The Equilibrium, a key to success!

Big players in the equity, currency and futures markets


Hello dear subscribers,


In today's post we talk about the biggest big players in the stocks forex and futures market. We look at the corresponding sales of the various assets and compare them with one another. Where are the biggest big players and why are they not so easy to identify in certain markets? Why is there a higher probability of winning in one market than in the other and how can you reduce your liability risk? Why do some big players avoid certain markets? These are just a few of the questions we are dealing with today.

I've spoken to a lot of traders over the past few months and I've noticed a few things that I'm going to talk about today. There is still a huge gap between forex CFDs and future traders. From the point of view of some future traders, CFD traders are pure indicator traders who have little idea of the actual market process. Even as a staunch Forex trader, I cannot share this assumption. As a rule, a beginner actually starts trading CFDs and develops into a future trader over the years. First of all, we should know that we only trade with probabilities in the stock futures and forex markets. Now we turn our attention to the profit probabilities in the individual markets. We discover some interesting aspects. In the stock market the loss rate is 91%, in the forex market 90% and in the future market 80%. What is striking here is that a clear, dramatic loss rate is evident in all three markets. In the stock market, the profit threshold quota is around 5%, these are participants who achieve neither losses nor profits in the long term. In the forex and futures market, the profit threshold rate is also 5%. The results are diffrent, when it comes to the profit ratio, in the stock market it is 4%, in the forex market 5% and in the futures market even 15%. This means that the profit rate in the futures market is three times higher than in the forex market and even four times higher than in the stock market. Where do these big differences come from?

The stock market is one of the most difficult markets in the world because it is where most high-frequency traders are up to mischief, there is little liquidity in the limit orders and this automatically results in higher volatility. In addition, you need very special knowledge, especially in the area of business figures such as balance sheets and much more. There are many unfair brokers in the forex market, and price manipulation is still taking place abroad. Likewise, high spreads prevent a reasonable profit ratio. The decisive factor, however, lies in the lack of volume, which does not give the trader any insight into the depth of the market. At first glance, this speaks absolutely in favor of trading in the futures market, but there are also decisive points that speak against it. First of all, there is a disproportionately high liability risk in the futures market. With a Black Swan, the risk per one lot is around € 25,000 with which you can run into the red. This minus must then be compensated. In the forex market, this liability is limited to the account balance. You can trade with microlot in the futures market, but this is not recommended for beginners as they can trade from 0.01 lot in the forex market. The account size in the futures market should also be at least € 20-30,000. In order to generate a deep market insight, professional software and a corresponding data feed are required. This may cost an additional 1000 € per year. In addition, the price movements in the futures market are not as finely tuned as in the forex market. This makes it difficult to identify crucial price ranges, especially when scalping. Likewise, there is no currency strength in the future market that we have often talked about in my videos.

The largest asset in the stock market is the Apple share, in the forex market the EURUSD is the leading player and in the future market the S&P. We compare the Apple share in the stock market and in the forex market, the S & P in the forex and future market and the EURUSD in the forex market with the euro FX in the future market. Apple shares a daily volume of 65 million, with a price of $ 121. That's equivalent to a daily turnover of $ 8 billion. With an average lot value of € 100,000, Apple shares would trade 80,000 lots per day. The S&P Future has a volume of 2 million per day with a contract value of 20,000. This corresponds to a daily turnover of $ 40 billion and the averaged lot value is 400,000. The S&P in the Forex market has a volume of 3 million with a contract value of 20,000, which corresponds to a turnover of 60 billion. The averaged lot value is 600,000. The Euro FX in the futures market has a volume of 200,000 with a contract value of $ 125,000. This corresponds to a daily turnover of $ 25 billion, the averaged lot value here is 250,000. The euro US dollar in the forex market reaches a volume of 23 million with a contract value of $ 100,000. This corresponds to a sales volume of $ 2.3 trillion or 23 million lots. Let's compare the number one in the Forex market with the number one in the futures market.

While 400,000 lots are traded daily in the S&P Future, the euro US dollar comes to 23 million lots. The total volume is almost 60 times larger. Now let's look at the distribution of the 100 largest big players in these markets. The 100 largest big players have a turnover share of over 80% in the euro US dollar. That means on average each of these big players trades 183,000 lots per day. The 20 largest big players achieve a 40% share of sales. On average, each of these big players trades 460,000 lots per day. This means that the remaining 80 big players still achieve an average turnover of 100,000 lots per day. In the S&P, the distribution rates are not quite as extreme as in the euro US dollar. On the one hand, this is due to the fact that the S&P predominantly has a large number of institutional traders who are more evenly distributed in their capital structure. Of course, for us retail traders, an institutional trader is big, who trades $ 360 million a day in the S&P. But these institutional traders are small compared to the real big players in the euro US dollar.

The 20 largest big players in the euro US dollar are able to trade the entire turnover of the S&P per day. I believe that you can see that it would make no sense for such a big player to act in the S&P. This is roughly comparable to when we go to a casino to win at the ATM and have a few million with us. The machine would not be able to process that much money that day. Let's take a look at a graphical size comparison. The share of EURUSD in the total forex market is 29%. The USDJPY comes in at 14%, the GBPUSD at 9%, the AUDUSD at 6%, the USDCAD at 5% and the USDCHF at 4%. In 15th place comes the USDCNY with a share of 0.5%. And that is exactly the size of the S&P in the futures market. So far this was probably not so well known because there is no real volume in the forex market.

As we know, the foreign exchange market was founded many decades ago so that banks could operate independently of the stock market and at very low cost. The banks have not thought of opening up this market to private investors one day. Likewise, the origin of the futures markets did not actually lie in speculating on the market as a whole with greater leverage. Futures markets were only used, to secure a price today that could be bought or sold in a few weeks or months. This was particularly important in the area of raw materials and also for crop failures in wheat. This has changed significantly to this day, since with futures and derivatives, short-term speculation is increasingly in the foreground.

The question that arises: does the futures market influence the foreign exchange market or does the foreign exchange market influence the future market? If someone buys arithmetically massive DAX futures, the DAX is initially not automatically affected. Because the DAX is the arithmetical result from the prices of the 40 stocks listed in it. But what would happen if the DAX future rose by 100 points but the DAX itself did not? And it is precisely these differences that are permanently balanced out using what is known as arbitrage. Large arbitrage traders take advantage of these differences at lightning speed. And so the futures markets and the strike prices on which the futures contracts are denominated are inextricably linked. And it is precisely for this reason that S&P Future and Forex, for example, have almost tick-accurate, parallel courses. This makes it possible to use exchange data from the Euro FX to make clear predictions for the EURUSD currency market. But which market influences which one?

If we compare the Apple stock in the future market with the Apple stock in the forex market, the turnover in the cash market is less important. Therefore, the future market will clearly be the driving force here. The turnover in the S&P Future and Forex market is similar, so both markets will influence each other equally. The cash market is the clear leading factor in EURUSD. Of course there are also influences from the futures market, but this is immediately offset by the arbitrage. The fact is that the markets influence each other, which should also be taken into account in trading. The main reason why I only trade the EURUSD in the forex market is the clear distribution of sales among the 20 largest big players. These big players rarely get in each other's way because they know exactly what the other is up to. This inadvertently creates a joint consortium of big players who are thus heading in a common direction. That enables me to identify the big player even better.

