iCharts Discussions

[pkholla]

[ProTrader]

PK Sir:

AAL IS WELL! PT hain na

Regards..PT

[rk_a2003]

Is Market Is Efficient?

China and Australian GDP’s come down and to keep the growth on track the respective Central banks cut the rates. Market rises. Data reveals US recovery is not as per expectations and in anticipation of QE3, market rises. Indian IIP grown at 0.1%, the market celebrated with a rally and continues with it citing the reason that now rate cut by RBI is almost sure.JP Morgan chief went for Congress testimony on $2 Billion loss (Which is suspected to be $8 Billion now) and JP scrip starts rising. All this is justified saying that Market will discount the future. Do they really do it in a comprehensive manner?. Not necessarily so.

If markets are so efficient and rationale, there is no Investing or trading opportunities. They are not so efficient that’s where Intelligent Investor or trader can take advantage. At certain levels manipulations do take place or over optimism take over. Read them properly, you can take advantage out of it.

[vishvesh2001]

True!! Markets can be efficient and rationale if you have a homogeneous set of investors who are free from emotions .If they are all men of steel willing to be patient then yes they could take advantage of this irrespective of any manipulations or over optimism. . Unfortunately it is the herd mentality which prevails and intelligent investors do sense this early and stick on for much more longer to their advantage.

[rk_a2003]

"You simply cannot go into battle with technical indicators developed before 2008 -- they do not work.

So whats your edge ??????


".....You might know all about the big institutions and their boy wonder currency trader, or the girl out of MIT that has a new algorithm for options...but what you may not know is that even THEY are being replaced.

The Market is all set up to discount any indicators designed to predict the market movement.

The institutional traders and the Market Makers know when individual traders are waiting for predictive indicators to appear in order to enter or exit their trades.

And, to add insult to injury, not only do they know what you are waiting for, they will beat you to the trade every single time because in most cases you are trading against a computer, not a human being.

And these trading robots:
*Trade faster than any human can think.
*Execute trades at the speed of light
*Have their servers IN the exchange so there is no travel required to get their
trade to the exchange
*Currently account for over 73% of all US trades and 40% of all European trades
*Are gaining greater access to the exchanges every day
Wiping out retail traders before they even know what hit them"

[vinay28]

A good eye opener, rk!

[sonila]

[rk_a2003]

Sonila,

This is an extract reproduced for education purpose. The answer lies in the extract itself. Develop your own methods.

We should recognize that as retail traders we are at a great disadvantage. All of us might be experiencing them. Look at the comments posted some time back from I chartians regarding SL triggering due to freak trades.

At the same time as small traders we got our own advantages. Recollect America Vietnam war, compared to American war machinery and technology Vietnamese are nothing, If they engage themselves in a positional warfare with US they would have been wiped out with in no time.

But what they did was they never engaged US in a positional war fare .They took up guerilla war fare which cannot be taken up by huge war machinery and the amazing thing is they defeated US.

The bottom line is know your weakness and strengths and also know the strength and weakness of the opponent.

Contrary to majority belief I think the name of the game is rich Institutions, Funds etc… versus retail traders not the seasoned trader’s versus novice traders.

I my self is not quitting trading then how can I advise any one to quit?!.

[psalm]

[pkholla]

