YES HAL, WE GOT A PROBLEM!

“Me, talking to the HAL9000 computer system at the LP.”

I’m gonna skip my usual routine of talking about something on my mind in the news, and go right to today’s trading … maybe my name was on all the bullets they use from the alien gallery to decide who wins, loses, and why … to make a long story short, I lost a little less than 1%, and about 75% of that came via slippage from the scumbag LP. Simply put, I couldn’t have gotten worse fills if I sent the orders in via carrier pigeon to a CME broker.

So, I actually got to have a nice chat with a service representative at the LP bank, and I didn’t hold back one damn bit … it felt good, but you know the drill … “Our HAL 9000 computer system checked itself and everything is fine … all the fills were good”. Yes, very good for you, bagging my orders and stuffing them in your account. I talked with more than one person, and of course nothing is going to change … hell will freeze over first before they adjust or admit anything.

For its part, the algorithm worked well, the market didn’t … after the retail sales news broke, and all hell broke loose, bids/offers were all over the place and slippage was 3 – 5 PIPS if you were lucky … we weren’t. Add it all up over 4 trades [1 winner and 3 losers that shouldn’t have been], and out of the approximate $400 I lost, I’m estimating about $300 of that was via phantom shit fills that had no business being handed out. And of course, this is the same old “same shit, different day” routine you get from these guys who are simply thieves. And they want me to take comfort in the fact I’m not the only one complaining today, which gives me the chance to reply, “Gee, I wonder why … you’re so honest and all of that … why would anybody complain”?

Well, this brings back nightmare trading conditions to the fore once again, and no matter how good you are, no matter how good your algorithm is, it isn’t going to help you when they set out to screw you on fills via slippage … and boy, was that day today. Of course, this wouldn’t be necessary if the damn stock indices were allowed to trade … but of course, the manipulators can’t have any of that … the only time stock indices trade is when they are allowed to trade cuz the manipulators find out from their criminal TBTF bank buds that there are sell orders on the books to be filled, and they back out of the way for a while. Once that’s over with, it’s biz as usual, and they go right back to sleep doing nothing.

After talking with some people at the LP bank, and doing some thinking today, I’m going to add back USDJPY into the mix as a “stock proxy”. Make no mistake, the stock indices DO NOT reflect reality, they are manipulated so much … given the trading conditions, the only way you can actually trade them is to hold them overnight and hope they move. USDJPY is the premier FX asset class when it comes to “risk on / risk off”, and I thought EURJPY was on a “par” with USDJPY; well no, it isn’t. So, I’ll be adding USDJPY as my first proxy choice to trade [EURJPY SECOND] because it has tighter spreads, deeper liquidity, and I’m assured I will be happy with the LP bank conditions … yea, well we will see won’t we?

From an algorithmic standpoint, the correlation with the SP500 is good, and the trading signals given via the algorithm are excellent, so I’m going to take the LP banks advice and trade USDJPY as the stock proxy of choice going forward.

There are just some days, when I wish this business didn’t exist … today is one of them. I was there, I had the right signals, I was on the right side of the market, and we should have been profitable … we weren’t, thank you very much LP bank. It boils my blood and frosts my cupcake, but there isn’t anything to be done about it … it is what it is … simply move on and tackle USDJPY tomorrow absent anything in the stock indices. I would trade the DAX30, but again today, the “Flying Wedge of Death” [FWD] making yet another appearance, for like the umpteenth time in as many days … new highs, new lows, gaps, spikes up, spikes down … panic one way, then panic the other … since the big traders left the SP500 & Dow30 and started playing here, this market has been utterly untradeable.

As many readers/clients know, in the past I have traded USDJPY and sung its praises … the problem with USDJPY is when it slows down, but it’s simply something I have to deal with cuz we are left with no proxy alternatives; if it goes dead, then it can join the Dow30 & SP500, and we are in the same boat anyway, so what’s the difference? A dead USDJPY is different how from the Dow30 that has a 2 point spread and sits in a ± 7 point range for 3 hours? And, it still has slippage! So for me, it’s 1) ease of trade, 2) “net” trading costs, and 3) does it move? Well, USDJPY certainly stacks up better than any of the stock indices at the moment, all the while reflecting their overall trend.

More importantly, since USDJPY is a “risk on / risk off” U.S. stock indices proxy, the version 4 algorithm works extremely well with the pair, without the headaches and slippage in EURJPY. We give up some in terms of potential daily “range”, but we get back more I believe in terms of almost no slippage [remember, I’m assured I won’t see any starting tomorrow … OK, show me.], and less “sloppy” trading action.

Markets and LP’s, together, are throwing everything including the kitchen sink at us … you name it, it’s getting hurled at us daily … panic up, panic down … the FWD and its doji candlesticks … speed of light moves & then crickets … slippage on everything … and of course, completely dead markets except when they wake up and panic. The version 4 algorithm can handle the market part, but isn’t responsible for the scumbag LP … that’s an unfortunate wildcard we get to deal with daily. However, even with today’s “paper cut”, if going back to USDJPY is going to save us money in the future, I’m happy to pay the tuition now and get it behind us. I know it’s a pain in the donkey to get clipped by these assclowns, but I [we] persevere and move on to tomorrow where opportunity awaits us. So, Onward & Upward!

I’ve got a trade discrepancy in the master account getting figured out from Turnkey; should be fixed by tomorrow morning. I’ll have the PAMM spreadsheet with tomorrow’s blog post.

Beach time! … the dog and I are outta here … until tomorrow.

Have a great day everybody!

-vegas

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