SUNDAY UPDATE: HIGHLIGHTING THE TRADING ALGORITHM

 

“The “magic” is in the code to beat the scumbag manipulator banks!”

Before I get into it, a little bookkeeping for the week ahead. Directly below the

20 Day Range MA’s for selected pairs.

click on table to enlarge

A few things to take note of from the table … 1) I’ve included GBPJPY & EURJPY

starting with Q2, 2) I’ve deleted 2 crypto pairs, Solana [SOLUSD] & Polkadot

[DOTUSD … the crypto alt-coins have completely dried up, and while there are

still price swings, volumes & liquidity are terrible … and when I say terrible, I

mean literally TERRIBLE, to the point there are no offers on the way up and no

bids on the way down except for a few coins … if you tried to trade volume, you’d

get killed on fills, so why continue to follow them … 2) Remember when

Preezy Idiot Boy stated that he would turn the Ruble into rubble with sanctions,

and then chuckled and gloated about it? … who’s laughing now Dumb Ass, cuz

it ain’t Vlad? … but of course, this comes from Biden, so like everything else he

has ever predicted about anything, the Russian Ruble is as strong as it’s been

in over a decade! 

The trading algorithm is gonna be released next Monday [Memorial Day], May

30th, sometime in the morning … everybody will be able to download the Adobe

PDF from “Download Links” … IT’S FREE, AND COMES FROM MY SHARED FILE

FOLDER AT BOX.COM … no tricky gimmicks like wanting an email address, or

anything else … you can either read it online or download it to your device with

any PDF viewer … I’m doing this cuz it will have ZERO EFFECT on my trading,

and cuz there are so many markets to choose from … it has everything you need

to become profitable in whatever market you choose to trade on the MT4 … today

I want to highlight a few things.

First and foremost, COST OF TRADING [spread + any commissions if any]

MATTERS! … choose a high spread / high commission broker and attempt to

short term trade, and most assuredly they will eat you for lunch! … there are a

million places you can trade FX … overall, FX offers the best space to short term

trade … you want good VIX and LOW COST, and you want [can’t get it 100% of the

time] ZILCH TO LOW SLIPPAGE … and while you think this will be easy to

calculate and analyze, it isn’t … just from my experience at Turnkey, the 3 major

dollar pairs [EUR, GBP, JPY] are often “slippage machines” inside low ranges,

while the 2 crosses EURJPY & GBPJPY “usually” [not always that’s for “Hoover

Dam” sure] are very good to excellent in terms of spread AND slippage … on the

other hand, Turnkey is a literal NIGHTMARE in world stock indices … their quoted

spread is a frickin’ joke compared to your ultimate fill … meanwhile, SIMPLE FX is

about as good as it gets in spot gold [XAUUSD], CRUDE OIL, AND STOCK

INDICES, but very sub par in FX, and an outright disaster in anything crypto … I

recommend you first figure out what it is you wanna trade on the MT4, and then

demo some places to see which is the best … when you’re ready to go live, only

deposit a small amount of funds and trade very light … this is so you can gauge

how their spreads are moving and if you’re getting ripped off via slippage.

The trading algorithm is geared SOLELY TOWARDS SHORT TERM TRADING ON

THE M1 CANDLESTICK CHARTS … most likely your definition of “scalping” is

different than mine, ditto for the term “day trading” … as I stated, the trading

algorithm can be used in every MT4 market, but it is particularly suited and

developed for world stock indices & FX crosses … it can be used in metals &

energy, but IMHO IT DOESN’T WORK OPTIMALLY CUZ OF VERY LARGE

SLIPPAGE AT TIMES WHEN SHTF … and while SHTF can happen in any market,

causing large gaping price changes quickly, gold & crude oil certainly have their

overweight share of the carnage compared to stock indices and/or FX.

You can use the algorithm for both LONG / SHORT POSITIONS, it has no bias

either way … the manual covers both … however, I would simply mention that

U.S. stock indices, despite their current “Thelma & Louise” behavior for price

erosion, still operate in the “88/6/6” paradigm of trading, which heavily favors

long positions consistently more than short positions … having said that, pretty

much all of the YEN crosses to some extent are “risk on / risk off” [RORO]

proxies, the most obvious being AUDJPY, NZDJPY, EURJPY, and GBPJPY.

