Brokerage houses serve one purpose only … to protect the scumbag, liquidity
provider [LP] banks and/or HFT’s from having to deal with customers who they
fill orders for … and for that service, they give the brokerage house a piece of the
trading action … some more than others to be sure, and this idea of a vast
network of “tier 1” liquidity providers fighting for your order is complete bullshit
… it doesn’t matter where you trade, your brokerage house will not tell you who
filled your order … under no circumstances will they tell you this … gee, I wonder
why that is? … well for starters, over time you’ll notice it’s with the same
scumbag bank … well, how can that be in this vast network of LP’s fighting for
orders? … and that leads customers to start asking other inconvenient questions
nobody wants to answer.
This idea that LP’s fill orders “on the market” is one of the biggest lies in finance
… they’re SCUMBAG THIEVES, and even in the highest volume, supposed
highest liquidity pool markets like USDJPY and/or EURUSD, they incorporate
different strategies to loot your account a few pennies or dollars at a time, simply
cuz they rely on 2 things … 1) it ain’t enough to matter … OK, I screwed you
… you gonna sue us over $0.75? … and 2) we hope you don’t notice or care, and
make sure nobody in the financial press EVER reports on what we actually do.
From the micro perspective of things, razor thin spreads matter to your bottom
line … if they don’t, you’re telling me you run a business without caring what your
costs are? … or whether your employees or suppliers are cheating or stealing
from you? … but since this is trading, it’s OK? … and as I’ve said before, this is
why people would pay hundreds of thousands to come to the trading floor … to
be at the source and pay AS LITTLE AS HUMANLY POSSIBLE … ACTIVE
TRADERS PILE UP THE TRADES, and over the course of a year or more, the
amount of money is substantial in scope … but even in the tightest EURUSD
cost structure going, which is at IQCENT, where the total cost to trade EURUSD
is between 0.2 and 0.3 PIPS, if you buy on a move up or sell on a move down,
they are gonna impose their own “LP traders tax” on you to the tune of 0.1 or
0.2 PIPS … you’re not gonna get the offer to buy or the bid to sell you think you
should be getting … this isn’t how LP’s work … LP’s view filling your order from
either one of two vantage points … 1) they aren’t really LP’s at all, they are
market makers trading against your order, and your buy/sell fill depends on
whether or not it helps or hurts their own trading book … if it helps, you get a
decent, good fill … and 2) if it doesn’t, you pay up Skippy and are gonna get
filled off the market by at least 0.1 PIPS … you might think this is splitting hairs
or is piddly shit, but in TRILLION DOLLAR+ PER DAY MARKETS, multiplied by
millions of accounts and millions more in trades, it matters.
By doing the opposite of this, doesn’t guarantee decent fills, but it does raise the
probability of getting them … if you consider yourself a scalper, and you’re looking
to book a profitable trade, you absolutely have to sell [liquidate] the spike higher
to get the best chance of a good fill near or at the top … ain’t nobody from the
scumbag bank is gonna send you an email and give you a heads up … if you
don’t liquidate on the spike, you are giving money away! … then, it doesn’t matter
what happens next … let it go … prepare for the next opportunity.
On the macro side, it’s pretty easy to point out scumbag bank LP’s fading order
flow, especially when there’s nothing going on, no news reports or econ data, no
FED Lounge Lizard Pie Holes speaking, or anything else for that matter in
markets spread across the trading spectrum … and we had that on Friday in FX
… any kind of breakout of traditional support / resistance lines on the m15, m30,
or h1, usually get initially faded by banks … simply buying a break of resistance
or selling a break of support will end up with losing trades … in order to break
this cycle, simply use the slope of the RM 1-4 on the m15 as your guide … if you
want to trade both long / short FX pairs, this will always have you on the proper
side for the easiest trade … the one caveat, is that when sentiment shifts, that
first move off the bottom UP or off the top DOWN, you’re gonna miss cuz of the
short lag … the tradeoff here, is that you give up those moves for plenty of others
where the corrective activity is short in time and scope and the trend continues
… get long too soon on the way down, and you know what I’m talking about
… after they club you like a baby seal at a Japanese whale hunt, and the losses
have mounted, it then turns and you don’t take the trades cuz of the prior pain
… by using the m15 RM slopes, you get to skip all that … IMHO it’s a decent
tradeoff.
On the other hand, you don’t get something for nothing in trading … and whether
you love to buy or love to sell, both sides have equal pain from the scumbag LP’s
in equal amounts … they favor nobody, as they hate all specs … so whether you
only want to be long EURUSD or USDJPY, or short EURUSD or USDJPY, you’re
gonna face the exact same problems … the benefit should be obvious, as rallies
and breaks happen all the time, and if you’re a scalper getting the best deal,
opportunities are almost endless during the trading day, FROM THE SIDE YOU’RE
TRADING FROM.
And if by chance you’re trading at some house where costs are higher,
sometimes significantly higher, you got to rethink your strategy cuz you are
giving money away for nothing … Fusion Markets, like many others, offer ZERO
spread trading in many FX pairs, with a $4.5 round turn commission … therefore
your cost is 0.45 PIPS … for pairs like EURJPY, GBPJPY, or AUDJPY that’s about
as good as it gets … you can’t sit there and then pay 1.5 PIPS and then say to
yourself it doesn’t matter, cuz it does … AT IQCENT, EURUSD has a total cost of
0.2 or 0.3 PIPS … I’ve been filled at both … USDJPY at 0.5 or 0.6 … the difference
between many houses will be the marginable leverage they offer traders
… IQCENT is 500:1 leverage for EURUSD and 300:1 leverage for USDJPY.
Directly below, the 20 Day Range MA’s for selected markets.
This is “J-Hole” week … PMI’S and a slew of FED Lounge Lizards speaking this
week, and then on Thursday & Friday comes the J-Hole BS, with Spicoli the main
attraction on Friday morning … what happens with the ChiComs this week and
the implosion of their economy, particularly their domestic real estate problems
& defaults, will determine each day how “risk on / risk off” [RORO] is traded and
sorted through by markets … so far, their response has been described as “timid”
… what markets want to see is a massive liquidity infusion, but so far that’s a
pipe dream … the PBOC YUAN fix each night around 9 PM EST, gives a decent
idea of what they’re thinking … the last 2 days has seen the fix much stronger
than usual, a signal of the ChiComs intent on telegraphing their displeasure at
a fast devaluation, and that intervention remains viable … will that still be the
case this week? … in any event, if USDCNH breaches 7.35 to the upside in any
meaningful way, and rates go higher in the U.S. as well, things could get very
ugly in thin end of August markets, especially EURUSD and USDJPY
… onto the week!
… OUTTA HERE … “The future’s so bright I need 2 pairs of sunglasses 😎😎,
and my own Brinks armored truck” 💓!! … Onward & Upward!!
-vegas
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