In my charts I use specially programmed limits to show me exactly the limit orders that will be relevant in the future. We see that the big players collected bids on the high with larger limit sell orders. The price was pushed down a bit and the bid collection was continued within the new equilibrium. Now the price has been pushed down again and we can see that this time bids were still being collected in two different equilibrium zones. At first there was a little stop hunting, then the course was pushed down. There was once again a short post-buy in the limit sell area and then larger limit buy orders were used, with which the big players got out of their dollar position. In principle, the process is always the same.

A little tip, I know some market participants who basically filter the 1 lot of sales out of the Time in Sells list, because they are insignificant from their point of view. Interestingly, the big players are precisely those who use these 1 lot orders massively within their cumulative orders to push the market in a certain direction, or to include corresponding stops by retailers with their limit orders. Here we see a cumulative market buy order with 11 lots. In the individual display within the Times and Sales list, 75% of this order consists of 1 lot contracts. The cumulative market order with 15 lots consists of 50% 1 lot contacts. And last but not least, a market sell order with 22 lots, which contains nine individual 1 lot contacts. It is precisely these 1 lot of contacts that are used in the market order area in order to be more difficult to identify in the market. In this overview, 121 lot market buy and market sell orders came into the market within 3 minutes, all of which were of course also taken up by limit orders. The number of contacts in the limit area that was interesting for me was only 48 lots. This is important in order to find out what the big players are collecting more. We have talked about this many times in my videos.

For me, a very decisive advantage in the forex market is the higher volatility within the candles, as the futures market moves 7-10 times less in the same period. As a result, significantly more information is passed on within my Bionic candle that helps me in daily trading. Since the beginning of the corona crisis, the big players have started carrying out various experiments in the EURUSD. As we know, your biggest disadvantage is that you often have to collect Ask or Bid for hours or days that can only be made possible by very complex stophuntings. In the last few months, new and interesting strategies have been developed, which have been backed up with appropriate algorithms. We will take a closer look at the strategies they use to carry out their collection campaigns in one of my next videos.

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I wish you a great and relaxing weekend, next week a lot of success in retail and I look forward to seeing you again soon.

Kind regards Michael

Reasons for Algorithm Profiling

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Hello dear traders,


In today's post we talk about why it is important to perform algorithm profiling. We use an example to analyze the average sequence of a big player collection, up to and including the exit. Likewise, I'll show you the clear benefits of algorithm profiling and why this is the future. Most traders dream of the holy grail, but in the field of algorithms, we are getting very close to this holy grail. We know: on the stock exchange there is only compensation for pain and suffering - first comes the pain, then the money! But for this you need an approach that is only used by a few market participants. This increases the probability of winning and gives us an enormous market advantage.



The video is of course produced in 4K again and you can have the spoken text translated into English on YouTube. Of course I will translate the text for you later and post it here tomorrow at the latest.

I wish you a lot of fun watching it and a nice and relaxing weekend.

Greetings Michael

Reasons for Algorithm Profiling



Hello dear subscribers,


As promised, I translated the content of my new video for you. You can find the video again at the end of the article.


In today's post we talk about why it is important to perform algorithm profiling. We use an example to analyze the average sequence of a big player collection up to and including the exit. I will also show you the clear advantages of algorithm profiling and why this is the future. Most traders dream of the holy grail, but when it comes to algorithms, we are getting very close to that holy grail. We know: on the stock exchange there is only compensation for pain and suffering - first comes the pain, then the money! But for this you need an approach that is only used by a few market participants. This increases the probability of winning and gives us an enormous market advantage.

I can still remember when I started trading in the forex market 12 years ago. One day I found an indicator that was relatively simple. It only produced a yellow and blue dot. So I did what had to be done. With the yellow dot, all you had to do was take a long position and wait. As soon as a blue point appeared, the long position should be left and a short position should be opened at the same time. Wow, I thought that’s so easy. As soon as a yellow point appeared, the short position had to be left and a long position had to be opened at the same time. And that's exactly, how one could happily deal with the individual zigzag zones all day long. From 6:00 a.m. to 6:00 p.m., it would theoretically have been possible to achieve 160 pips times five lots, because you don't want to be too greedy. This results in a monthly income of € 200,000 for 25 trading days. At that time I was still thinking about writing an EA for it, otherwise I would not have had time to spend all that money, as many shops close at 8:00 p.m. How that ended in the end can of course be imagined by anyone. This was a repainted indicator, which although deposited a blue point, but also deleted it again if the price continued to rise. In principle, this indicator is like a defective watch, after all, this watch shows the correct time twice a day. Many years later I came across this indicator again in the futures market, but this is not an indicator that deletes the points or arrows that were once placed. At first glance this seems tempting, but on closer inspection in the M1, you would have incurred losses ten times in a row, which you would not have recovered in the subsequent downward movement.

Quite a few traders have reached their limits in search of the holy grail. The assumption arises again and again that there are recurring patterns in certain situations. But the truth is rather sobering. The fact is that unfortunately there are no samples in the price. There are also no patterns that are triggered by messages. There are no patterns in the candles, because the candle is a statistical coincidence that arises from time and price. Logically, there can be no patterns in the indicators, since an indicator in the Forex market mainly follows the price. Even in even price levels, we do not find any clear patterns. Also not in an equilibrium that 70% dominates the market. Not even in the all-important currency strength. Even if we analyze the exchange data from the futures market, we cannot find any clear patterns within the volume. The only last anchor left for us is the cathedral and the T&S list, but unfortunately I have to disappoint you, because there are no clear pattern sequences either. But there are clear patterns in the algorithms, i.e. in the orders with which the big players control their limit and market orders. The algorithms have different tasks, on the one hand to place actual orders and on the other hand, for example, to identify stops or to play an illusion on the market. In order to represent these algorithms, a time-consuming creativity is required to highlight certain factors. From this, clear patterns can be identified in the limit orders or the key candles can be displayed with my Bionic- candle. The fact is that there are clear patterns within my individually programmed tones. You can find more information on my channel. Samples are also available within spoofing, from which clear future price developments can be derived. Let's look at some examples of algorithm profiling so that it becomes clearer. To do this, we look at a process that takes place at an airport, which runs in the same way over and over again.

We see an empty airplane that has docked at the gangway, I would like to equate this with a big player entering the market. There are different factors to identify this market entry, such as a stronger increase in limit orders. When an aircraft is docked on the gangway, what conclusion can we draw from what will happen next? Well, most likely the passengers will be boarding in a moment. And that's exactly what happens then. Let us imagine that the passengers represent the orders that the big player collects within the equilibrium. We can recognize this in the market, for example, with specially filtered limit orders that are increasingly increasing on the ask or bid side. What will happen when all passengers are on board? Now the plane will go to the runway, as if we had suspected the plane was taking off. The big player has now completed its collection campaign and is starting to push the market. Not in the direction we expected, however. This can be recognized by the fact that the strength of certain limit orders is above average. When an aircraft has taken off, in most cases it has to make a 180 ° turn in order to clear the airspace at the airport. This is comparable to the stop hunting that the big player now carries out in order to stop the traders who are oriented in his profit direction. The strategy used for this is very interesting, which we will take a closer look at in my next video. Now the aircraft begins to climb in order to reach the necessary cruising altitude. In this phase, the big player begins to push the price towards profit. This can be seen from the pulling of the limit orders so that his market orders get through more easily.

