Another very obvious manipulation was Friday.

[Croesus]

Originally posted by Habib


Dear Sir/Madam,
I have never claimed I know the market. Au contraire, I deem myself even below the kinder garten level when it comes to markets. However, I have been around long enough to tell a genuine move from a fake one.

Dear Habib mine was only a compliment and an attempt
to underscore relations between you and the market,
just to say who knows more (Habib or the market?).
You know the market but the market don't knows you.

[Habib]

Originally posted by Croesus




Dear Habib mine was only a compliment and an attempt
to underscore relations between you and the market,
just to say who knows more (Habib or the market?).
You know the market but the market don't knows you.

I took it the wrong way. My apologies.
You are right the market does not know that I exist whereas I happen to know that the market and all its major players do exist. I guess that goes in my favor. However there is no harm in knowing more about these players, more than the mere fact that they do exist, if you get my drift.

[bobnat]

Originally posted by Habib


Dear Sir/Madam,
I have never claimed I know the market. Au contraire, I deem myself even below the kinder garten level when it comes to markets. However, I have been around long enough to tell a genuine move from a fake one.

Do you have any idea how contradictory this statement is?

"I deem myself even below the kinder garten (sic) level when it comes to markets."

Here you're saying you know next to nothing about markets.

"However, I have been around long enough to tell a genuine move from a fake one."

The markets are comprised of price moves. How can you have an understanding of price movements to the degree you claim after you have just said you know nothing about the markets?

This is so contradictory that even a kindergarten student could spot it.

I'm really curious about this?

Nat

[Habib]

What I was saying is that I know things up to a certain extent but that level does not qualify me even for the KG level as far as knowing markets is concerned.
My friend, the more you know, the more you also come to know that you hardly know anything.
Knowledge is like an ever-expanding sphere. The more its expansion, the more its area of contact with the unknown. You find any contradiction in that? If you still do, I rest my case.
Happy trading.

[Gamma_Jammer]

Half the problem here seems to be that there are two different people (Habib and Adams1) who are really commenting on two different things. I wasn't watching Cable closely at the time Adams if referring to, so I can't comment on the price action at all. I do however have a charting package that I trust with proper feeds for highs and lows so I will take a look today at some point.

My comments were solely aimed at Habib's remarks about market manipulation. Here I have to agree with the sensible comments made by Taotra and others. The big banks really aren't doing what you think they're doing. As I said before, the move emslled to me more like a fixing.

Habib - do you know what I mean by a fixing? This might interest you.

Good luck

GJ

[Habib]

of bullion, oil and other commodities (probably forex too), but never got into the nitty-gritty of it. However, the manipulation I referred to (of Friday, August 13th, european mid-day time) when I started this thread, was not any interbank fixing, I think. I don't think they fix things at silly prices when everyone knows they are going to be widely and wildly different later in the day. Do you work for a Market Maker or some bank? I don't see why, otherwise, would you be so interested in clouding something which is as apparent and as obvious as daylight.

[bobnat]

Originally posted by Habib
What I was saying is that I know things up to a certain extent but that level does not qualify me even for the KG level as far as knowing markets is concerned.
My friend, the more you know, the more you also come to know that you hardly know anything.
Knowledge is like an ever-expanding sphere. The more its expansion, the more its area of contact with the unknown. You find any contradiction in that? If you still do, I rest my case.
Happy trading.

Hey, not my friend because I don't know you (nothing personal, I just don't like when people say that to me...yes, I know it's common here in this area, but I'll never like it), thanks for explaining the Paradox of Knowledge. After getting a PhD and spending 16 years of teaching, I had never heard of that.

What I was questioning was the certainty with which you made the statement. In other words, how do you distinguish between a genuine move and a fake one? If the price of Cable moves 100 pips, how do you know that the move really didn't happen? After all, it seems to me that if the price moves 100 pips, it has made a move and for the life of me I can't distinguish between a genuine or a real move. I really wish you would explain it to me because I'm really curious about this.

Thanks, my possible friend (if we were ever to meet and we talked and got to know each other and actually liked each other).

Nat

[Gamma_Jammer]

Ok Habib - well you may have heard of fixings but you clearly haven't had them explained to you as they relate to FX, so here goes.

Background:

Many Investment managers and corporate treasuries are increasingly attempting to quantify the performance of their dealing operations (as well as that of the banks that they trade through). For a proprietary trader it is of course pretty simple - P+L high = good, P+L low (or negative) = bad.

But how do you rate the performance of a dealer for a fund manager. Typically the dealers are largely operating on an execution basis, buying JPY to cover their purchases of Japanese stocks for example. They aren't (for the most part) buying JPY because they expect the JPY to appreciate, but merely because they have a payment to make. They will of course take and express a view on currency movements, but probably 80% or more of the trading they do is cash management and hedging.

So you can't really look at P+L in the same way. Equally, a large fund simply isnt going to say "what the hell, there's numbers out this afternoon - hopefully we can pick the JPY up cheaper later". They are simply much too conservative for this (and rightly so). They specialise mostly in stock picking. So increasingly many of them are using fix trades to guarantee some sort of uniform execution.

So how does this work?

OK, So say XYZ pension fund needs to sell USD 100 Million vs JPY to cover their share purchases for the day in Japan. They could call a bank and ask for a price there and then, they could call a bank and leave an order, or they could leave a fix order.

Assuming they do the latter, they will call whatever bank they use sometime in the early morning and ask them to sell USD 100Mio for say the Frankfurt Fix. This means that they will sell their Dollars to the bank in question at whatever rate it fixes at at midday in Frankfurt. That price is determined by tick data around the exact time when the fix takes place. So if at midday USD/JPY on EBS is 110.35.37 it will very likely fix at either 110.35, 36 or 37.

From the bank's point of view it's now bought USD/JPY at the fix rate. However what usually happens is that at 09:30 (or whatever time the fund manager calls), the bank starts selling (maybe 10 million to start with). They will be selling all morning and trying to make sure that when midday comes around the are short USD 100M and the price is now at the low of the day. So Say USD/JPY was at 111.27 when they were called, and it fixes at 110.36. Maybe the bank sold a few dollars initially, more all morning and the last 40M or so in the last 10 minutes to keep it low. Maybe they sold at an average of 110.76 for example. They have therefore made 40 points on USD 100Million. That's approximately USD 362,450 profit for a morning's work. Not bad.

Bizarrely, increasingly, corprate treasuries and funds are using this as a way of measuring slippage on trading. It's never made any sense to me and seems to be purely driven by the fact that they can explain this method of execution easily to trustees etc. As far as I can see the banks are the winners on these trades 99% of the time.

The main point I'm trying to make is that this stuff really happens, and I'm pretty sure that that's what's behind the morning move you were talking about, rather than anything to do with what they thought was gonna happen when the numbers came out.

FYI there are 3 main interbank fixes - Frankfurt (midday London time), ECB (13:15 London time) and a third fix at 16:00 London time. Strange moves 2 or 3 minutes before and after these times are more than likely fix related. Hope this explains it a bit - sorry it's long winded.

GJ