For example, this year [2022] there have been so far 99 trading days … 10 big UP

DAYS, 9 BIG DOWN DAYS, AND 81 DAYS OF “A little song, a little dance, a little

seltzer down your pants” in GBPJPY … well, for “risk off” [making a killing on

the short side], that’s roughly slightly higher than the back “6” of the stock

indices paradigm that goes back 30+ years! … but the algorithm shows you how

to deal with days like this, and what has to happen in order for that to occur.

Taking just GBPJPY, I’m looking for those opportunities that give me a very high

percentage probability of seeing either “buy fuel” [long position] or “sell fuel”

[short positions] show up in the market that yields a profitable trade IN THE

SHORTEST TIME POSSIBLE … that could be within a minute or two or it could be

much longer if the market runs without slowing down … once out, rinse repeat

the rest of your session … I’m not interested in “positioning” for longer time

periods cuz greed kills … in the documented history of my personal trading, I’ve

made millions from short term trading … and over the last several years, it’s been

a very big challenge dealing with 1) central bank manipulators that started in

earnest in January 2015 with the EURCHF debacle, that has resulted in the

manipulators going after VIX, 2) the entire BREXIT “shitshow circus” in Cable,

and 3) the absolute insanity of the BOJ in attempting to “massage” YEN

movements … then there’s the issues of insanely gyrating bid / offer spreads

ALONG WITH SLIPPAGE that the scumbag LP banks use to make sure you can’t

pick them off for profit … ESPECIALLY IN CFD’S! … and in this nightmare it

seems like it never fucking ends, the bullshit the banks throw at you from every

direction including the “bait & switch” horseshit Turnkey is infamous for [they

ain’t alone!].

This last week, watching markets in real time and analyzing the algorithms

performance, I noticed some “lags” I didn’t think were there, and so I made some

minor adjustments in key algorithm components, and statistically analyzed

“buy fuel” and “sell fuel” signal parameters … got rid of some “false positives”,

and more importantly zeroed in on the most profitable signals and concentrated

on them for analysis while cutting others that “didn’t make the cut” … no matter

which market you choose, there will be plentiful signals, and if you miss one or

don’t like the setup, simply wait for the next signal … it will be here a week from

Monday [tomorrow]!

Onto the week! … outta here  … “The future’s so bright I need sunglasses”!! 😎😎

… Onward & Upward!!

-vegas

SUNDAY UPDATE: EVERYTHING IS HIDING IN THE BASEMENT

“Ho hum … time to go meet my trading pair for the day!”

Before I get to crude oil today, some critical reminders … 1) IVIX INDEX levels are

a proprietary index of mine, created for the sole purpose of establishing M1

volatility from any M1 to the next M1 … 2) they are “snapshots” of the past

week’s action broken down into specific 4 hour intervals that match the 3 major

trading sessions of the world as they relate to trading and not necessarily the

hours of the day … 3) I created an index for 2 specific purposes, A) to measure

volatility from one M1 to the next to get an idea how volatile the market actually is

for scalping and/or short term trading and to compare that to different times of

the day, and B) to be able to make an “apples to apples” comparison between

markets and/or compare different market groups to each other … 4) IVIX INDEX

levels have no predictive value, other than when a market gets put into motion it

tends to stay in that motion until something stops it … and what stops it usually

is the end of the day or the start of a different 8 hour world session.

Directly below, this past week’s IVIX INDEX levels for first FX, and then below that

other key markets.

click on any table to enlarge

Bottom line is this … if your trading objective is to scalp and/or short term trade,

you have to be in a market or group of markets that consistently have 1) IVIX

INDEX values = to or > 60, 2) LOW “total cost of trading” via bid/offer spreads,

3) ZERO or very little slippage on fills, and 4) market(s) that actually trade and

don’t go in straight lines.

This last point is specific to your trading algorithm [or trading model], but I would

remind people that no matter how smart you are, how many math Ph. D’s you got

working for you, or how many millions of lines of computer code you’ve

developed, you DON’T GET ANYTHING FOR NOTHING IN TRADING

… EVERYTHING COMES WITH A PRICE TAG! … meaning of course, in order to

get something, you have to give something up, and you’re never going to have

your cake and eat it too! … “welcome to the trading basement mi amigo”!

