A high-tech SME scam. Trader = victim?
What is going on there, dear traders?
Several years ago, I was fascinated by watching the price of corn futures on the CME market, and I began to notice many strange things, which I could not find an explanation for.
I have been making observations on IB's TWS platform for several months.
I studied the history and the current dynamics of trading sessions, trying to catch some regularities in the charts. I managed to catch some regularities and even earned some profit.
However, the main thing I have understood is that the market is controlled by some program, which suddenly and periodically interferes and takes the "cream", creating an incredibly sharp and unreasonable movement, breaking any price formation.
There have been movements, which have broken all the concepts of technical analysis and established new rules of the game, the main one being: "at any moment, there can be a super-fast mega price movement, which will wipe all the stops first at the top and then at the bottom (or vice versa), and will do it in a split second".
It is impossible to predict this movement, but thanks to my careful study of the trading sessions history and its patterns, it became clear that most often the movement occurs in the first and last minute of the session. Also every month - month and a half, exactly at 12:00 p.m. (American session) there was super-duper mega-movement, going up or down by hundreds of pips. At exactly 12:00 (you can check it if you are not sure). At the same time, the session itself could be quiet and low-volatile. Interestingly, these movements were also in other commodity futures - for example soybeans and wheat. I underline - it was at this time.
The super move at 12.00 was different from other smaller super moves, not only in size but also in internal tick structure, which is recorded in the TWS tick history. The smaller moves were multi tick and chaotic, while the super move, was low tick and orderly. Its bar was simply going up or down without committing unnecessary oscillations.
Further...
If you look at the glass throughout the session, you see a lot of limiters. You'd think that thousands of traders are sitting in the market waiting for something. The price can move very slowly. Then it becomes clear that with such amount of Limits, to move the price at least by one pip, you really need thousands of traders. But they are missing. Why not? - You can see it on the chart. Prices are moved by trades with volume of hundreds of contracts. Other deals are in tens of contracts and then some, but they do not move the price. Who trades on a low-volatility market with hundreds of contracts every minute? Why does the corridor continue? Why are there hundreds of Limit orders in the market, if it is obvious that the session is very weak? Who puts them there and why?
My conclusion is simple - if there are few traders in the market, but there is someone who puts hundreds of limiters in the cup, then he simply closes for them any opportunity to move the price at least a point. At the same time, if he makes deals on hundreds of contracts (at least with himself), he will move the price against those who opened their positions and just waiting for the movement in their direction.
Obviously, this scheme exists, the question is, who owns it?
Are futures delivered or settled?
Calculated. You might as well open positions by buying or selling notes. In fact, the trader does not get a contract for future delivery of the commodity and cannot buy anything at a fixed price. Why it is still called futures trading I do not know.
After your words "settled" I have no questions. Settlement futures are orders of magnitude higher than commodity volumes. The commodity market is quite specifically regulated and has nothing to do with supply-demand. IMHO
After your words "settled" I have no questions. Settlement futures are orders of magnitude higher than commodity volumes. The commodity market is quite specifically regulated and has nothing to do with supply-demand. IMHO
You may be very knowledgeable about futures, but the question is not about them, it is about the fact that traders lose their money not to other traders, but to an unknown program owned by the CME corporation, trading against them. They don't stand a chance.
Strange. Commodities have always been deliverable
...The issue is not them but the fact that traders lose their money not to other traders but to an unknown program owned by the CME corporation that trades against them. They don't stand a chance.
Firstly, it is not the CME, but the market makers, and secondly, not any, but normal odds. more than in forex at least.
Moreover, the significant part of liquidity in the market is provided by the same market makers.
Firstly, it is not the CME, but the market makers, and secondly, not any, but normal odds. more than in forex at least.
The market makers also provide a significant part of the liquidity in the market, especially since the same market makers provide a significant part of the liquidity in the market.
This is how I see the secret scheme:
CME has created a robot that works on all of their platforms at the same time. The robot places huge volumes of limiters in the betting market, closing off the ability of regular traders to move the price. Traders open their positions and put stops. The robot sees them. When it opens enough positions to one of the sides, it makes deals by itself for hundreds of contracts and moves the price against traders positions, emptying their pockets. At the same time it creates a lot of fictitious deals of small volume, so that algorithmic traders programs cannot calculate real volume and open interest in the market.
(I tried to calculate it myself, but realised it was impossible).
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What is going on there, dear traders?
Several years ago, I was fascinated by watching the price of corn futures on the CME market, and I began to notice many strange things, which I could not find an explanation for.
I have been making observations on IB's TWS platform for several months.
I studied the history and the current dynamics of trading sessions, trying to catch some regularities in the charts. I managed to catch some regularities and even earned some profit.
However, the main thing I have understood is that the market is controlled by some program, which suddenly and periodically interferes and takes the "cream", creating unbelievably sharp and groundless movement, breaking any price formation.
There have been movements, which have broken all the concepts of technical analysis and established new rules of the game, the main one being: "at any moment, a super-fast mega price movement may occur, which will wipe out all the stops, first at the top, then at the bottom (or vice versa), and will do it in a split second".
It is impossible to predict this movement, but thanks to my careful study of the trading sessions history and its patterns, it became clear that most often the movement occurs in the first and last minute of the session. Also every month - month and a half, exactly at 12:00 p.m. (American session) there was super-duper mega-movement, going up or down by hundreds of pips. At 12:00 sharp (you can check it if you do not think so). At the same time, the session itself could be quiet and low-volatile. Interestingly, these movements were also seen in other commodity futures - for example soybeans and wheat. I underline - it was at this time.
The super move at 12.00 was different from other smaller super moves, not only in size but also in internal tick structure, which is recorded in the TWS tick history. The smaller moves were multi tick and chaotic, while the super move, was low tick and orderly. Its bar was simply going up or down without committing unnecessary oscillations.
Further...
If you look at the glass throughout the session, you see a lot of limiters. You'd think that thousands of traders are sitting in the market waiting for something. The price can move very slowly. Then it becomes clear that with such amount of Limits, to move the price at least by one pip, you really need thousands of traders. But they are missing. Why not? - You can see it on the chart. Prices are moved by trades with volume of hundreds of contracts. Other deals are in tens of contracts and then some, but they do not move the price. Who trades on a low-volatility market with hundreds of contracts every minute? Why does the corridor continue? Why are there hundreds of Limit orders in the market, if it is obvious that the session is very weak? Who puts them there and why?
My conclusion is simple - if there are few traders in the market, but there is someone who puts hundreds of limiters in the cup, then he simply closes for them any opportunity to move the price at least a point. At the same time, if he makes deals on hundreds of contracts (at least with himself), he will move the price against those who opened their positions and just waiting for the movement in their direction.
Obviously, this scheme exists, the question is, who owns it?