On the flight there is now stronger turbulence, the pilot decides to fly under this turbulence and reduces the cruising altitude. In this situation, the big player decides to sell the push orders that he previously used to push the market in his profit direction. This creates a small pullback. This can be recognized, for example, by larger absorptions on the limit side, also known as stacking. The turbulence is over and the aircraft starts climbing again in order to reach its optimal flight altitude. After the pullback, the big player pushes the price back towards profit. We see this in the area of void execution, where sizes are permanently taken out of the market to make it easier for market orders to get through. The aircraft is now almost at its destination and starts to land. In this phase, the big player prepares for the exit, few push orders come from his side, there is hardly any stacking in the profit direction. After the plane has landed, the passengers now disembark. While most market participants are now moving strongly in the direction of the trend, the big player is taking the opportunity to get out of his positions with increased stacking. After the passengers have disembarked, the aircraft is cleaned and possibly even serviced. The big player has booked its winnings and may be out of the market. The number of limit orders is now falling significantly. Of course, it also happens that the big player gets involved again in a re-accumulation or distribution phase.

We have now seen a schedule for a big player. Each of these individual phases is accompanied by different algorithms that have been individually programmed for the respective situation. Each phase is an individual program that controls both the limits and the market orders. Each of these programs has individual patterns that appear again and again in the same sequences. Everyone can understand the following situation. When I enter the market, it would be a great coincidence if the big player entered the market at that very moment. So that will usually not happen. Now let's assume that I come into the market and realize that the big player is just starting his stop hunting. What is the advantage of this? First of all, I can use the patterns in the algorithms to check whether it is actually stop hunting before an outbreak. And now I have the decisive advantage that there is a high probability that I know what will happen next. However, I don't know the exact time yet. With the help of the algorithms, I can read out the point in time at which the big player begins to push the price towards profit and thus significantly increase my probability of winning.

Algorithms are not that easy to program, so it can be assumed that they will be used for many months before they may be optimized or changed. But you get that out relatively quickly and can adapt accordingly to the new situation. Precisely for this reason, one should work in markets that have an unevenly distributed share of financially strong big players in the upper range. You can find more information in my last video: Dominance of the big players. Most people at the airport do not even notice what is going on outside on the tarmac, while the tower has a complete overview of the airport. It is the same on the stock market - most market participants do not know what the big players are doing. So if you want to have the right overview, you have to sit in the tower. For me, this tower is a strategic algorithm profiling, in different market sequences. We have already talked about that.

I have already presented the identification of my special limit orders in many of my videos, this is a rough overview to see in which area you collect or exit. The bionic candle, the strength of the limit orders, pulling and stacking, sell and buy pressure, up to the currency strength are just some of the information that comes together on my 75 inch main screen. The sole aim is to increase the probability of winning through an effective assumption. Scalping is also very beneficial in this area. As Karl Meyer Rothschild put it so nicely: on the stock exchange you have to behave like bathing in cold water, jump in and quickly out again. One of the clearest goals that we are wrong with a trade is to feel right. And that's exactly why I prefer to rely on algorithm profiling. It's like a kind of navigation system to know exactly where we are. We will go even deeper into the field of algorithm profiling in the next few months. In my next post we will first talk about some as yet unknown big player strategies that have just been carried out as experiments in the EURUSD due to the corona crisis and are now increasingly being used.



I wish you a great and peaceful weekend and I look forward to seeing you here again soon.

Kind regards Michael

Bionic Chart - The easiest forex navigation


Invitation to a large project at Forex Factory


Hello dear subscribers,


First of all, I would like to thank you all for your ideas, contributions and constructive statements with which you have supported this thread over the past few years. Since there were some uncontrolled inquiries and statements from people who were not subscribers to this thread, I have restricted write access to the high impact members. To be honest, I had no inclination or time to deal with people who wanted to disrupt this thread with their actions. Nevertheless, all subscribers could reach me at any time via PM.

As you know, I had the idea of a new candle display 6 years ago, which I made available to all traders free of charge here in my thread 2.5 years ago.
My idea of the Bionic candle has also been downloaded several thousand times. From my point of view, most traders do not know what opportunities this indicator contains and that is completely understandable because if you do not know the advantages exactly, such an indicator is worthless. When I developed this indicator, I didn't know what the potential was. In the last 30 months I have dealt with it very intensively together with some friends and I am ready to share my findings with you.

For this I started a big project and started a new thread:

Bionic Chart - The easiest forex navigation

https://www.forexfactory.com/thread/...6#post13748646


So that you get an idea of what exactly this is about, first take a look at my two videos that have been posted in this new thread. Write authorization is released in this thread for all participants who take part in it. The project will be exciting and challenging, you can get the exact information in my new thread.

I would be very happy if one or the other of you would participate. In my thread: Equilibrium, the key to success, everything stays as usual. Once a week I try to translate my German-spoken videos from YouTube into English especially for you. A stronger exchange will probably take place in the new project, where we will only talk about topics related to the Bionic Chart.

I look forward to seeing you in the new thread

Kind regards Michael

A big development, indeed! I just hope that you are not driven mad by the result of opening up the thread to all!

Hello Lem,

Thank you very much, I'm really looking forward to the upcoming process and I hope I don't regret it . Basically, I believe that if you treat each other in a constructive and fair manner, a lot of possible complications are limited from the outset. Of course there is always an idiot in a large sandpit who throws dirt at the others or takes the shovel away from them. We then take the shovel from this troublemaker, just put him out of the sandpit and he is no longer allowed to play. We already had one or the other example in my blog that we could solve elegantly together. One just have to react quickly and efficiently. 99% always work fairly and cooperatively with one another and will ensure that the sandpit stays clean. I wish you a successful trading week, best regards Michael

New strategies from the big players




Hello dear traders,


As promised in my last video, today the focus is on the approaches of the big players in the market. First of all, I would like to emphasize that I am only referring to the big players in the EURUSD currency market, as they are demonstrably the largest in the market. In recent years (especially during the Corona crisis), many experiments have been carried out in EURUSD, with the result that the largest big players have partially completely changed or adapted their future strategies. We will look at a few examples of this.




The video is of course produced in 4K again and you can have the spoken text translated into English on YouTube. Of course I will translate the text for you later and post it the next few days.

I wish you a lot of fun watching it and a nice and relaxing weekend.

Greetings Michael

New strategies from the big players



Hello dear traders,


As promised in my last video, today the focus is on the approaches of the big players in the market. First of all, I would like to emphasize that I am only referring to the big players in the EURUSD currency market, as they are demonstrably the largest in the market. In recent years, many experiments have been carried out in EURUSD, with the result that the largest big players have partially completely changed or adapted their future strategies. We will look at some examples of this. Before we go deeper into this topic, I would like to address a very important point that could be very interesting for you in the future. Three years ago I developed a new candle chart, which I have already presented on this blog.

