Holy cow! … “I just got a visit from Santa!” … I just knew good things would
happen when I put our head of security for the -vegas team, Butch
[Oswald Winthorp Turkington III, a/k/a “Butch”], on the task of getting Turnkey
off the snide and “with the program”, and bring crypto to the PAMM / MAM
… and after a couple dozen trips to the mall to sit on Santa’s lap for an extended
period [sorry Butch, I can’t give legal advice], BUTCH DELIVERS!!
Why yes, you do get a “candy cane” Butch! … and lo & behold starting today,
Turnkey has upgraded their MT4 platform to include 1) Crypto [4 pairs: Bitcoin,
Ethereum, Ripple, & Litecoin], 2) more gold pairs, now adding XAUEUR &
XAUAUD, 3) ANOTHER SILVER PAIR IN XAGAUD, 4) natural gas, and 5) a new
stock index the HKD50, which is the Hang Seng 50 out of Hong Kong [one of my
favorite indices of all time!]
I’m simply “giddy” with excitement here, cuz I’ve been banging the frickin’ table
for months on end now imploring management to add crypto, and get a new
Hang Seng index … and like most offshore brokerage houses, I’m the last guy to
know when SHTF … that they are very tight lipped about anything is an
understatement! … but OK, so I’m the last one to get the email … don’t care, it’s
finally here and WE CAN TRADE CRYPTO!
However, before I rip my clothes off and run naked down the street with
excitement [I promise pics if it happens], I’m gonna need to see what happens
in Bitcoin [BTCUSD] [along with the others as well] with the bid/offer spread
when things go “nutso”, and any or all of ‘em go bananas to the upside or
downside … I will remind you, that when PayPal announced accepting BTC, and
BTC exploded to the upside in seconds, I was on the COINEXX trading platform,
where their BTC spread ballooned out to $75 - $100! … not knowing what the
hell was going on, it didn’t make any difference if you were long or short, what
do you do with a bid/offer spread of $100 besides pray that it comes in? … well,
for one thing you swear a lot, but other than that it’s a no win situation … so,
we’ll see if spreads can be maintained or not … the other thing of critical
importance, is if … and it’s a very big “IF”! … if spreads can be maintained with
what I’m seeing here of around $2 - $5 in BTCUSD [slightly higher with nutso
conditions, & slightly lower when things settle down], unlike perpetual contracts
that never expire and have rollover every 8 hours [00:00, 08:00, 16:00 UTC], and
also have “maker” [limit orders] & “taker” [market orders] fees based on the
notional value of Bitcoin, here RT commissions are simply $2 per 1 lot volume,
where a “1 lot” is 1 BTC … and this is the pro rata rate down to 0.01 volume lot,
the minimum trade amount on the system.
And when it comes to BTC, right now unless you trade about $1 Billion dollars of
BTC a month OR MOAR!, “taker” fees are a minimum of 0.05%, and could be as
high as 0.15% at some houses … PHEMEX is at 0.075% for a “taker” fee, cuz
“makers” get a REBATE of 0.025% … do the math here Skippy … with BTC at
around 20K per 1 BTC, the “taker” fee comes to $15, and that’s per side, so a
round turn trade at PHEMEX taking market orders on both sides comes to $30!
… well guess what kids? … sorry, I don’t want to trade if my cost per 1 lot is $30,
PLUS the spread, and I haven’t factored in slippage either, which if things get
insane [normal lately], means I could be paying a helluva lot more than $30 per
trade … and that’s why, “IF” the spread can stay somewhat stable at Turnkey,
adding $2 per RT commission per 1 lot BTC isn’t any big deal at all … with the
way BTC trades, a total cost of $5 - $7 is right on par with CME futures in BTC,
and is about as reasonable as your gonna get at the retail level.
As I hinted yesterday in the blog, the problem when you got “maker” & “taker”
fees isn’t getting in a position, it’s getting out that’s the problem … here’s why
… let’s say you get long 1 BTC at 19000 … it goes immediately up to 19070 … you
put a limit order in to sell at 19071 & want to take profits here … the market says,
“sorry Chump not today!”, and not only does nobody take your offer @71, BTC
starts going down … 70 … 60 … 40 … 20 … and continues straight down another
100 dollars to 18900, where you throw the towel in and puke the long at the
market … so, you had a profit going, but unless you wanted to pay $15 getting
out, you kept lowering your offer but nobody would buy it … a profit turns into a
loss, and you lose $100 on the trade, and are pissed off to no end … and this is
where the computer or phone ends up in the ocean … but no, you lost $115, not
$100 cuz you had that “taker” fee … if you got in at the market, you’re out $130
… so, bottom line is “taker” fees added 30% to your loss.
On the other hand, if Turnkey can keep the spread stable, you could have gotten
in when you wanted, AND OUT WHEN YOU WANTED, paid a $2 commission, and
didn’t let the market leave you hanging when it didn’t hit your limit price … here,
when it hit 70 BID, you could have simply hit the liquidate position button and
gotten filled somewhere around 70, maybe down to 67 or 68 … but who cares,
cuz look at the alternative I laid out above … and so what I mean when I say BTC
is “untradeable” over at PHEMEX, is the scenario I just laid out … cuz the way
BTC is acting now, if the market misses your limit order to get out and starts
heading the other way, you either pay a very heavy price going market, or you pay
the “panic price” latter and puke and are pissed off … cuz I got a NEWS FLASH:
“you can’t pay $30 to trade BTC per 1 BTC … the market will grind you down to
dust faster than a Las Vegas casino where you’re pumping cash into a slot
machine”!
