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Thanks, Michael.
Question: Any idea of how Brokers prepare themselves for Black Swans, and how that would affect the retail positions?
-Do they widen the spread massively to protect themselves from the losses of retailers, and from paying retailers who were sitting on the right side, huge amounts of money?
-I remember on the EURCHF black swan, people at FF were telling stories of brokers denying to honor their winning trades. Others complained that their stops had not been honored either, and they ended up with massive debts, and so on.
I believe at least in Europe, a margin call goes only as far as your full account. But that is no fun anyway.
I understand your trading method is designed to make a profit in the most efficient way, i.e. being exposed the least amount of time, and thus reducing the risk of getting hit by unexpected occurrences, which is remarkably smart.
Thanks in advance.

Protection from a black swan




Hello cuchuflito,

First of all, thank you very much for the very interesting questions, on which I am happy to give my opinion.


First of all, the brokers have various options to protect themselves directly or indirectly against unexpected price developments. You can use your own strategies, such as heding, or reduce your risk positions with the help of the liquidity provider.


For example, if EURUSD is 40% short traders and 60% long traders, the broker would need to hedge a 20% short position through a liquidity provider to be out of risk. Of course, they can also open a corresponding position yourself, but this may involve special risks. Widening spreads only increases retail costs and brings more profit to the broker. This is not a hedging option. Some of the stories you heard about the EURCHF actually came true. So we take a closer look at this.


On September 6, 2011, the Swiss National Bank issued the following press release:

National Bank sets minimum exchange rate of 1.20 francs per euro

The current massive overvaluation of the Swiss franc poses an acute threat to the Swiss economy and harbors the risk of deflationary developments. The Swiss National Bank is therefore aiming for a significant and lasting weakening of the Swiss franc. Effective immediately, it will not tolerate any euro-franc exchange rates below the minimum rate of 1.20 on the foreign exchange market. The National Bank will enforce the minimum exchange rate with the utmost determination and is prepared to buy unlimited foreign exchange. The franc is also highly valued at 1.20 per euro and should continue to weaken over time. If the economic outlook and the deflationary risks so require, the National Bank will take further measures.


From April to September 2012, the EURCHF approached the minimum exchange rate of 1.2. We can see that there was massive buying here and the price ran higher.


The price then slowly went down again until it finally reached the minimum price of 1.2 again in December 2015. Since the Swiss National Bank had set the minimum exchange rate of 1.2, many assumed that the Swiss bank would intervene again here. At this point, the vast majority of traders were long.


On January 15, 2015, the Swiss National Bank issued the following notification:

National Bank lifts minimum exchange rate and lowers interest rate to −0.75%.

The Swiss National Bank is abolishing the minimum exchange rate of 1.20 francs per euro. At the same time, it lowers interest on current account balances that exceed a certain exemption limit by 0.5 percentage points to −0.75%. It moves the target range for the three-month Libor further into negative territory to -1.25% to -0.25% from the previous range of -0.75% to 0.25%. The minimum exchange rate was introduced at a time when the Swiss franc was massively overvalued and there was great uncertainty on the financial markets. This extraordinary and temporary measure saved the Swiss economy from serious damage. Although the Swiss franc remains highly valued, the overall overvaluation has decreased since the minimum exchange rate was introduced. The economy was able to use this phase to adapt to the new situation. The differences in the monetary policy orientation of the major currency areas have increased significantly in recent times and are likely to become even more pronounced. The euro has depreciated significantly against the US dollar, as a result of which the Swiss franc has also weakened against the US dollar. Against this background, the SNB has come to the conclusion that the enforcement and maintenance of the minimum euro-franc exchange rate is no longer justified. To ensure that the lifting of the minimum exchange rate does not lead to an inappropriate tightening of the monetary framework, the National Bank is lowering interest rates significantly. When formulating its monetary policy, the SNB will continue to take the exchange rate situation into account. It therefore remains active on the foreign exchange market if necessary in order to influence the monetary framework.



After the abolition of the minimum price of 1.2, there were now some big players who immediately opened short positions. These short positions now reached the first stops of the long traders and now there was a massive chain reaction that led to a massive price drop.