It's about the Bionic Candle, which is more focused on the institutional approach to identify retailers' stops. This modern candle, adapted to the zeitgeist, provides seven times more precise information about the candle strength than the normal candle chart. In this way, you can specifically identify zones of how far a price runs in a certain direction. Likewise, possible turning points in the course can be identified in advance. The advantage of this is that I can plan my trades in advance and whether the resulting risk-reward ratio is worthwhile. The Bionic candle works in all time charts and you can of course continue to work with your usual setup. Since we haven't gathered all the advantages of the Bionic candle yet, I have set up a project group on the world's largest trader platform, Forex Factory. At the beginning of this week the call went out and so far a lot of successful traders have signed up for this project. The videos in English that I specially produced for this purpose have been viewed over 3000 times in the last few days. This shows how interested traders are in this Bionic Candle. I would be happy to invite anyone of you who would like to take part in this project. Of course you will receive my new, developed bionic indicator for free, but it was only programmed for the MT4, as it does not give as precise information in the futures market as in the forex market.

Anyone who has seen my last videos has already been informed that the big players have to collect in the accumulation or distribution phases in order to then turn their orders into a profit. Within these accumulation or distribution phases, an equilibrium arises that 70% dominates the market. Only in 30% of all cases do stronger movements actually occur. First, let's look at a scenario in EURUSD. The price comes from above and an equilibrium now arises on the low, where the big player collects the euro in an accumulation phase. For this he needs Ask, which he takes primarily with his limit buy orders. Then there may be stop hunting and the price will be pushed up. Now an equilibrium arises again, where the big player collects further questions in a so-called re-accumulation phase. There may be another stophunting before an upward breakout. Now the price is being pushed further up and at this point more and more buyers are entering the market. The big player uses this opportunity to exit the euro position with his limit sell orders. Now an equilibrium arises again, with a distribution phase taking place there. That means the big player buys the dollar there. There may be another stop hunting before the course goes down. On the way down, the short traders are repeatedly taken out in a pullback. In the next equilibrium there will be a re-distribution phase, where the big player will continue to collect the dollar. In the now continuing downward movement, it is now gradually rising out of its dollar position. But there is not always a re-accumulation or re-distribution phase with the big players. Let's look at an example of this. The big player collects within an accumulation phase and pushes the course upwards. A few hours later he gets out of the euro and is out of the market. First of all, we have to know that in 80% of the cases that big players carry out a collecting campaign. This approach is very time-consuming and he also has to defend his acquired positions.

Perhaps you have already wondered why a course always zigzags. Let's take a look at what a big player usually doesn't do. First we see an accumulation in the equilibrium again with a subsequent stopfishing. After that, the course will be driven upwards. Up there, the big player would like to get out of his position in the best possible way, but that will not be possible and why we are looking at now. If a big player collects 500 Lot Ask in the accumulation phase, he must then push the price upwards. To do this, he will of course first place iceberg orders on the limit sell orders and withdraw them before pushing the price up with market buy orders. Nevertheless, he also needs 3-4 times as many ask to push the price up. At the high, the big player would now have 2500 lot bids, which he now has to sell to traders who believe in a further upward movement. Of course he will try to push the price down in order to then get the stops of the short traders to get out of the euro. But there is a small problem and that is the time, because it takes a few hours to collect 500 lots. That means it would take five times as long to exit.

For this reason, he tries to collect 500 Lot Ask in an accumulation phase and the 2000 lots he needs to push the price up are sold again and again along the way. That is also logical because these 2000 lots only result in an average profit, since he did not acquire them at the low. In addition, it would take him far too long to get out of 2500 lots. This is precisely why this approach does not pay off. It is best to get in on the low with 500 ask and get out on the high with 500 bid. And now let's see how it works best. Initially, 500 lots are collected in the accumulation phase. The course is pushed up. To do this, he has to shoot a certain number of asks into the market. Now the first stops of the short traders are triggered and drive the price further up. Now the big player is selling the ask that he used to push the market up. The 500 Lot Ask that he collected in the accumulation phase are not affected. Now the course is pushed down. This has two advantages, firstly he sells his ineffective ask and secondly he gets the long traders out of the market. He has to get the long traders out, because the moment they get out profitably, they would hold the market up.

And now the game starts all over again, press briefly upwards and then sell the ineffective ask. The game will now go on until either a massive number of long traders enter the market or enough short traders are stopped out for the big player to get out of his position. Of course, he could also push the price further up and try to get out of the equilibrium that then arises, but this is a great risk as the market could fall more sharply in this area. Let's take a look at an exemplary price trend. The rate is coming from above and we are seeing an exit from the dollar here. In the subsequent equilibrium, the euro is collected and then there is stop hunting. The rate is being driven upwards and the euro is being bought. Then there is another stop hunting because there were too many long traders in the market at this point. The price is going up again and the big player is getting out of the euro. Here we are now seeing an entry into the dollar and the rate will continue to be pushed up. Here, too, the dollar is still being collected, but the volume in the market is not always that high, so that the big player cannot collect as much bids here. Now we see a strong downward movement triggered by the long traders. In the subsequent equilibrium, the main collecting point takes place in the dollar area and the rate is now moving more sharply downwards.

Let's talk again about these three crucial movements and how they came about. In stop hunting, the big player initially invests a large number of market sell orders. These trigger the first stops of the long traders, which creates a downward chain reaction. At the low, the big player sells the dollar, which causes the price to rise massively again. With this approach, the big players take smaller and smaller partial profits with them. Here the big player sells his unneeded ask orders and also invests brand sell orders. At the low, the dollar is sold in the form of market orders, driving the market back up strongly. In the latter case, the big player pushes the price into the stops of the long traders with massive market sell orders. This creates a massive downward breakout. Here we can now see the main meeting point, where the big player collects another bid with limit sell orders. The market sell orders that he invested from the high to trigger the downside breakout are of course not sold because they are above the main focal point.

As I explained in detail, there are three basic strategies. We have already discussed collecting in the accumulation phase in great detail. The second option is to make volume available to yourself. This works very well, for example, with a currency exchange from a large customer or in which the big player opens a hedge position at the same time. Two big players were involved in this calculation, which is why each big player only gets 9,000 ticks per hour. The third possibility, here the price is simply pushed up and the market sell orders are sold in an upper equilibrium. This approach is not as efficient. In my research at the time, we were able to determine that collecting within an equilibrium phase and making self-volume available produced similar results. The reason why the big players are making more and more of their own volume available is the fact that they are on the market regardless of the volume. Because they need a high volume when they join and also when they exit. Let's us see how it works. The big player invests 1000 lot market buy orders which he accepts at the same time as his own 1000 lot limit sell orders. He pushes the price down and exits the dollar position at the low with limit buy orders. The big player is now pushing the price massively upwards, with the short traders being stopped out here. After that, the price slowly goes down and it is here that it collects more ask. Now he tries to push the price in the direction of profit, again the short traders are stopped. Here, too, there is a strong breakout candle, because everyone thought it was going short here. By the way, you can identify these zones beforehand with my Bionic candle. In the end, the big player got out of his euro position and made a good profit. In order to know what is happening in the market at any time, I work with specially created limit orders that inform me about the current situation.

In summary, it can be said that the big players are increasingly entering the market through their own liquidity that they make available. This saves you an enormous amount of time and you can make a profit much faster with this measure than with a normal collection campaign. We will of course talk more about these strategies over the next few months. Incidentally, I would be very happy if I could welcome one or the other of you to my project at Forex Factory.



I wish you all the best in trading.

Kind regards Michael

Introduction to algorithm profiling



Hello dear traders,

My last videos gave you a deeper insight into my approach. In today's post we will talk about getting started with algorithm profiling, analyzing the pros and cons, and how you can potentially use this information for yourself. Basically, I would like to emphasize once again that I do not claim to be correct, as it is only my personal opinion. A trading setup always requires an individual approach that every trader has to find for himself.