And since I’m talkin’ crypto here, I’m pretty sure one or several of the very big
offshore HFT’s are the LP’s making the market … their pricing power, their
hundreds of billions in AUM [assets under management], their state of the art
networks [fastest on Earth], and their links to the largest cash exchanges for
hedging, gives them the edge they need to provide a market for us and still make
a profit … which is fine with me … “market making” is great when things are
normal, but “normal” doesn’t exist in crypto, especially Bitcoin, where it seems
SHTF about every 2 minutes around the clock … there just isn’t any way possible
to make any kind of market, or expect your limit order to be taken by anybody,
when M1’s are moving with ranges of $50 - $100+, and yesterday saw an M1 of
$800, and several around the $400 range … WTF? … no, you absolutely need the
ability to do market orders when the occasion arises, whether it’s getting in, or
getting out, and paying $30 in my book is ridiculous … so far what I’ve seen
today in BTC, it’s still “bat shit crazy” but the IVIX INDEX levels are down from
the 500+ stratosphere yesterday, and as I write here early in the day, hovering
around the 250 area … so, all you’re talkin’ about here is different levels of
insanity … and if this is now defined as “slow”, well then it gets really messy if
you can’t hit the market button when you want to without handing your wallet
over to somebody else … simple as that … so, I like what I see so far … and for
the PAMM / MAM, this is great news indeed, cuz finally we can trade a
FREE MARKET!
One item of note about BTC at Turnkey … it’s open from Sunday night to Friday
afternoon, and doesn’t close, but it closes for the weekend so there’s no
Saturday or Sunday trading … not a very big deal IMHO … also, the “vig” only
comes once a day, 6 PM EST [New York], or 5 PM EDST [daylight savings time
New York when appropriate], with 3 day “vig” if you hold it over the weekend
… and current “vig” is expensive, about $45 per day per 1 BTC … what these
terms & rates tell me, is that the HFT’s are making this available for you to
“trade” not position, and with 10X leverage for crypto, this is plenty to chew on
for trading these markets … they pass on these spreads cuz they create more
trading activity, and they make money on every single trade people make … sure,
most of the time it’s pennies, but multiply that by hundreds of thousands of
trades, if not multi millions of trades, spread out over millions of customers
every day … we should all be so lucky to get these “pennies”!
Ok, so after I got the algorithm code put onto the MT4 for BTCUSD, I already had
some funds in an account at Turnkey, and gave the BTCUSD market a spin, to see
what latency on fills is/was like, any slippage issues, and what I saw I very much
liked, cuz I had no problems … this is very good news, cuz it means that starting
tomorrow, I’ll more than likely be EXCLUSIVELY trading BTCUSD for the
PAMM / MAM … during this time there were multiple $200 - $400+ moves over
7 - 30 minutes, and 1) the bid/offer spread did NOT blow out, fluctuating most
of the time between $5 - $8, with occasional blimps to low teens on vicious spikes
up/down … and when that MOMO slowed down, the spread quickly came into
the $3 - $5 range … so, PAMM / MAM participants, get ready for some
“Hoover Dam” time profits, cuz in this market there’s ample opportunity for
gains!
Well, this makes everything else today almost “Hoover Dam” unimportant! … I’m
gonna put off ‘til tomorrow my scheduled blog subject today, which was dealing
with BTC over at PHEMEX for “The Syndicate” … meanwhile, over at the old folks
home for retarded FX pairs, EURUSD kciking up some activity yesterday, like it
crawled outta bed and put on some dancing shoes … about frickin’ time! … today
so far, not so much … maybe needs another bottle of Ensure or somethin’ … still a
long ways to go for the day though … well, Europe closed now and we end up
with another shit range day in EURUSD of only 68 PIPS, with all of that coming
in the European session with a double reversal from high to new low to new high,
and then back off into the close … unless this old fart market picks up
dramatically going forward, while at the same time Bitcoin slows down
dramatically, it’s gonna be a long time before it sees us again … we’re on to much
greener pastures of opportunity over in crypto … remember also, there’s
Ethereum & Ripple as well, but with Bitcoin flying there’s no need to search
further … seriously, if Bitcoin can’t give you what you want, then there isn’t
anything else that’s gonna fill that bill for you.
No trades today for “The Syndicate” today over at PHEMEX … conditions way
too “bat shit crazy” for limit orders … IVIX INDEX levels today in BTCUSD running
at 400 on the low side to as high as 850 a few times when the market ran multiple
hundreds of dollars within seconds & minutes, both up & down … when this
puppy runs, it doesn’t fart around!
Algorithm signal trades today in EURUSD … TURNKEY PAMM / MAM UP
SLIGHTLY LESS THAN 0.1%
Last issue for today, is the fact that there’s no “order book” platform for trading
Bitcoin at Turnkey … quite frankly, if the HFT’s operate in the future like they did
today, and make no mistake this is not Grandma’s market of slow moving
molasses, then there’s no need for an open “order book” .. cuz comparing the 2
houses today, PHEMEX & TURNKEY in BTCUSD, there’s no question TURNKEY
offers a better OVERALL trade, simply cuz given current and most likely future
conditions in Bitcoin, you have a tall order if you think your limit orders are going
to get filled when M1’s are moving $40+ per minute up/down… you don’t just
need to be perfect on one side, you need to be perfect on both the buy/sell &
liquidate order tickets … if you have to pay the taker fee in a market that is
screaming against you, it isn’t gonna make any difference what house you’re at,
you're toast!
Well YES!!! … finally got FREE MARKETS! … and PAMM / MAM participants will
start noticing the difference starting tomorrow … I’m like the kid who just got a
new puppy under the tree … and if you can’t get excited about that, then there’s
no help for you … until tomorrow … Onward & Upward!!
-vegas