Since the majority were long positions in the market, the triggering of the stops brought massive market sell orders into the market, which smashed through all the limit buy orders below.

Why didn't the long traders' stops work in this situation?

Exiting a long position requires a buyer who believes the position will continue to move higher. however, since this black swan was created by triggering the long trader stops, there was no trader willing to buy in this situation at the time. Especially since this movement took place within a few seconds.

Why haven't many short traders received their book profits?

The price jumped down within a few seconds and put all market sell orders into the market that were created by the stops. After this mark of sell orders was depleted, the price was initially held up by limit buy orders. As the price went down so quickly there was no way to replenish liquidity on the limit sell side, creating a large gap within the DoM. Now some buyers came into the market with few market buy orders and an incredibly large spread. These market buy orders catapulted the market back up. This eliminated the short-term book profits of short traders.

In a few weeks I will produce a video entitled: Protection from a Black Swan.

I wish everyone a nice weekend

Best regards, Michael

Beware of these trading coaches


Hello dear bionic traders,



In the last few weeks I have received many inquiries from you about my opinion on certain trading coaches. Unfortunately, there is still no independent comparative test in this market to find the best coach. That's exactly why I want to give you some tips that can potentially save you a lot of money in the future. I can only give you these tips because I am not a trading coach myself. Since I have been a successful trainer in the field of financial intermediaries for over 20 years, I have the relevant experience of what to look out for in coaching. In principle, every coach who does not have the appropriate training in the financial market is dubious, but that is not yet criminal. Anyone can call themselves a coach, as this is not a protected profession. But it becomes criminal if the coach wants to enrich himself with your money through deception. Then we are in the area of investment fraud and there are hefty penalties for that. If you spend €10,000 on a used car, you will do everything you can to inspect this vehicle in the best possible way. You should do the same in the field of trading coaches. And another little tip: take your time. The markets don't run away from you, every day there are new opportunities in the stock market. In the video I show you what you should pay attention to so that you don't experience any nasty surprises at the end.





I keep my fingers crossed that you always make the right decisions in your life and I look forward to seeing you here again soon.


Best regards, Michael

You should do without these trading coaches


Hello dear bionic traders,



In my last post we talked about the goals of coaching and mentoring and how to find out which type of coaching would be optimal. Today we talk about what to look for when looking for a coach or mentor and how to find the right trainer. In addition, you will receive a requirement profile that, in my opinion, a good and serious coach should meet. We also look at the costs and when coaching is actually worthwhile. Unfortunately, there is no comparison portal where you can compare the individual providers, so you are forced to listen to your inner voice. Most decisions are made emotionally, and many coaches use this situation to their advantage.



I keep my fingers crossed that you always make the right decisions in your life and I wish you a successful trading next week.

Best regards, Michael

Breakouts see bevorhand


Hello dear bionic traders,

In today's video I would like to take you on a week's journey, where I made ten predictions about the possible and future price development. You can then immediately see how right or wrong I was. In some of my videos we kept talking about my specially filtered limit orders and how important they are for a future price prediction. With this video we will examine these limit orders more closely and to what extent they can actually make a reliable price forecast. In principle, the greatest volatility was to be expected on Wednesday, June 16 at around 8:00 p.m., as the Fed promised a statement and a press conference there. The Euro-US Dollar was down 148 pips on the day, nearly double the average daily range. The press headline the next day read: Fed Decision Boosts Dollar. But is this statement true and was the Fed actually responsible for the price falling so sharply? We will deal with the question more intensively at the end and you will be amazed at what comes out of it.



I wish you a nice trading week.

