Well now, yes indeed, isn’t that special!? … the DAX40 spread at Turnkey on
Wednesday at 0.5 index points the entire day! … today, right at the European
open, almost to the second, the spread comes in from around 2,2 index points
from the Asian session, and is at 0.5 index points ever since … that’s a far cry
from the 1.4 - 2.2 index point average before, and if they can keep it there, the
DAX40 becomes very tradeable & doable … the $64,000 question, though, is this
for real or is this simply “bait & switch” bullshit to get traders into it, and then
they raise the spread back to its old value … we’re gonna find out real soon
… but, talking with Turnkey management this early AM, they say it’s for real
… heard that before, so we’ll see ... cuz the 20 Day Range MA is about the same
as WTI Crude Oil, but with only a half index point spread, it would be significantly
LOWER IN COST TO TRADE than oil, and given that low spread, it moves quite a
bit more inside the M1 than does oil.
When looking at any kind of history of a market, whether you go back and look at
M1’s or any other time period, you have to be extremely careful to not fall into the
trap of “painted” candlesticks when judging or creating a model / algorithm for
trading that particular market … and it’s why I’ve always said, that in order to get
a true picture of an algorithm’s worth, or effectiveness, in accurately modeling the
behavior of a market so you can profit from its movements, you CANNOT rely
solely on historical charts to give you the true picture, you have to analyze it on
the fly first to see how the M1’s behave relative to 1) volatility, and 2) the
bid / offer spread.
For example, you pick a market to analyze what you think would be a good market
to “trade” [my definition, which is scalping], cuz in running the algorithm past
historical ups / downs on the M1, it appears on the surface to be a “winner winner,
chicken dinner” … however, those nice M1 ranges you see on the chart, are
masking some very erratic behavior that isn’t at all conducive to profits
… consider a market that has a nice M1 green [UP] spike after an algorithm buy
signal, so that you then assume it would have been a really nice winner, cuz in
looking at the M1, all you see is green from open to close of the M1 … natch,
many of you would simply assume that M1 opened and spent the entire minute
doing nothing but going up … and you couldn’t be more wrong! … cuz when you
watch it live and pay attention to how the market is behaving, you come to notice
that too many times those green spikes go from the open of the minute to the
high of the minute faster than you blinking your eyes, then spend the majority of
the minute going down, before somebody steps up and pumps it into the close
of the minute … seeing this, you get out of your long position and either make next
to nothing or with some slippage from the scumbag LP, actually scratch the trade
… later you show somebody the trade, and when they look at it, they’re
confused … “why did you sell here in this M1 when clearly it has good upward
momentum on a green spike”? … and what you end up with is a scenario much
like Einstein’s relativity, where it depends on the location of the observer
RELATIVE TO EACH OTHER, cuz each has a very definite DIFFERENT view of
what’s actually going on … this is called a “painted tape” or a “painted chart”,
and is not reflective of actual trade conditions, where a trader almost
unconsciously introduces his / her bias of “normalcy” and then expects the
algorithm to spin gold from strands of cotton!
This is the problem in a nutshell when trading anything on the MT4 / MT5, and why
it’s of the greatest importance to have razor thin spreads and low commissions,
cuz minus the transparency of the “open order book” [OOB] platform, we have to
deal with scumbag LP’s whose sole goal is to screw us, right along with the
manipulators whose job it is to “paint the tape” when necessary … weeks ago I
had thought some of the AUD or CAD crosses could work for us … then watching
the live action, it became so apparent so quickly that too many of the M1’s were
“bogus” & “painted”, and if I used the trading algorithm I’d be the one getting
scalped … so, the only thing to do is to leave those markets alone and move on
… “we don’t leave markets, markets leave us”! … FX the same thing cuz it looks
inviting … spend some time watching in real time the slippage on bids / offers and
how fast the high / low of the M1 gets put in and what happens next … you can’t
beat the bank when it comes to the fastest computers or networks, so hoping
you can jump in front of them is not gonna ever happen!