The video is of course produced in 4K again and you can have the spoken text translated into English on YouTube. Of course I will translate the text for you later and post it here.

I wish you a lot of fun watching it and a nice and relaxing weekend.

Greetings Michael

Hi Michael

Very true - pity so few understand this and fall for all the "flashy/guru" stuff first.

Trade well / Mos

Introduction to algorithm profiling



Hello dear traders,

My last videos gave you a deeper insight into my approach. In today's post we will talk about getting started with algorithm profiling, analyzing the pros and cons, and how you can potentially use this information for yourself. Basically, I would like to emphasize once again that I do not claim to be correct, as it is only my personal opinion. A trading setup always requires an individual approach that every trader has to find for himself.

The stock market is over 600 years old and during that time millions of different approaches have been tried to beat the market. So far, nobody has managed to do this and that will probably not change for the next 600 years. The reason for this is simple, because the world's greatest players are always one step ahead of retail traders. On the one hand, this is due to the fact that they are in the market every day with a large team, use the best technology and move the greatest capital in the process. A retailer is not organized, works with simple technology and does not have a lot of capital. These are two completely different worlds that also require different ways of working and therefore it is very clear that most retail traders do not know how the big players work.

It is frivolous to believe that with little experience, a laptop and indicators, you stand a chance against these big players. The fact that so many retail traders lose is not because they are incompetent, but rather because they do not know who they are actually trading against. You sit in front of your laptop at home and watch the candles move up or down. Very few have any idea what is actually going on in the background at the banks. These big players from large banks and institutions are very professionally positioned. Countless traders sit in air-conditioned rooms with the latest screens supported by an armada of analysts. All information comes together in a central location, where the strategies are distributed as individual orders to the different traders. And we all know only too well that an army is always stronger than a single person. Thus, retail traders' losses are primarily due to the fact that most of them overestimate themselves. In addition, there is the fact that the Internet leads us to believe that it is an illusory world that does not actually exist. You only ever see the profits and successes that the individual traders achieve with ease. As soon as you start trading yourself, you realize how difficult it is and quickly start to doubt yourself. It was no different for me, but I had the advantage that at the beginning of my full-time activity as a trader, I was not dependent on income. That took the pressure off me to work with disproportionately high risks.

It is known that 90% of Forex traders lose their money, 5% are breakeven and the remaining 5% win more than they lose. For this reason, trading is not about winning at the beginning, but rather about losing as little as possible. In our upbringing, we are trained to be a winner, which is why very few admit that they make losses on the stock market. Unfortunately, the laws on the stock exchange are a little different than in normal life. Losing is the order of the day here and that is completely normal. For this reason, a trader's focus should be primarily on breaking even. When you break even, you win money and lose it again, but overall you don't slide into the red. When you consider that only 10% of all traders are in or above breakeven, it should be clear to everyone how difficult trading actually is. Still, it can be learned like any decent job, but don't forget how long it takes to learn a real job. So if you lose as much money as you win in the long term, you belong to the 10% of the best retail traders in the world. And those who win more than they lose in the long run belong to a small minority of 5%. By the way, only 2.5% of traders can make a living from their earnings. And that alone already proves that trading successfully is anything but easy. And anyone who claims the opposite has been very lucky or is just a trading coach.

I started trading in the forex market eleven years ago. Since this market does not provide any information about ask and bid, volume or deltas, I would like to call this type of trading a walk in the dark. Getting started in this market is indeed a huge challenge and I admire any trader who breaks even in this market. Since the profit rates in the futures market are three times higher, a beginner would actually have to start there in order to switch to the forex market as a professional with stock market data. But mostly it's the other way around. Many start in the toughest market in the world and fail to achieve their goals. For me, the future market is like driving a kart and the forex market is Formula 1. Of course, theoretically you can also learn in a Formula 1 vehicle, but it is much more difficult than starting with karting. I do not want to denigrate the forex or future market here, after all, I work in both markets at the same time. You will find a lot of information about the advantages and disadvantages of the forex and future market in my videos.

Regardless of which market you choose, the most important point is to understand how the big players operate. And that has nothing to do with an indicator. Most of the indicators are derived from the price, so in the end they don't show more than the candle itself. Since the indicators are lagging, this even means that the information often comes a little later. Retail traders never move the markets when they enter because they never enter at the same time. But they move the markets when they are stopped out by the big players, since their stopzones are always similar. Exactly for this reason, these stops are a crucial feature in order to increase your trading efficiency. This factor can be read out well with my Bionic Candle and important key zones can be created from it. For this I have just started a project in which each of you can participate. You can find information about this in my video: New Big Player Strategies.

At the beginning I also looked for different patterns, but with the data that is made available in the forex market it is very difficult. Likewise, there are no patterns in the DoM, the T&S or in the volume. With the Bionic candle we can find the key candles, but then we still don't know how far these key candles will go and when the course will turn again. With my self-created limits delta orders, I can clearly see what the big players are collecting, but I don't know exactly when they will start pushing the price in their profit direction. The samples within the spoofing give me more information about what is happening in the market. The limit orders placed on the market are anything but the truth, because stacking or pulling means that they are added or subtracted within seconds during spoofing. For this I have programmed my own tones in the 1 ms range, which give me additional important information. There, too, there are clear pattern sequences that appear again and again in certain situations.

Since the algorithms are responsible for placing the limit and market orders and combine them with one another, algorithms that run the same time and again take place within a trading sequence. Thus there are also clear patterns in the algorithms that can be analyzed and read out with a little experience. This is not a Holy Grail either, but it often brings a clear market advantage above average.

Now you just have to combine these things with each other in such a way that a clear map emerges that shows the retailer where the market is currently. This enables you to react before the small breakouts. You can also find a good example of this in my video: Reasons for trading algorithms. The prerequisites for dealing more closely with trading algorithms are first of all the appropriate technical equipment, which, with some knowledge, can be set up for € 4,000. It is important that the entire system is precisely tailored to the setup, otherwise it will be expensive. In addition, one need an Internet with very good ping times, a cheap forex broker that is precisely tailored to the stock market data, special stock market software with individually programmed chart views, a sound card with specially programmed tones and corresponding loudspeakers, for the 1ms tones.

The next step is to understand how the big players operate and why they work the way they work. This procedure not only has to be clearly understood, but also recognized on the screen in the long term. Time and again, different situations arise in the market that can be clearly identified. With the help of the Bionic candle you are able to calculate a possible trade in advance. This is precisely what is important with regard to the probability of winning in combination with the RRR. To do this, you first have to train very intensively and you need clear guidelines. With special tools you can see how far you are from your breakeven point. With the then individually compiled setup, the goal is to complete 10,000 trades until you have reached your breakeven point. As a minute scalper, this is not a problem either, as you can do up to 40 trades in the evening as part of your job. In addition to all these factors, it must be ensured that the loss from these 10,000 trades does not exceed € 500. We will talk about all of these things in great detail over the next few months. A decisive point, why I have also concentrated more on algorithm trading in the area of seconds scalping, is the above-average profit rate, which makes the new trader tax reasonably bearable. If you want to learn more about these things, I am happy that you are there.





I now wish you a nice weekend and a lot of success in the trade.

Best regards Michael.