Best regards, Michael

The most effective candle on the market


Hello dear bionic traders,


Candlestick formations used to be a reliable indicator in trading, but with the advent of trading algorithms, these patterns have become increasingly ambiguous. This resulted in a new type of candle that follows this algorithmic approach of institutional traders. In today's post we will talk about these algorithmic candles and their advantages. The big players work with algorithms that make it easier for them to control individual market and limit orders. These algorithms are very difficult to program because they have to ensure communication between the individual order types. There are algorithms that scan the market for certain anomalies, e.g. hidden stops, and there are algorithms that trigger specific trading strategies. In the event of a breakout, market orders are fired into the market while simultaneously canceling limit orders that would be holding up your own market orders. In order not to have to program new algorithms every day, the internal processes remain within the algorithms. For this, the big players create invisible price zones in the market, which are simply shifted depending on the situation. This means that the algorithms can only be moved to a different price level and continue to follow their programming. For this purpose, an efficient candle was developed, which makes it easier to identify the invisible price zones of the big players and to determine possible trend reversals with a higher probability.



I wish you a great weekend

Best regards, Michael

Why 90% of traders lose money


Hello dear bionic traders,


There are around 5 million retail traders worldwide, 90% of whom lose every month. That's a shockingly high number and at first glance you can't believe that such a high rate of loss is possible. In today's post we want to look at why this is in detail. In the videos I have produced so far, you will find good solutions that can help you in the future. We can gloss it over as we want. The fact is that only 5% of all traders make long-term profits. 5% are breakeven and 90% suffer losses. The dramatic thing is that the 5% who make profits unfortunately not all traders can make a living from it. The fundamental question is what reason should there be for you, of all people, to be one of the winners in the future. Maybe some of my approaches will help you, if so I would be very happy about it.



I wish you a great week

Best regards, Michael

Hi Michael, I think last video will help lot of people if they think about it as deep as possible. Markets are not made for retail traders and we think many times that trading is the easiest way for winning money.

Congratulations and many thanks for your help. I think Bionic candle is very powerful! waiting for these type of candles in ATAS!

Best

Fact = opinion?



Hello dear subscribers,


Today, for once, it's about the exciting topic of opinion. In epistemology, an opinion or conception is understood to mean a form of belief that is different from knowledge and belief. It is absolutely correct that nowadays opinions are declared to be facts and recognized findings are downgraded to opinions. But what is fact and what is just an opinion? Among other things, courts deal with this question, which have to decide whether a statement is only an assessment covered by freedom of expression or an assertion of facts.

First of all, a factual statement can be verified, while an opinion cannot be classified as unequivocally right or wrong. But especially in the stock market environment, we deal with different opinions every day, which ultimately ensure that a price runs up or down. The very essence of the exchange is that anyone who trades there is bound to have a different opinion, otherwise a market buy order could never run into a limit sell order.

Let's take climate protection, for example. In political debates, opinions or unsubstantiated claims are often declared facts and at the same time scientifically recognized findings are demoted to opinions. US President Donald Trump and Brazil's President Bolsonaro have repeatedly claimed that there is no scientific evidence of climate change. This takes climate change down from a fact to an opinion, with the public now believing that this is just a matter of differing opinions. And it is precisely from these different opinions that every person now chooses what suits them best.

First of all, from my point of view, science has a certain share of the blame in this. Have you ever dealt very intensively with scientific papers? Globally, the proportion of scientists is probably around 1%. This group of scientists uses their own language, which is often not clear or understandable for the remaining 99%. Of course, a scientist wants to shine with his research, but one often has the feeling that he writes these papers more for his colleagues than for the other 99% of the people. And now comes the crucial point. What a person does not understand, he would never bring into the world as his own opinion. Perhaps we should start making scientific work understandable for normal people.

Of course, there are also countless scientific works in the field of stock exchanges, but due to the scientific language, they hardly get any attention among traders. We find here an academic paper from 2020, where the predictive power of adaptive candlestick patterns in the forex market (EURUSD) was examined. The finding that there are no clear patterns leading to a positive financial benefit was not surprising.



A candle arises from price and time. The price is created by random market orders entering the market running into the limit orders. At the same time, the random pulling or stacking within the limit orders decides whether a market order will go through or the market order will be held up. A candle is now formed from this price within a fixed time frame. This makes it logical and clear that this candle can only arise by chance. Probably no scientific work would have been needed for this.