Everything is dependent on volatility & cost to trade … everything else is simply
nice conversation to help you convince yourself you’re some kind of trading
“guru” … and the dirty little secret is, that’s what the scumbag LP banks or HFT’s
want you to think … cuz if you do think that, they know your money is gonna be
their money in short order! … now, the DAX40 [changed from the DAX30 in late
September when they added 10 more companies to the index] is and always has
been most of the time a really good moving stock index … it’s not part of the
“88/6/6” paradigm cuz it’s the German index equivalent of the U.S. DOW30, so its
paradigm is going to be lower … still positive, but not as high as the “88/6/6”
paradigm … the key here has always been what it costs to trade it relative to its
volatility … if Turnkey can keep this spread, this is a “game changer”, cuz from a
scalping perspective you aren’t gonna get caught in the spread, and the RT
commish for this is ridiculously low [less than 0.2 index points], so if it’s time to
exit a trade you get the very best price … with this kind of spread, and the way
the DAX40 trades, crude oil would need to see M1’s with vastly higher ranges,
AND TRADING ACTION that warrants putting on and holding a position … right
now, for the last 2 hours, the M1 average range in crude = 4 cents … the M1
average for the DAX40 = 2.8 index points … in both, nothing to set the world on
fire today so far and things are relatively slow … however, take these M1 averages
and divide them by the spread … for crude that = 4 / 3 = 1.33 … for the DAX40
that = 2.8 / 0.5 = 5.6 … 4 times more profitable to trade the DAX40 than crude oil,
and that doesn’t take into account how fast trading actually is! … trust me, it’s
faster in the DAX40 … do the math Skippy, crude needs to see 15 - 16 cent M1
ranges in order to equal the “profit power” of the DAX40 given their respective
spreads … well guess what? … crude doesn’t get that except rarely, maybe 5%
of the time … this isn’t rocket science, the DAX40 conditions are clearly better!
None of this is an issue over in crypto, cuz 1) full transparency of the OOB platform
and you don’t have to wonder if you’re getting screwed [you’re not] cuz you are the
market, and 2) even when BTC is slow the M1 ranges are around $70, and the ratio
used above comes in around 7 … and when BTC is flying, that ratio will be around
12 or 13 … as I said yesterday, there is no better market to trade ANYWHERE than
BTC … everything everybody & their brother says they want from trading, Bitcoin
gives it to you in spades … why else do you think millions have abandoned
traditional markets and now trade crypto exclusively?
As I have previously mentioned before, Turnkey has made it known to me they
want to be a “player” in stock indices … their SP500 is about as good as it gets,
but I don’t like the way the SP500 trades … too often way too slow, and then it
goes bat shit crazy [BSC] … in other words, not enough consistency … well, here
now comes their DAX40 offering, and if they can keep the spread, it’s right up
there with the very best being offered, no doubt about it … and in looking at the
FTSE100, their spread is 0.8 index points, which definitely puts them in the top
tier … the DOW30 and NDX100 are OK, but again like the SP500, I have issues
with how they trade … those issues are absent from the DAX40 … and I will just
add, I’ve been trading the DAX40 [30] on / off since electronic trading began
… long time readers know this, but in recent years it’s been “hit or miss” cuz the
volatility swings have been “bigly & yuge”, from almost crypto status during
“GREXIT” [2014 - 2015], to days / weeks / months where you’d be hard pressed
to see the index move 50 - 75 index points the entire day … and in addition,
offshore brokerage houses that go from super competitive in the spread, to
downright nasty, all while U.S. citizens / residents get barred from the best
brokerage houses and are treated like lepers … that’s BEFORE the crypto
revolution, and now with what Turnkey is doing [again, I cross my fingers and
hope!], the DAX40 has never been this good … never … and I know this market
like I know the back of my hand, cuz I’ve been around trading it since its inception
in 2000, where it was the sole stock index being offered by anybody … so yea, I’m
very familiar with its “fingerprint” and how it trades … all that’s ever been missing
are the actual trading conditions, cuz they’re either good, acceptable, or stink
… hang around trading long enough, and somebody eventually figures it out!
… now, they need to work on gold & crude, cuz both have too high of a spread
… we’ll see!