Hello Mos,

In principle, trading can be compared to driving a Formula 1 vehicle. Here, too, each driver works with his own setup that is not suitable for other drivers. This is probably why there are no coaches who teach a driver how to drive Formula 1.



In 2004 I was with some friends in Monaco for the Formula 1 race. That's where I took these pictures. Schumacher had to give up the race on lap 46 after a collision with BMW Williams driver Juan Pablo Montoya. The accident happened during a safety car phase. During this period, overtaking maneuvers are actually prohibited, but last year's winner Montoya still drove up. Schumacher, who, as the leader, had driven directly behind the safety car and had braked heavily before the crash, crashed into the wall in his Ferrari in the port tunnel and had to park his vehicle in the Ferrari box a little later. The left front wheel was kinked and the nose was badly damaged. Michael Schumacher was not thrilled as you can see in the picture.

Greetings Michael

Bionic Candle MT4, MT5, Tradingview



Hello dear Bionic Traders,


Since I am repeatedly asked whether the Bionic Candle will also be available for Tradingview or the MT5, I have decided to deal with this topic in detail. Since it directly affects the Bionic Candle, this is important to me. First of all, I would like to make it clear that all of my statements or allegations made here are based solely on my personal opinion, have no claim to accuracy and do not serve to downgrade or denounce the MT5 or Tradingview platform.

There are around 5 million retail traders worldwide, and MT4 still has a market share of 80% in the Forex CFD area. Although the new MT5 was launched in 2010, the market share is 15%, while Traderview only achieved 0.6%. This means that my MT4 programmed Bionic Candle covers the largest group of traders in percentage terms.

Of course, the MT5 is more modern and also faster, although this statement does not apply to me because I have tested it. This is possibly due to the high performance of my workstation and the ping values of 3-5ms that my 1 gigabit fiber-optic line can achieve. In the last 10 years, many traders have created special auxiliary indicators in MT4 that cannot simply be ported to MT5. As long as there are no simple solutions for this, the market position of the MT4 will not change significantly. Another point is a virtual stop loss that I basically work with, which is not visible to the broker. In addition to the currency strength, my pip per minute indicator and countless other auxiliary indicators, the effort would be disproportionately high to completely reprogram them. My platform is very stable with no problems. Never chance a winning team. Forex Factory has the best and most professional MT4 programmers in the world, but unfortunately very few MT5 programmers. Now everyone can consider whether they want to work with a modern MT5 platform but at the same time have to be prepared to forego their crucial MT4 indicators.

Tradingview is a social media network, an analysis platform and a mobile app for traders and investors that was founded in 2011. The few 30,000 customers to date clearly show, that this platform has not been able to assert itself clearly in the market. Incidentally, the MT5 has found 750,000 users in the same time. A big advantage of using web-based chart software is that you can monitor different prices anytime, anywhere, in real time and with mobile devices. And Tradingview promises just that and even more.

First of all, I can understand that a web-based platform, especially with younger people, is well received due to its flexibility. This is also possible with a VPS server. While you were just trading in front of your screens in the office, you can now continue to watch the prices on the display in your Tesla on the drive home. This may be beneficial for a swing or day trader, but not for me as a seconds scalper. In addition, the Tradingview platform is not able to provide me with the type of information that meets my requirements for a professional approach. Of course, these things are subjective at first, so let's look at a few key points that everyone should think about for themselves.

Tradingview offers a cloud-based platform that must be connected via a corresponding broker. First, the trade execution runs from the Tradingview Cloud to the respective broker and is then executed. Significantly faster execution times are achieved if you work directly with the broker in the respective online version.

Tradingview costs between $ 15 and $ 60 per month. It is interesting that the Tradingview referrers receive 30% lifelong commissions on it.

https://de.tradingview.com/referral-program/


This means you pay $ 216 more annually for the most expensive account than is normally necessary. To get out of this disadvantage, you would have to introduce a new customer to Tradingview, as every customer can automatically become a recommendation giver. Smart in terms of advertising, but also expensive for the individual.

Of course, you can also get stock market data from CQG there, but they do not show the full depth of the market. I can also process stock market data with the free MT5, and a data field from CQG costs only $ 11 a month. For $ 30 I even get the full depth of market.

A crucial point is security in the cloud, although it is not entirely clear which cloud the company Tradingview actually works with. The larger the cloud provider, the more capital is available to ensure the appropriate security. The largest public cloud providers are Amazon Web Services with a market share of 40.8%, followed by Microsoft with 19.7% and Alibaba with 9.5%. Only then does Google come with 6.2%. Clouds you create yourself can of course never offer sufficient security, but this is very important, especially in trading.

Let us come to a point that is very important to me. In 2018, Tradingview received over 38 million from Insight Partners, Jump Trading and DRW - US fintech investors.

Insight Partner is realy a venture capital company and was founded in 1995 by Jeff Höring and Jerry Murdock. But now it's getting interesting.

Jump Trading LLC is a proprietary trading company focusing on algorithmic and high frequency trading strategies. The company employs over 700 people in New York, Chicago, Amsterdam, London, Shanghai and Singapore and operates in the futures, options, cryptocurrency and stock markets worldwide. Jump has been privately funded throughout its existence. The company has made significant investments in radio frequency trading and infrastructure, including a Belgian microwave tower. In April 2014, Jump was one of six high-speed trading firms subpoenaed by New York Attorney General Eric Schneiderman for their trading strategies and special agreements with exchanges and dark pools. In May 2018, Jump was fined $ 250,000 by the Securities and Exchange Commission (SEC) for a malfunction of one of its trading algorithms that resulted in the accidental accumulation of a short position valued at hundreds of millions of dollars.

The DRW Trading Group is a proprietary electronic trading company based in Chicago. The company employs a variety of different strategies, including high-frequency trading, and was a notable subject in Michael Lewis' 2014 book Flash Boys. The company has been the subject of at least one lawsuit from financial regulators. The Commodity Futures Trading Commission (CFTC) sued the company in November 2013 for alleged market manipulation in interest rate swap futures in 2010 and 2011.

Now let's just ask, why are two high frequency traders lending $ 38 million to Tradingview? I don't know, but I could imagine. Is Tradingview actually allowed to pass on data that someone else uses to its advantage? Let's take a look at Tradingview's terms and conditions.

Conditions

If you use our website, mobile and desktop applications or widgets that we provide for another website, we can automatically collect analysis data. This information can include your general device information, device identifiers (for example, Google Advertising ID if you are using an Android device or Advertising Identifier (IDFA) if you are using an iOS device), network information, website and application interaction events. We only collect pseudonymous data and this analytical information does not contain any personally identifiable information from your profile. We use this information to analyze and improve the work of our services and applications, and to further develop, test and improve our service. We can use both internal analysis service providers and third-party providers for this purpose.

We could anonymize, aggregate and de-identify the data we collect and use for internal business processes. Including disclosure to our business partners, our affiliated companies, agents and other third parties for commercial, statistical and market research purposes, e.g. to enable these parties to analyze patterns between groups of people and to carry out studies on demographics, interests and behavior.

Now all you have to do is add 1 and 1 together and you will come to a result. I do not want to assume Tradingview that they pass on the current market executions of their 30,000 customers to their business partners, who happen to be high-frequency traders. And even if that were the case, nobody would notice, because a high-frequency trader only intervenes for a millisecond and then is out again. From the positioning of 30,000 traders, one can theoretically form an area average that is extrapolated to all traders. This also creates the unique opportunity to have specific data in the forex market to see where the retailers are positioned. Of course, I can't imagine Tradingview doing something like that, but precisely because I'm not sure, I'm avoiding this concept as a precaution. When it comes to stocks, I think this platform is a success, but the stocks sector also has most of the high-frequency traders.

