Advisory – More on Nasty Rumors

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You know in my division of the two main groups of traders there are a
couple of other characteristics of these two groups that I think are
of importance to note. You might be able to sum these differences
between those who are content to work within the system and those who
seem to think that they have to work outside of the system and this
brings me to the first characteristic.

Those who think they have to work outside the system are usually the
“quick strategy” type who can’t seem to resolve the coding issues.
But, they have to have someone to blame for their problems on and this
becomes the brokers – it is all the broker fault that the trades don’t
work, or the brokers are all out to get you. The reality is however
that seasoned traders try to work with the brokers and in the end this
is actually far more advantages. The broker business isn’t easy and
they have their own constraints to deal with. Designing your
strategies to comply with the things they have to deal with cannot be
anything but better.

There is also the issue of self importance. There is an old adage in
this business that seasoned traders also learn and goes something like
this – “virtually all of the guys who are out there trying to tell
everyone else how to trade are generally doing this because they don’t
know how to make money in the market themselves and can only make a
living by selling this service.” This view was also expressed by most
of the World Trading Contestants as “most of the programmers who have
resolved the coding issues are not posting or advising anyone on any
forum.”

Now the self importance thing is really kind of funny on another front
in that these people actually think that they might have some
influence on the fate of the markets. To put this in perspective let’s
take a look at the real reason why oil prices went to $160 dollars a
barrel. As things are being unraveled now it appears as though this
situation was caused by 3 or 4 hedge fund groups that were pitted
against each other. One was on the short side and the others were on
the long side. And this situation just like the Currency Hedging
situation was sucking up all of the liquidity in the oil futures
market. The whole thing collapsed when Sun Group couldn’t come up with
a $500,000,000 margin call. And this was just the Margin Call AND
this was just for one hedge fund. A $500,000,000 Margin Call at 100 to
1 leverage means that these guys had 50 TRILLION dollars worth of oil
futures tied up and this was just on the short side. And this is the
kind of problem the NFA is really having to deal with in regards to
currency liquidity.

Now let’s get real here, even if you added up all of the money at the
disposal of all of the currency brokers in the business it wouldn’t
even show up as a decimal point here. And if you think that the big
players even use retail brokers for trading that is a whole other
issue. Nor, is it very likely that they use any MT4 Expert Advisors
for their trading strategies.

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