Friends: read an excellent article written today by William Cohen in Bloomburg.
What Finra -- the Financial Industry Regulatory Authority, Wall Street’s self-regulatory organization -- did to three arbitrators who, in May 2011, had the temerity to find in favor of a customer in a securities arbitration against Merrill Lynch, the nation’s largest brokerage and a unit of Bank of America Corp. After awarding the estate of the customer more than $520,000 -- a large amount by arbitration standards --Finra heard from unhappy Merrill executives and fired the arbitrators, two of whom had many years of experience.
“You mete out justice, and then you get slapped in the face,” one of the fired arbitrators, Fred Pinckney, told me in an interview.
The matter began in Dec 2009, after Robert C. Postell and his wife filed an arbitration claim against Merrill Lynch for more than $640,000 plus attorney’s fees. Not surprisingly, the brokerage, through its attorney, Terry Weiss denied the Postells’ claims.
Anyone who works on Wall Street or has a brokerage account must agree that any financial claims made against their employer or broker will be adjudicated not in the courts but in an arbitration process overseen by Finra, a private organization that derives the bulk of its $1 billion in revenue from the Wall Street companies that are its members. This upfront agreement by millions of Americans to submit to a Finra arbitration process constitutes one of the largest ongoing abdications of legal rights in the U.S., and nobody seems to be bothered enough to rectify it.
In May 2011, the Postells’ arbitration claim was heard by the three Finra-appointed arbitrators: Ilene Gormly, the chairperson and a former compliance executive at a commercial bank; Daniel Kolber, a securities-law attorney and the founder of Intellivest Securities Inc., a small Georgia investment bank; and Pinckney, an Atlanta attorney. The arbitrators are paid about $200 a day.
Also during the final hearing, according to Pinckney, Weiss, Merrill’s attorney, sensed that he was losing the case and repeatedly “exploded at the panel,” accusing the arbitrators of being biased in their views and rulings against Merrill. The panel took a break, called Finra executives and explained Weiss’s accusations. Soon thereafter, the arbitrators found in favor of the Postells and awarded Joan and her husband’s estate $520,000 in damages.
About two months later, Kolber got what Pinckney called a “black spot letter” from Finra explaining that the private regulator periodically examined its “roster” and culled people from it. “As a result,” Kolber’s letter read, “please be advised that you are no longer being listed as an active member of Finra’s dispute resolution roster of arbitrators.”
Then, in January 2012, Gormly, who has about 20 years experience as an arbitrator, got her “black spot letter.” In June, Pinckney was notified that he was relieved of his duties.
NOW YOU KNOW WHY NO ONE IS IN JAIL, PUNISHED OR FINED. I WROTE TO OBAMA PROTESTING THE ABOVE. ADD YOUR VOICE. Prakash Holla

[rk_a2003]

The write up below id by Bill Bonner.


"07/18/12 Madrid, Spain – You can’t help but feel sorry for the bankers. Yesterday, one of them was so upset and humiliated he tended his resignation — at a Senate hearing.

One after another the bankers mount the scaffold. Goldman, JP Morgan, Barclays…and now HSBC. One loses money. Another rigs LIBOR rates.

One fiddles an entire nation’s books. And another helps terrorists, drug dealers and money launderers with their banking needs.

That last charge is the one leveled against HSBC yesterday, causing the bank’s chief of compliance to quit, on the spot. Here’s the accusation:

…using a global network of branches and a US affiliate to create a gateway into the American financial system that led to more than $30bn in suspect transactions linked to drugs, terrorism and business for sanctioned companies in Iran, North Korea and Burma.

This spectacle may be entertaining, but in our view, it is fundamentally meaningless.

Here’s what really happened:

The feds created a funny money, back in the early ’70s. Unlike the gold-backed dollar, this one was almost infinitely flexible. It would allow the financial system to create trillions-worth of new cash and credit, vastly expanding the amount of debt in the system…and greatly increasing the profits of the banking sector.

The financial industry — the dispenser of the need money — set to work, creating fancy new ways to move the new money around. Each time it closed a deal, it made a profit. Naturally, it was encouraged to find all manner of clever ways to make deals.

Then, when the credit bubble blew up in ’08-’09 many of these tricks of the trade didn’t look so clever. They looked sinister. Stupid. Or crooked.

“When the tide goes out,” says Warren Buffett, “you see who’s been swimming naked.”

It is not a pretty sight.

Billions of dollars were lent to people who shouldn’t have been allowed to borrow lunch money. And now, there are losses — trillions worth.