OMG! … “Church Lady” my trading heart can’t take this much excitement! … and
lo & behold, spot gold [XAUUSD] trading with an approximate 10 cent spread,
down from the upper 20’s to mid 30’s, with the bid / offer spread going between
6 cents on the low side to about 15 cents on the high side … “is Turnkey trying to
kill me today with great news”? … and again, this is a game changer for gold, cuz
with that kind of spread and an approximate 2 - 3 cent RT commish, it’s pretty hard
to get caught between the spread over minutes at a time … I don’t care if it’s
manipulated or not, with conditions like this gold should be hard to ignore, and
given its decent VIX, it definitely becomes tradeable again … like I said, “I don’t
leave markets, they leave me”, and if conditions warrant going back cuz of
positive developments, I got no problem with it … well now, this is good news”!
And this means that crude oil is “Adios” if and until it can see a lower bid / offer
spread … and that would mean a CONSISTENT 2 CENT SPREAD, which I don’t think
is in the cards … when it gets really slow, the LP can go to 2 cents, but history
shows that doesn’t last long … otherwise, there’s no point in trading something
when there are equally volatile [if not more] markets with better profitability ratios
… it’s been fun oil, but if you’re not going to be as competitive as other markets,
what’s the point? … “trade it, don’t date it”!
How bad is crude oil and the trading action in that complex today? … the largest
crude oil build since March and it still can’t move … meanwhile the 3 cent spread
looking like the distance across the Grand Canyon, given the lack of anything
happening … man, what a slow motion train wreck!
Gold yesterday sees a $40 range … since Europe opened today some 10+ hours
ago, gold can’t move $5 from the tips … nothing new here cuz it’s the same old
“Comex Con Game” shit, different day … the manipulators let VIX go cuz of
pressure building up in the market, then once that happens it’s back to
manipulating VIX with shit like you see today, where it’s a very tiny “Flying Wedge
of Death” [FWD] back & forth in a $2 - $3 yo-yo, with specs looking for more cuz of
yesterday [if there are any left to trade], and not getting it … meanwhile, the DAX40
going FOMO, right along with the “Spoos”, cuz I guess since inflation numbers
weren’t worse than Venezuela or Zimbabwe, everything is good again … every day
sees “Stock Bellies” either go straight up in a FOMO driven panic, OR straight
down in panic selling … the key question, though, is could the new spread in the
DAX40 allow us some buy signals? … and after tweaking the trading algorithm to
take into account these lower spreads, the answer is YES … there were some buy
signals that weren’t there before … ditto in gold.
Quite frankly, crude isn’t gonna cut the mustard for my trading style … too high of
a spread, and wickedly slow moves on the M1, followed at some point by lightning
in a frickin’ bottle … either one by itself is fine, cuz you can adapt your trading
algorithm to match what’s going on … combine them, though, and it’s a
prescription for getting whacked! … “Dear Sil & Paulie: not today fellas, not
today”! … tomorrow sees me in both gold & the DAX40, assuming the new lower
spreads hold, which I think they will, especially in the DAX40 … gold we’ll see,
but I most definitely welcome an approximate 10 cent spread … NO trades today
in the Turnkey PAMM … into the New York afternoon now, and markets are DEAD,
so time to pull the plug on this rodeo … I spent the day analyzing M1 action in real
time, and the algorithm parameters response to what happened … both passed
… if things hold, tomorrow will see multiple trades via the trading algorithm
… GiddyUp, onto tomorrow & beyond!
Yesterday saw crypto, specifically BTC fall sharply in late afternoon trade, wiping
out sell stops, before reversing and rallying strongly multiple thousands of dollars
… so far today, a dull day, but price has been hanging around the low for the day
for quite a while … range is about $1,000 UNDER its 20 Day Range MA … maybe
history repeats two days in a row, or maybe not … we’ll see as I monitor it going
into the close in a few hours … no trades today for “The Syndicate” simply cuz it’s
been one of those days where nothing is going on and BTC price isn’t moving
well … I don’t trade simply to trade, and if BTC isn’t gonna move, then we wait,
it’s as simple as that.
… outta here … “the future looks so bright, I need sunglasses”! 😎
… Onward & Upward!!
-vegas
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