MT4 is designed to be used as a standalone system where the broker manually manages its position. This is a common configuration used by brokers. However, a number of third party developers have written software bridges that allow integration with other financial trading systems for automatic position hedging. In late 2012 and early 2013, MetaQuotes Software began removing third-party plugins for its software from the market and sued and cautioned developers and brokers. Of course, a broker could theoretically also pass on his customer data, for this it is important to find the right broker and to concentrate more on the institutional area in trading. With the old MT4 you are independent of a lot of manipulation. As always, that's just my own opinion, no more and no less.

That's why we're starting with the Bionic Candle in MT4 and if our project is successful, I'll be happy to think about other things. If you want to use a secure telephone operating system, you just have to work with the iPhone. And if you don't need that, you are welcome to stay with Samsung. The question is always: What you need?

Greetings Michael

Hi Michael

That was sad - and to one of my favourite drivers too!

Each of us has to find his OWN way in forex too in the end! Sometime some just get "sidetracked" as they do not understand that in the end it is how they themself "interpret/put into practise" what counts.

Trade well / Mos

Hello Mos, that's right. Michael Schumacher even motivated me back then that I got myself a Ferrari when I was 39. The reactions of the people to it was always very positive, especially the Italians always freaked out at the traffic lights. Yes, those were crazy times, today everything is more serious. Kind regards Michael

Big player profiling costs



Hello dear traders,


In today's post, we're going to talk about the cost of an algorithm profiler. There are also certain requirements for the screens, the workstation, the Internet and many other things that we are looking at today. This gives you a rough overview of the requirements that must be met in order to approach the topic of big player profiling.



The video is of course produced in 4K again and you can have the spoken text translated into English on YouTube. Of course I will translate the text for you later and post it here.

I wish you a lot of fun watching it and a nice and relaxing weekend.


Greetings Michael

Big player profiling costs



Hello dear traders,


In today's post, we're going to talk about the cost of an algorithm profiler. There are also certain requirements for the screens, the workstation, the internet and many more things that we look at today. This gives you a rough overview of the requirements that must be met in order to approach the topic of algorithm profiling. We hear again and again on the Internet that all you need to trade is a cell phone or a simple laptop in order to be successful. Over 5 million traders around the world sit in front of their laptops or screens every day, hoping for great luck. What most retail traders do not see is the fact that they are trading against. The big players work with the most modern data centers to send their algorithms to the stock market. Their strategies are brutal and designed to convey a truth to the 5 million retail traders that really doesn't exist. An inexperienced trader will achieve significantly better results with a better workplace than with a workplace that is not suitable for trading. And it is precisely for this reason that the right workplace is a decisive factor in order to be successful with it. The Nürburgring is the most famous race track in Germany and a great challenge for a driver. Let us now imagine for a brief moment that the stock market is the Nürburgring.

If you cross the Nürburgring with little experience and at the same time an unsuitable vehicle, a very dangerous accident can quickly occur. In this case, the driver was very lucky and only got away with a few bruises. A normal car can drive through the most famous bend, the carousel at 70 km, the Porsche can do it at 94 km / h, an enormous difference. That is why the right technology is crucial. As we know, there is a massive imbalance between the big players and the retail traders. It would be comparable to a Formula 1 car versus a road vehicle. Of course, you could tune your road vehicle to have better chances, but the tuning costs are often more expensive than buying a vehicle that is right for the racetrack. A Formula 1 car goes from zero to 100 in 2.4 seconds and comes to a stop in 1.2 seconds. A Porsche GT3 RS reaches the finish in 3.3 seconds and comes to a stop after 2.3 seconds. And a normal road vehicle once again achieves significantly worse values. Now everyone will say that the Porsche doesn't stand a chance against the Formula 1 car either. That is absolutely correct, but in principle it does not have to be either. Much more important is that it scores better than the average trader. And that is exactly the crucial aspect in trading. We don't have to be better than the big players and we will never achieve that. But we have to be significantly better than the average. And that's exactly why we need the appropriate technology.

A trading professional with a professional workplace gets the highest score of 200. Now we take the same professional, free him from his professional workplace and put him in front of a laptop. He'll still be good, but not as good as his professional workplace. Now, I'm not suggesting that a less professional trader with a professional workplace will get the same results as a professional with a bad workplace , and that's not the point. But I contend that a non-professional trader break-even faster with a professional workplace than with a poor workplace. And you yourself know enough examples from sports or hobbies. That means we have to move away from the fairy tale David versus Goliath, because we will never be better than the big players. We must reach the goal of being more professional than the average. And that is exactly the chance that every trader has. Whether he actually uses it in the end is another matter. Of course, the approach and trading strategy is also a decisive success factor, but today it is first about the technology and costs required for it. Many traders have asked me, whether you really need 3 square meters of screen space, with the appropriate technology. Imagine a beginner looking at the cockpit of a jet plane. Do you need all these screens there? Maybe not, but to fly and control this jet, perhaps yes. Another aspect that I have brought up over and over again is the fact that 90% of all traders lose. This proves that trading is far from easy. Maybe it's precisely because most traders make it too easy for themselves. If there was a simple system, the big players would have laid off their expensive traders and analysts long ago. That alone would justify a complicated setup. My approach follows an institutional approach that differs significantly from a retailer's approach. This strategy is indeed very difficult to learn, but not impossible.

My workstation was specially configured by me to the individual requirements of my stock market software, data feeds, screens and my approach. Of course, it can still be done better and faster, but although I don't have to, I still attach great importance to a balanced price-performance ratio. My average CPU temperature is 55-60 degrees in absolute performance peaks. In addition, I have now decided to increase my fiber optic cable to 1 gigabit. Interestingly, I am still not the fastest, but of 12,600 users I belong to the 1% who are fastest. This performance on the Internet is of course not necessary for trading, but it is absolut necessary in the area of ping values. That's why I don't mind if exactly 1 gigabit doesn't arrive. However, fast ping times do not help you if you work with brokers that operate with ping values of over 100ms. This is a crucial point, especially for trade executions. In addition, the broker's individual data feeds should be precisely coordinated with one another.

A few questions will arise as to why I pay so much attention to individual points. The answer for this is relatively simple. My approach is geared towards following the institutional approach of the big players, which is structured completely differently from the retailer approach. I've talked about this many times in my videos. A retailer cannot imagine that a big player collects 100,000 Lot Ask in an accumulation phase, then still pushes the price down sharply and thus goes massively into the red itself. And that is exactly what happens regularly, is precisely planned and even correct from a risk-related point of view. For me it is crucial to know what is happening in the market at all times and that is exactly what helps me to achieve my high profit rates. Anyone who has dealt in depth with the new trader tax knows that a high profit ratio with a CRV of 2 massively reduces the effective capital gains tax. At the same time, I can only achieve these quotas with a very low risk. For this I developed the pip or tick value per minute, which informs me about the risk in the market. Of course there are also situations that I sometimes do not understand, that is completely normal and certainly everyone of you knows.