The real question — the only question of great significance since the blow-up — is: who will take the losses? Or, to put it another way: How will the system be cleaned up? Who will decide who wins and who loses?

Mr. Market or Mr. Politician?

Let investors and speculators take the losses…or put them on savers and taxpayers?

Who will lose? The rich? Or the rest?

We’ve given you our answer many times: let Mr. Market sort it out. He’s completely impartial. He’s honest. He’s fast. And he works cheap.

In a flash, back in September-December of ’08, he probably would have wiped up the floor with the bankers. In a real crash, few of the big banks would have remained standing. Investors and lenders who had put their money in them…and who had invested in the things their phony credits supported…would have lost trillions. The rich wouldn’t be so rich anymore. And we’d now be in some phase of real recovery with many new financial institutions.

But we’re not in a position to impose our will on the world. And the politicians are. So, they’ve decided to do it another way. Instead of allowing Mr. Market to do his work they make their own choices…generally trying to direct the losses towards groups of people who don’t make campaign contributions…and don’t know what is going on. That is, towards the masses…and the unborn…

The idea has been to kick the can as far down the road as possible…borrowing and printing trillions more dollars to prop up the financial system…while also parading a few bankers through the streets with nooses around their necks. The press insults them. The mob spits upon them. The public spectacle continues…

…and nothing really changes."

[rk_a2003]

Read this post from an American market related website.

"guys I'm going on vacation, so please, keep buying ... what else can you do with that crap in your hands? On my return ... everything is going to be sky high. Why? Because we like the sky to be high. See ya buddies ...."

"what else can you do with that crap in your hands?"

This is what exactly happening in the markets....All over the world,but the crap pile is with the Institutes not with individuals.

[rk_a2003]

The Truth Behind the Tragedy of High-Frequency Trading


"It's no wonder the public is scared to invest in stocks. They believe the game is rigged.

It is, and I'm going to tell you who's behind it, what's really happening, when it started, where the sinkholes are, why they're there, how you can play in the short run, and how America can get back to investing in a successful long-term future.

The bad news is the problems infecting our capital markets are all systemic. The good news is that they can be eradicated one by one, if not all at once (which won't happen).

Today, we're going to look behind the curtain of high-frequency trading.
It's a nasty bug in the system and has long-term consequences, including the potential to kill the markets.

First of all, high-frequency trading isn't just what you think it is. It is much more than you know, and is in fact part of the fabric of the markets.
Here's what the high-frequency trading game is really about.

The HFT game is about sometimes setting-up and almost always "picking-off" trades that represent tiny discrepancies in prices across all those different trading venues.

Sometimes HFT trades are arbitrage plays where a position is bought somewhere and sold simultaneously somewhere else because price discrepancies across different exchanges make such opportunities possible.

Sometimes HFT plays are manufactured by "pinging" (sending out fake orders to try and move prices), which triggers other orders to be sent, which in turn are picked-off, or to be more politically correct, traded upon.

It's Actually High-Speed Trading

The truth is that almost all trading today is high-speed trading. So to call it all what it really is, we're going to label the problem we're highlighting today "high-speed trading," of which actual high-frequency trading is a huge part.

Who is involved in high-speed trading? Everyone.

What's going on is that competition for trades (transactions by themselves are money-makers because people pay to get their trades executed; they pay brokers, trading platform operators, and exchanges) forces intermediaries (brokers and brokerages) and some exchange venues to actually pay for "order flow."

The idea of paying for order flow is that if you have a lot of orders on your exchange to buy and sell any given stock, chances are the spread (the difference between the bid and ask) will be narrower and liquidity (the ability to trade more shares at better prices) will be deeper.

But none of that much matters if you can't get to those opportunities fast enough. So, we're back to speed being a major component.


How fast is fast, by the way? According to Celnet in the past ten years or so, the time it takes to execute a trade on the NYSE has dropped from 3.2 seconds to 48 milliseconds. And that's on a slow day.