The following derivation can now be made from this. In the Forex market, most indicators are calculated from price. Since we know that the price is determined only by chance, we must also assume that the information from the indicators will ultimately bring only a random result. However, this is only my opinion, which has not yet been scientifically verified.

It is said that between two different opinions, the truth always lies in the middle. I don't share this opinion, because in programming there is only 0 or 1. Unfortunately, there are few things in our world that we can judge correctly because of personal reservations. In addition, we are often manipulated. When an employee goes to his manager with his opinion and comes back with his opinion, it is called an exchange of views. That means we value people who speak their minds freshly and openly, provided they mean the same thing as we do.

Of course, freedom means having the right to tell others what they don't want to hear. The pinnacle of stupidity is the art of judging books without ever having read them. Some people find it difficult to think, which is why you judge. For this reason, before one shake his head, he should make sure that he actually have a head.

The problem with opinion is that most people don't have an opinion of their own. Either they have no opinion at all, or they adopt an opinion that suits you best. The challenge is, most of the time when you adopt an opinion, you've missed the chance to check that opinion first. Another problem is that people tend to believe the bad rather than the good.

The greatest power is public opinion. Nobody knows exactly who set it up, nobody questions it and everyone lets itself be influenced by it. As we all know, the crowd is always right. Incidentally, we also see this in the loss ratios in the Forex market . And then there is the very special opinion leader. He doesn't know what he's talking about, but he knows he's always right. Interestingly enough, it is precisely the uneducated who defend their opinion without knowing the exact background. It's like our watches, they run differently and yet you believe that only your own watch shows the right time. This means that every person declares their personal reality to be the correct reality.

And finally, there are the people who think mostly about what other people think of them. They know very well that in order to get enemies, it is not necessary to declare war. It's enough to just say what's on your mind. And that's the big problem in our lives. Because first man learns to walk and speak, later he learns to sit still and keep his mouth shut.

Of course, you can also make yourself unpopular at first in order to be taken seriously afterwards. But those who want to hear the truth should first ask themselves whether they can endure the truth.

But what solution could there be to ensure that opinions are handled well in the future?

Well first of all I believe that you should question all your opinions on a regular basis if you want to develop as a person. If you say A, you don't automatically have to say B, because you can also tell that A was wrong. Another interesting aspect is that women's hunches are usually more reliable than men's knowledge.

The saying: "How should I know what I'm thinking before I hear what I'm saying" sums it up perfectly. I have to question my opinion without questioning myself. Because as Konrad Adenauer said so beautifully: "What do I care about my chatter from yesterday, nothing prevents me from getting a little smarter every day".

The German word for opinion is "Meinung". The first syllable means mine and that says it all. Unfortunately, our life is always about being right, about being the better and the stronger. But unfortunately we are not, because there are 8 billion people in the world and from a statistical point of view there will always be someone who is better or faster than ourselves. That means we should treat other people with a little more respect in the future. As you move up the corporate ladder, you should be friendly to everyone because you will meet them again on the way down.

The statements made in this article only reflect my personal opinion, which is neither scientifically tested nor certified. As a human being, I allow myself to change or adapt my opinion at any time.


With a wink I wish you a very successful trading week


Best regards, Michael

Why 90% of traders lose money

Hello canett,

First of all, thank you for your kind words. I absolutely agree with you that the markets are initially rather unsuitable for retailers in their constellation. If we compare the big players with Real Madrid, a beginner footballer will have next to no chance against these professionals. But in this market, different teams play against each other every day. If you train with very small stakes and tweak your setups over the years, you can potentially break even after 10,000 trades. Breakeven is a retail trader's greatest challenge. This goal is made possible by an initial and extreme loss limitation, by very small stops and contract sizes. In addition, you have to factor in average loss rates of 67% for the first 10,000 trades. This is difficult for most traders because they dream of big money. Trading can be learned, but always from the point of view of large numbers. It's like in football or tennis, the more often you have contact with the ball, the more accurate you become. As soon as the breakeven point is reached, only clever money management in combination with a possible probability of winning counts. An inexperienced kart driver will also drive slowly around the corners at the beginning and then increase the speed. Most beginners go full throttle in the market and are surprised when they fly out of the curve. So trading has nothing to do with profits for the first 10,000 trades, but initially with limiting the losses. And if you can limit losses, you will also be able to optimize your profits in the long term.

