Hi Everyone.

If you were paying attention to the financial news last week, you probably noticed that the usual gang of idiot (thieving) banks got slapped with a $4.7 billion fine for collusion trading.  The short version is they had some kind of forum or Skype group or something where their traders would meet to discuss the next huge moves they were going to lay on the market, all in the name of scoring bigger bonuses for themselves.

One of the guys in our DIAD Skype chat room posted the following about that case, explaining how the banks work against the institutional traders (their real target...we are retail traders and don't even qualify as carbon-based life forms in their eyes, but we can get caught up in the wreckage just the same...study his words...they might keep you out of the next bank stop hunt).

Q:  when u say clear out stops what do u mean?

A:   Banks are selling USD in order to take out institutional trader's stops. Usually done on Monday's or Tuesdays or after a big move downwards. This stop run move doesn't correlate with any news or fundamental release. it moves one way on its own targeting stops at 0050 or 0000 areas.  A very good example of a stop run was on retail sales last month, the stop run cleaned out many, many Stop losses. The more SLs the banks clean out, the lesser they have to pay the institutional brokers (in terms of profits). And in that way, the banks and brokers earn.   This is how why CFTC fined so many banks but they still do it coz FX is unregulated and banks earn way more than billions. So a 4.6 billion fine ain't gonna stop them from doing these stop runs. This is considered fraud in fx.

Q:  how long until the stops are cleared, sometime during london session?

A:  Usually you see, before a big event, like yesterday, there was a big and consistent move against USD for all pairs on friday and monday before ECB Mario speech. Usually before big events, there will be squaring of positions and stop runs to clear out as many traders as possible before the volatile trendy run. Sometimes meaningless stop runs will carry on for a day or 2. sometimes for a week. it depends on the volume of stop losses placed by instituitional traders. The big boys are targeting the instituitional traders. not retail traders like us.

Sometimes using price action and candle stick you can see, if there is no news, no fundamental release, and the move is against the trend, and there are hardly any retraces, you know what is going on. (Italics mine)

End of chat.

Okay, it's me again.  There are some real nuggets there, well worth spending some time reflecting upon.

Now for the non-Forex book recommendation.

I have a friend in Utah named Zach who is a good friend of a guy named Scott Wiser.  Scott has written a book called Vanishing Ink, about a down and out magician who is tabbed by otherworldly forces to save the planet.

It's an illustrated novel, and I was given the chance to take an advanced look at the near-final draft, and this guy actually tells a good story (and this comes from a guy (me) who never reads science fiction or fantasy books and has no interest in that arena).

Anyway, the book is being finalized for publication, and Scott is using KickStarter (a crowd-funding site) to set up advanced sales.  There are electric versions, softback versions, hard cover versions, signed versions, etc.  The hope he has is there are enough pre-sales made that he can get a meeting with Pixar or some other animated movie maker to bring this story to the big screen.

I hope he makes it, because I think it would make a great film.

So I promised him I would share my enthusiasm with a group of people I know who are pretty intelligent and understand the concept of risk (if he fails to hit his goal of $12,000 on KickStarter in the remaining 22 days of the campaign, the campaign closes as unfunded and he does not make a dime for his effort...how about that for some risk?) 

So if you want to check it out, visit his campaign page at:   https://www.kickstarter.com/projects/scottwiser/vanishing-ink-a-novel-with-illustrations  an make sure you scroll all the way down to the bottom of the page.  He has all sorts of information running from top to bottom.

And I hope you find his story (or at least the parts he gives you access to right now) as enjoyable as I did.

Jeff     

P.S.--If you aren't a fan of fantasy/sci-fi, keep in mind that Christmas is right around the corner and this could be a way of getting at least one gift purchased and out of the way for the fantasy/sci-fi fan on your gift list.