KNOW YOUR ENEMY

 

“Amazing … she must be genetically related to EURUSD!”

When I used to do seminars all the time, I used to constantly hear something 

along the following lines; “man, I don’t know what to do … I try to be long in a 

bull market and I get killed … I try and be short in a bear market and it’s even 

worse … I get up a little money, and then as if by some magic wand being waved 

by an alien in the 9th dimension, they take it all away and go right to my stop 

… where, upon filling me at the worst possible price, the market turns around 

and goes right back to my old profit territory … I’m at my wits end here, trying to 

figure out what the hell the problem is … can you help me”? And to borrow the 

scene from “The Matrix”, you got a choice between the “red pill”, which shows 

you the truth, or the “blue pill”, which keeps you in the delusional state you’re 

in now … what’s it gonna be?

There’s a lot in what he/she said in the above statement, and I’m simply 

gonna tackle one part of it today … that part, is “know your enemy”. At first 

blush it may seem contradictory, cuz any of these MT4 markets we trade, are 

faceless, non-human discovery mechanisms … how can I attribute it as my 

enemy?

Make no mistake, financial markets are the most predatory human created 

creatures ever devised … there isn’t anything it can’t destroy given the right 

circumstances. Back-in-the-day when I used to roam the currency & SP500 pits 

in Murder, Illinois, the active membership on the trading floor was 

predominantly Jewish … especially in the financial products like currencies 

and the SP500 futures … and on some of their bad trading days, when it 

appeared that more than a couple might be headed back to the homeland cuz 

their accounts went “Thelma & Louise”, you’d hear somebody say something 

like, “wow, if only Hitler had known all it takes are trading accounts in financial 

futures, he could have saved a lot of time by just giving everybody an account and 

simply wait”. And while all the non-Jewish members were trying to hide the 

fact they were laughing, the other Jewish members didn’t care … they were 

laughing the loudest!

My point here is simple; “there isn’t anything new under the sun”. Our enemy 

are the scumbag LP banks … always have been, always will be. And until you 

understand “how” the trading game is played, you will never truly get rich 

from trading. Scumbag LP banks have only two functions, and neither of them 

is to provide “liquidity” … what a cruel joke that is … they are 1) make money 

off retail spec accounts however, whenever they can that won’t get the bank 

indicted, and more importantly 2) front-run corporate orders. When the second 

item dries up, that’s when the first comes to the fore in spades, and you’re much 

more likely to get terrible fills off the market … they got to make money, and 

while the real money is in the second, if it’s not there, they got no problem 

looking at your order ticket for “nickels and dimes”.

Those spikes you see on the M1, both up & down … they come from the bank 

front running some corporate order … and while they will deny it of course, 

the fact is they have numerous offshore LLC’s that get word from the FX 

trading desk, that XYZ, Inc. is buying [or selling] 100 million EURUSD, and 

while the dealer negotiates the price, the rest of the team is buying up 

EURUSD … when the price of the corporate buy is decided, usually 3 - 5+ PIPS 

higher than where the price is currently for EURUSD , the FX dealer hits the 

electronic platforms for all he needs … his buds get filled, the bank makes 

money on the arbitrage, and you simply see the spike instantaneously on your 

screen, usually immediately followed by, “WTF was that”? And from there, it’s 

simply rinse & repeat the same process all day long, and at some point, part of 

the loot is split back up to the FX dealer, his boss, and most likely the guy 

running the show from the top … this is what happens, and this is the reality of 

trading. “It’s the very premise upon which is built one of my golden rules, which 

is you can’t buy spikes up or sell spikes down and expect to make money. You have 

to wait for the corrections or pullbacks and make your stand there, and sell the 

spikes up in your profit direction when long, or buy the spikes down in your profit 

direction when short … and if you wait for the right “setups”, the probability is 

very high you will make money on the vast majority of the trades … simple as 

that”. It’s a very simple concept, but very hard to train yourself to do it. And 

so what ends up happening is people buy the spikes up and sell the spikes 

down, and the retracements take them out on dealer “stop flushes”.

Turning to today’s market … not much here until New York shows up, and 

then … BOOM! … lower we go. All price action is coming is “fits & spurts”, 

and there is absolutely no “flow” to anything happening in EURUSD … and by 

 “flow” I mean relatively smooth price transitions from one PIP to the next 

… that would indicate volume & liquidity, and from where I sit, there isn’t any. 

Still, here at mid-morning NY, we only have a 58 PIP range … not exactly 

setting the world on fire … and as we go into the European close and into the 

NY afternoon, I want no part of this … it’s a Friday, with no news except 

political, and EURUSD looks & feels “tired” … outside of today’s open, which 

for half an hour saw some decent short covering going into the weekend, after 

that it’s been Mr. Slim Pickens if you’re looking to get long … and quite 

frankly, that early short covering boost robs later rally attempts by taking away 

necessary fuel for a short covering panic; something I’d love to see, and of 

course is still possible, but not likely … there just isn’t any evidence of 

anything besides light short covering to give price an upwards boost, and I 

don’t think here at mid-morning it’s gonna see any kind of significant 

improvement going forward into the afternoon trade … could be wrong of 

course, but I’m not willing to get caught in dealer bullshit on a Friday 

afternoon, simply cuz there is literally no way to make the money back in 

choppy trading conditions if things turn sour.

Only one trade today … again, PAMM up slightly, nothing significant.

The ‘setup” was there, but it simply didn’t “pop” to the upside when it was 

supposed to, so I liquidated … and sure enough, 2 minutes later it popped a 

little, but nothing significant. It’s simply not a day, like the previous two, 

where long positions are favored for profits.

In any event, again today the majority of the day given over to chop bullshit in 

the first half [4 - 4 ½ hours] of the European session. As I said yesterday, this is 

not a welcome development, as it shortens the trading day and exacerbates 

price moves during the most liquid [supposedly] hours of trading … when 

everything in terms of price falls to the New York banks, you can expect 

nothing but trouble and headache, especially in the afternoon after Europe 

closes. “Thanks, no thanks”.

Most likely, on Sunday night my bull/bear indicator from “The Teacup Handle 

Turn” will turn either neutral or bearish; it’s been in bull mode since November 

2017 … that gives me the signal to move to possible short positions on rallies 

starting Monday … we’ll see what happens there. Also, I’m going to try and 

have the “EURUSD Aggressive Scalper Tutorial” done by Sunday night … right 

now, don’t know if it will be, but I got the weekend to work on it, so I’m 

hopeful. Other than that, another light profit day, but it’s better than losing 

… I’ll pick up on the trade again on Monday … I’m outta here early today; 

TEE TIME in exactly 1 hour 15 minutes … until then mi amigos 

… Onward & Upward!!

PAMM spreadsheet directly below.

 

 Have a great day everybody!

-vegas

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