Trades can and are routinely executed in fractions of a millisecond, partly depending on how close someone's servers are to the servers that house the exchanges bids and offers.

Feeding the Speed Machine

As I said, the problem (which, don't worry I'll get to, and you will cringe), is systemic. As far as who's involved - which is almost everyone - the exchanges are the biggest purveyors of speed. They feed the speed machine because they get paid to.

For example, in 2010 the NYSE-Euronext opened a $600 million, 400,000 square feet (that's seven football fields) server location in Mahwah, New Jersey, just across the river from the exchange's trading floor.

Why so big? Because they rent space right next to their servers for brokerages and firms and traders that want speedy access to the servers to reduce "latency" (the time it takes to get an order from one spot to another), making super-fast trade executions even faster.

It's systemic because other exchanges do the same for high speed junkies. They get paid to rent space next to their servers; they get paid for each transaction they make. It's about money.

When this all started is quite telling. Starting in 1998, electronic venues were allowed to compete with established exchanges for transaction business, and speed was one of the factors offered as a reason for more competition.

What's interesting is that if you parallel the advent of faster and faster trading, it coincides with the markets essentially being flat over the same time horizon.

Why this is happening is obvious. There's money to be made in pushing speed.

Systemically, the speed game has spawned multiple Wall Street money-making opportunities. Whether it's the exchanges co-hosting trading servers on their premises, or HFT players who now account for between 50% and 70% of trading volume on any given day, or the proliferation of traders and trading desks everywhere, speed equals greed.

So what's the problem with speed and greed? Systems break down when they can't handle it.

Remember the "Flash Crash" in May 2010? How about high-speed exchange BATS blowing up its own IPO on its own exchange because of a technology speed bump?

Or the Facebook Inc. (NasdaqGS: FB) IPO fiasco that imploded because the Nasdaq couldn't handle all the speed orders fast enough? Or that Knight Capital almost said goodnight to its future when its new high-speed software, meant to compete with the NYSE's new kind-of paying for order flow game, blew up in its face?

Oh, and what does Knight do? It buys order flow from the likes of Fidelity, E-Trade, TD-Ameritrade, and a whole lot more outfits.

Speed Kills

What's undermining investor confidence in stocks is that it's all about speed and what Wall Street gets from having the advantage, and what games Wall Street erected to make money from the speed circuit that drives trading.

It's about trading, not investing. It's all about punching out what incremental gains you can in the short term, not about going the distance with safe investments in the long term.

If there are more speed traps, and there will be, markets will collapse one day. When the HFT guys doing more than half the trading on every day the markets are open disappear (as they did during the Flash Crash), and the liquidity they swear they provide dries up like an Iowa cornfield, we'll see how quickly desperate sell orders are executed.

Oh, never mind. Speed won't be a problem if that happens. The SEC, in their infinite wisdom, will shut the markets down with circuit-breakers and cooling-off periods.

Instead of addressing the speed problem, they're going to use a Band-Aid on what will amount to a heart-attack victim.

It happened before and the public knows it will happen again. That's the tragedy. That's why there is no confidence in our markets.

The only way to play these days is to join the short-term trading crowd and not get burned holding onto volatile stocks that, no matter how good-looking, can be turned upside down in a New York minute by the velocity of truth.

And the truth is... speed kills.

If we ever want to fix the markets and make them safe again, we're going to have to slow down the speeding train that's taking us all over the proverbial cliff."

[rk_a2003]

While defending Fed’s previous two rounds of stimulus measures Bernanke said that they created 2 million jobs and supported stock prices.

Mr. Bernanke, We don’t know whether the created 2 million jobs will sustain or not but We surely know that QE’s supported stock prices not only in US but all over the world.

You should know that the QE’s are getting blunt along with the increase in numbers as you are aware that sustained use of steroids will fail to create stimulus.

[vinay28]

even job nos. are rigged