I keep my fingers crossed for you and wish you every success.

Greetings Michael

Calculate trend reversal in advance

Hello dear bionic traders,

In the last post we learned about the benefits of the Bionic Candle and how to identify invisible price zones. Today we talk about some backgrounds that are crucial to generate future market advantages from it. In a normal candle chart, we cannot see the current strength within the candle. We will take a closer look at why this works with the Bionic candle. In addition, we will identify other key zones on the chart and see how the price reacts to them.



I wish you a relaxing weekend

Greetings Michael

Important message to everyone who is visiting our thread for the first time.



The bionic candle is a new type of candle display, with which one can identify most reversal points beforehand.

You can find all the information, indicators and videos here:

The secret of the bionic candle

Thank you and we look forward to a constructive exchange with you. Greetings Michael

Part time strategy to become a successful trader

Hello dear bionic traders,

The dream of many people, they want to become a successful trader. But what's the smartest way to go about it? Do I jump in at the deep end and start full-time immediately, or is there a good alternative that offers me the necessary security and maybe even makes me profitable in 3 years. In addition, I will give you some important information that will significantly increase your probability of winning. For this I analyzed some 100,000 candles, the result is very interesting and will help you in trading.




I wish you a successful trading week

Greetings Michael

This has been the most informative thread I have ever seen about trading on any social platform.... My deepset regards to Michael for sharing his deep knowledge and experience of the market with novices like myself... I have one specific query.... Is it possible to automate the process of these zones formation? The criteria are very specific. I think it should not be very hard for an indicator to draw these support and resistance areas based on predefined rules set down by the parameters....

Hello MustafaHaide,

thank you for your kind compliment, I am happy if this information helps you. Of course, I have already thoroughly checked automatic zone creation, but unfortunately the zones cannot be automated because there are different rules that have to do with the procedures of the big players. These criteria cannot be recorded mathematically, so no derivations can be made from them.

I keep my fingers crossed for you and wish you continued success.

Greetings Michael

Is there anyone can help me can code my strategy from manual to EA. Thank you.!

Hello jed711,

if you would like to have an EA programmed, you should not post your request in random blogs, but find out beforehand where you can be helped. Many blog owners do not react positively to such actions. Just have a look here:

https://www.forexfactory.com/thread/...indicators-for

or here:

https://www.forexfactory.com/thread/...robot-for-free

I wish you success. Michael

Trading is cheating?


Hello dear algorithm traders,


there are always voices claiming that trading is mostly cheating as most traders lose. When looking for a possible scammer, we need to analyze the foreign exchange market. First of all, a retail trader needs a broker, who in turn passes on the orders to a liquidity provider, which allows direct access to the foreign exchange market. In the foreign exchange market, the respective orders then meet the larger market participants. The processes are similar in the futures or stock market. This gives five candidates for possible fraud or excessive losses. In today's article, we will review these five target groups with the help of data, facts and figures. Very interesting things come to light, which even I would not have expected beforehand.




I wish you a great weekend and continued success in trading


Best regards Michael

Part time, 100 times less losses

Hello dear bionic traders,

Today I will show you how a part-time trader who tries to break even, loses only € 160 instead of € 16,000 and has the same learning effect as someone who has lost € 15,480 more. In addition, I will show you exactly how you can reach your breakeven point much more efficiently and at what point it makes sense to recoup your losses. We will also look at real examples from practice.



I wish you a successful trading week

Greetings Michael

Hello Michael.

I just found your blog here in the forum. I could immediately feel that it was something very special. So much knowledge, information etc......, amazing. I've just started reading your posts (there are many, but it reads like an exciting book) and watching the videos is a particular highlight. I am really impressed. I look forward to every further video from you. Thank you for your extraordinary and unique commitment.

This learning material is a great enrichment for me.

Best regards
_________________
Michael.MSA