Looking at the tables from last week, several things jump out at me … 1) the lack

of FX movement as the stock indices “go off the VIX rails”!, 2) when did the

DAX30 start taking meth?, and 3) outside of Cable [GBPUSD], the complete lack

of acceptable trading conditions in FX for the first half of the European session

… quite frankly it’s pathetic … looking at the other dollar pairs, you can’t help but

wonder WTF is going on here?

Some general observations about each group of markets in the IVIX INDEX tables.

FX

As I said, only Cable [GBPJPY & GBPCHF at times] did anything, and it didn’t help

us at all during the week cuz it went in straight lines, with Friday being particularly

galling … what makes it more amazing, is that the Yen crosses of EURJPY &

GBPJPY did almost ZERO as the stock indices tanked for two days in a row … so

much for the “risk on / risk off” bullshit we are submitted to almost daily by the

talking heads.

Over these last weeks, something really interesting is happening in FX in the major

dollar trading pairs, including specifically EURJPY & GBPJPY, at COINEXX &

TURNKEY … 1) bid/offer spreads have collapsed [good for us], 2) fill times on

market orders are faster [latency], AND 3) any significant slippage, outside of

maybe 1 or 2 tenths of a PIP has been eliminated [doubly good for us!] … the

PAMM / MAM is hosted at Turnkey, but COINEXX has a few pennies LOWER RT

commission rate … quite frankly this is amazing to me, and I’ll get to why I think

it’s happening in a minute … overall, if I was sitting out there and wanted 1) best

overall LOWEST spreads & LOWEST RT COMMISSIONS, and 2) range of markets

including crypto, I’d choose COINEXX, cuz TURNKEY at present doesn’t offer

crypto trading … both have very light KYC requirements, which is simply sending

them an ID … big whoop … TURNKEY HAS DOLLAR AND EURUSD accounts,

whereas COINEXX HAS crypto accounts as well, so you can hold account

balances in Bitcoin or 4 other crypto pairs … PRIMEXBT IS NO KYC, and if you

prefer NO KYC this is the place, but if you’re trading FX over about 25,000

notional, the bid/offer spreads climb quickly … their oil trading is OK, but

compared to either TURNKEY OR COINEXX it’s “subpar” … you end up paying

about $0.007 more per trade than you would at COINEXX OR TURNKEY … OK, so

do the math here … 250 trading days per year, 3 trades per day average, 100

barrels per trade [a buck a penny] … your small account of less than $1,000 just

sent the brokerage house & LP’s $525 for absolutely NO REASON … unless

you’re Pablo Escobar, why would you pay this?

As I said, spreads have collapsed, and not just for a millisecond or two, but over

the entire European & U.S. sessions … spreads for EURUSD & USDJPY from

0 - 0.1 quite often, with a sprinkling of 0.2 - 0.3 thrown into the mix … GBPUSD

SPREADS OF 0.1 - 0.3, with a sprinkling of 0.4 - 0.5 … now here’s what amazes

me to no end … spreads in EURJPY & GBPJPY of 0 - 0.3 pretty much most of the

day! … some smattering of 0.4 - 0.5 if stops get run in Cable or EUR … in other

words, interbank spreads in both crosses where you’re getting the YEN for free

… cuz remember, on institutional platforms these spreads are almost always

0 - 0.1 PIPS … so what’s going on here?

My guess here, and it’s only an educated guess, is that the world’s largest HFT’s,

namely outfits like BlackRock, Virtu, & Citadel, to name just the largest three,

have decided to undercut the scumbag LP banks and steal some business in

this $9 TRILLION PER DAY DOLLAR BUSINESS … and especially offshore

brokerage houses that accept deposits / withdrawals via crypto, it cuts ties with

anything having to do with the U.S. via either the FED or their BFF scumbag

American bank LP’s … in other words, not only can they give clients better

pricing, neither the U.S. Treasury, the FED, or any of the scumbag Wall Street

bank LP’s can exert any pressure on these brokerage houses to 1) do KYC,

2) don’t accept crypto, or 3) face the loss of liquidity providers cuz you won’t do

#1 or #2, or both … “does anybody else see a middle finger in the air besides

me”?

And this has started to bleed over into other markets as well, and I wouldn’t be

surprised if metals were next, cuz it appears it has happened in crude oil … and

quite frankly, the HFT’s have all of the advantages over the scumbag banks cuz

they’re private business and aren’t subject to FED banking rules & Treasury

directives. Now, all we need are FX markets that actually trade instead of only

screaming in one direction or the other.