Before a house is built, it must first be planned by an architect. You have to imagine the composition of your technique in the same way. If you only want to work with a moving average in MT 4, you don't need any complex technology. I don't work with indicators and the price doesn't matter to me either. Algorithm Profiling means, looking deep into the eye of the tornado to extract information that most people cannot do anything with. We have often talked about the fact that every trader needs a market advantage. My advantage lies in the algorithms, as there is hardly anyone who works with them. As long as it stays that way, I will continue to have this market advantage. I am also not angry that many trading coaches sell their volume trading, footprint charts or volume profile. As long as there are still so many buyers and customers for this, it is guaranteed that my market advantage will continue to be secured. Nevertheless, I will not thank the trading coaches for this, as I do not think their approach is fair. But we've already talked about that in great detail. That means you have to adapt your technology individually to your approach and precisely coordinate the individual components. However, you can only vote on something, if you have tried it out beforehand. An example of this is my sound card for my custom-made 1ms tones. It turned out that a sound card that was 800 € more expensive was just as fast as a sound card that costs only 17 €. The same game was then repeated in the area of the loudspeakers. From Bose to Teufel, I've tried everything in order to process my tones quickly. The winner was a loudspeaker for € 40 that is no longer built. And that is exactly how it works with the individual building blocks that ultimately represent your workstation. Does my 60 Hz screen actually need an RTX 3070. No, of course not, but my stock exchange program that accesses the GPU of the graphics card and can therefore perform arithmetic operations up to 20 times faster. If you ignore these things and not implement them, you end up burning a lot of money.

All in all, there are a lot of things to consider when putting together the optimal workplace. You have to imagine it like a racing car that is individually assembled from individual parts. Then it is tested and individual components are replaced until the vehicle achieves its optimal performance. It has now taken me over three years to put together the optimal components for my algorithm profiling. I also worked with different benchmarks to find the optimal components. But we know that the most expensive module is not always the best at the same time. You can see three different hard drives here and the most expensive one also achieves the highest benchmark at the same time. However, if you include the price-performance ratio, the Samsung is significantly better. I would definitely include that in the evaluation. Just like an airplane or a car, the workstation must also be regularly monitored and maintained. There are different modules for this, but at the same time they should not slow down the computer. A computer is also very prone to dust, so it should be cleaned regularly. The decisive factor here is a future-oriented mainboard that ensures that you can regularly upgrade new and faster components. That's why a good mainboard can cost 300 €, which helps you when you install new CPUs, memory modules or hard drives.

Now let's look at the costs involved. For a good workstation you have to calculate between 2 and 5000 €. Of course, that always depends on what you need. I would personally advise against a used computer. For the screens you have to calculate between 1000-4000 €, depending on how many screens you need. Black levels are particularly important in trading, as are resolution, response time and durability. In order to load my workstation as little as possible, I work with external 4K graphics cards. Here, too, there are a few things to consider. For my 1 millisecond tones I tried a lot of sound cards, there are very big price differences. The same applies to the loudspeakers, which must be able to transmit these 1 millisecond tones correctly. If you sit all day, you need a good chair that supports your back. Just like with the bed, you shouldn't save in the wrong place here. There are also various accessories to set up the workplace. The cable connections to the screens and speakers are crucial. We know that the larger the cross-section, the lower the resistance. In total, you have to calculate between € 4-13,000 to set up this workplace. The huge price difference is ultimately only a result of experience as to which modules fit together best.

The stock exchange software is a crucial point in algorithm profiling. But that is only the basis on which you have to set up your modules with your own programming. There are also huge differences in the data feeds, which must be individually tailored to your respective broker. And that's the biggest challenge. When it comes to the Internet connection, the speed is less important than the ping values. However, these can be significantly influenced by the broker's ping values. There is also a VPS server that I use for my tick charts. I can also save stock exchange data there that show me important information. Overall, you have to reckon with monthly costs of 100-400 €. For the start, 2-5000 €, which are in different broker accounts, are sufficient. As I already recommended in my previous videos, look for a mentor who will support you in trading 1 to 1. I don't mean videos, but live trading via Skype or Zoom. This mentoring may also span many years and it is not about money. To get into algorithm profiling, for example, it takes around 150-200 hours. Unfortunately, I can't tell you how much such a thing costs, but I've read that trading coaches costs between 250 and 500 € for a one hour Skype lesson. I find that inappropriate.

From my own experience I can tell you that in algorithm profiling you have to complete around 10,000 trades before you reach your breakeven point. It is important to note that your loss after the 10,000 trades is a maximum of € 500. I saw this with my friend, whom I gladly and voluntarily supported. It took him a year as a part-time job to break even. However, I cannot help him make a profit. This is now due to his ability, his experience and the will to succeed. A fast Formula 1 car will help you to get around the curve faster, but it does not guarantee that you will actually become Formula 1 world champion. To do this, in the course of your trading life you have to acquire skills that you make a habit of. The problem is that many traders live in the ruins of their habit. By nature, people are almost the same, but habits separate them. It's no different in trading. You have to imagine habit like a thread with which we build a rope. The thicker it gets, the less we can tear it up.



I wish that your habits will bring you the success you deserve.

Kind regards Michael

How the big players work


Hello dear Traders,

some have asked me where they can get more information on how the big players operate. To this end, I created a channel on YouTube 1 year ago, where we talk about exactly these points. What content you can expect there, can be found in my short video.



To get to my channel here is the link:

https://www.youtube.com/channel/UCCb...zsD2soUtb0CTqA

I wish you a great weekend

Greetings Michael

Pip / min: low risk exit


Hello dear traders,

In today's post we will talk about the most important key points in algorithm profiling that are critical to being successful. A very decisive key point is the risk that I determine with my developed pip value per minute. To do this, we look at a small live trade, but it brings great insights. You will be amazed at what comes out of it.



The video is of course produced in 4K again and you can have the spoken text translated into English on YouTube. Of course I will translate the text for you later and post it here.

I wish you a lot of fun watching it and a nice and relaxing weekend.

Greetings Michael

English videos project


Hello dear subscribers,

Last year I produced 49 videos in German and then posted the English text here. Since I found a way to have my english translated text speak, I upgraded my second YouTube channel.

https://www.youtube.com/channel/UCqB...8qVMsDR0FKpEZA

I will post the English videos there in the future. Then the annoying translation is no longer necessary and it is much easier for you. The first challenge: So far I have produced 49 videos, which I now have to synchronize one after the other with the English language. Since the language and the moving images have to form a unit, this is not very easy. In addition, I publish a new video in German every week. That means it will take a while before the English videos catch up with my German videos. Since the videos are built on one another, I unfortunately have to keep the order. But I am happy to accept the challenge, but ask for your understanding that it may still take a while. But I will always inform you here when a new video is online. At the same time, of course, the German-speaking subscribers also receive the information when there is a new video. The project could be completed by mid-2022 at the latest, when it will be easier for everyone. German and English are spoken by 1.5 billion people, I think that should be sufficient, although English is of course the international language. We'll start with the first video that I published on my German channel in September 2020. Of course, mistakes can also occur here, as I still have to familiarize myself with it. I therefore ask for your forbearance. The positive thing about it is that the videos just keep getting better over time. Another advantage is that it also makes it easier to translate into other languages with subtitles.



The latest German video with the pip / value per minute can be found here, this information is important with regard to the optimal exit.



I wish you a great weekend and good business success

Kind regards Michael