale LP’s
… I may have to move to another alt-coin, one which trades well and has good
volume & liquidity but is much harder to hit liquidation points unless the whole
space is going to Hell … we’ll see how it develops throughout the week.
These LP’s and “whales” never stop coming up with ways to “rig the game” in
their favor … however, what they aren’t counting on are guys like me, who stay
one step ahead of them and refuse to play on their field … if ANYTHING IN ANY
MARKET LOOKS SUSPICIOUS, I can guarantee you it’s LP or “whale” induced to
give them more money at spec expense … the “Big Lie” is that it’s all random
and everybody has a fair shot … that’s bullshit and always has been … how
would new generations of traders / investors come into trading if they didn’t
believe in the lie? … it must be preserved at all costs, cuz without the “skim”
from markets, the poor POLS, Apparatchiks, & regulators wouldn’t know how to
send their kids & mistresses to alcohol / drug treatment centers, buy them
“Lambos”, or give them their 10K allowances per week to “survive” … how
would the poor dears survive? … why do you think PATREON threw me off
their platform? ... to them, pornographers, drug dealers, thugs & perverts of all
descriptions are just fine, but write and talk about how corrupt the U.S.
financial system is, and we can’t have that cuz the truth sends some to their
“safe space” to suck their thumb and cry … welcome to the “U.S. of China”!
In any event, now that I’m off my soapbox, going forward IMHO we’re apt to see
more “tradeable” “Stock Bellies” markets, although all bets are off for the
NASDAQ high fliers, cuz anything can happen there, especially if rates do go
significantly higher … in that case, there will be massive rotation out of tech
and into the DOW30 & SP500, especially financials like JPM & Squid … quite
frankly, I don’t care the level of any of these indices, ONLY their ability to remain
relatively volatile and “trade” up / down … and in this present environment that
looks to be the most likely scenario going forward … in other words, alternating
“risk on / risk off” [RORO] days, rather than straight up or down for weeks on
end with shit ranges.
And before I forget, directly below the 20 Day Range MA’s for selected markets.
Starting now in 2022, I’ve included the DOW30 to the list.
This last week has seen Priscilla The Trading Gorilla [PTTG] get sick with the
flu … don’t know if it’s the Omicron variety or what, but talking with her on the
phone she’s pretty miserable with the usual symptoms of achy body and a slight
fever, while feeling like crap … so, quite naturally, she didn’t do any trading this
past week in anything crypto … given that, next Sunday’s blog update will have
charts for performance and we’ll go from there.
… outta here … “The future’s so bright I need sunglasses”!! 😎
… Onward & Upward!
-vegas
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