PRECIOUS METALS

XAUUSD & XAGUSD

The problem with both gold & silver isn’t the IVIX INDEX level, although you

wonder why their lack of higher levels given stocks cratering, it’s the fact that

bid/offer spreads are beyond laughable & ludicrous, they are criminal thieving of

the highest order, AND slippage is out of control with any market fill turning into

a guaranteed roller coaster ride … there isn’t any way you can scalp and/or short

term trade these 2 without the scumbag bullion banks cleaning your clock!

… this isn’t complicated, just thieving bandits looking for easy money from

dopes willing to give it to them.

STOCK INDICES

And as you can clearly see, IVIX INDEX levels rising to insane levels on Thursday

& Friday, and best left alone … and while bid/offer spreads + RT commissions are

what traders look for, SLIPPAGE IN ALL OF THE INDICES on fills, most notably

the DAX30 & NDX100, are atrocious … eye watering terrible! … remember, the

scumbag LP’s have no rules prohibiting them from filling you anywhere the hell

they want … you buy into a market ripping higher, or sell into a cratering M1 red

spike down, and I guarantee you ain’t gonna like what you see next in that fill box

… and of course, just like the metals, your stops get run with abandon and raped

multiple times per day by these thieves, so somebody tell me how that helps your

account? … “right, me neither” …  and for the uninitiated Newbie to trading, on

ALL electronic trading platforms [MT4, MT5, or any other], “limit orders” are

nothing more than “MIT” [market if touched] orders, and of course the scumbag

LP’s are NOT held to either your buy or sell limit order … “I no longer use limit

orders in my trading, cuz THREE TIMES over the last 5 years, I’ve had “sell limits”

to take a profit from a long position, see the market go through my “sell limit” on

the bid side of the order box to the upside, only to see price immediately plummet

and I got filled substantially lower than my sell order, cuz it got treated like a MIT

order … yea, a bunch of bullshit, but there’s nothing you can do about it if you

want to trade”.

Which brings me around to crude oil … the “revolution” that is happening in

pricing is, IMHO, due entirely to HFT’s entering the space and leaving either the

oil brokers or scumbag banks in the dust … for years, the CME has frowned upon

banks and/or oil brokers making arbitrage markets in crude oil to offshore

brokerage houses and their CFD’s, unless of course they were total ripoffs with

spreads of 5 - 7 cents per barrel, cuz the CME didn’t want any competition against

their e-mini crude oil futures contract [500 barrels], which quite frankly is a loser

… enter the HFT’s and the CME has no leverage over these companies … they

have TRILLIONS IN ASSETS, and their operations are private … all I can say is,

about frickin’ time!

Oil as a market is completely different than anything else … it’s a “physical”

commodity … you can’t use the CNTRL-P machine at the FED [or other central

banks] to manipulate the price … and as we saw in May 2020 when the May

contract went off the board at -$40 per contract, somebody was PAYING YOU

$40,000 to take delivery of 1,000 barrels of oil, cuz there was literally no place to

store it … “how many HFT’s and other entities, in late February & March when the

pandemic started to hit, went out and locked up every single oil storage unit in

the country for the next 6 months or so, as demand for oil plummeted with

lock downs, and left ZERO storage for any of the futures expiration's going

forward into the Summer”? … I’ll bet more than a few.

Breaking the IVIX INDEX tables above down, directly below GBPUSD & GBPJPY

[the most volatile FX pairs last week] versus oil [WTI and/or Brent] for

comparison.

As I said in an earlier blog, if oil was an FX pair you’d be trading it cuz it

compares very well and has more distinct active trading hours than FX … Labor

Day Holiday tomorrow so the U.S. will be closed, but Europe pays no attention,

so we’ll see what happens … of course, like anything else cuz nothing is perfect,

oil has its moments of “deadness” & “lunacy”, particularly every Wednesday

morning at 10:30 AM EST [this upcoming week it will be on Thursday at

11 AM EST cuz of the Holiday], as the crude oil inventories report comes out and

moves oil, sometimes dramatically.

Not expecting anything overnight or tomorrow, but you never know in this stuff

… until tomorrow … Onward & Upward!! 

-vegas