Seeking Alpha

Phase Shift Trader's  Instablog

Phase Shift Trader
Send Message
I am a blogger and trader with an interest in oil and indices. I actively follow the news and events in the markets.
My blog:
Phase Shift Trader
  • The New Paradigm Of Trading And Politics: Follow The Noise 0 comments
    Jun 19, 2014 8:30 PM

    There was a time when to succeed in the developing world you needed a flag, a carefully marked out border, an airline, and a despotic leader with lots of foreign bank accounts. Before that time the world was pretty much a feudal realm with lots of self appointed leaders.

    The recent events in the Middle East show us a new acceptable form of global politics. Random territories, controlled by different groups with conflicting sectarian and tribal links. Borders that are nonexistent or highly porous. Armies often number in the hundreds and drive around in Toyotas, pillaging, and massacring. The so called authorities hide in massive fortified citadels protecting their oil. Has anyone ever seen Mad Max, or Game of Thrones. This is a mix of the two. Ironically, Iran is now seen as saviors in this mess. The pariah state condemned by most of the world has gone full circle. How bad are the baddies, when Iran is a goodie ?

    In a world of high tech gadgetry, can a couple of 1000 lightly armed men with no air-support really take the world hostage and cause a panic in the oil complex. Then there are the Kurds. A nation that spans four geographic countries, that has no real state but now has the capacity to negotiate and sell its oil in the open market and pretty much do anything it wants. In the middle of this, real nation states like Iran and Turkey struggle to cope with the enfolding crises and somehow get condemned for not following global political and human rights norms. The ultimate questions are being asked and not answered. Were we safer in a world with the likes of Saddam Hossein ??? Who knows.

    This is the brave new world of the high frequency traders, super speed news. A world where we can lose an airplane but can locate our Ipad at the touch of a mouse. Its a new world for politics, but also for trading. Most independent traders still look at systems and use indicators. 90 % fail. At any particular moment 10% are succeeding and a few percent are doing rather well. What do the 10% do that is so successful. They wait, they don't trade. Not trading is your best trade. They play Poker. Hang out with the kids and keep a very close eye on things.

    They know what moves the market. A market is never over bought or over sold. It is at exactly the right price in that moment. Indicators on most instruments have been over-something for days or months with no reversal.

    They just wait. The most difficult thing for a human being in the age of action. Waiting And when the small band of pirates run towards the oil, or when the Bank of England dude talks up the pound or when some random correlation signals a black Swan in a market. they move. With all their available resources. Intensity that you can not believe and an unsurpassed conviction in the trade. You can't really get that conviction with a lagging moving average. The 90% lag and fail, like their indicators. Like the hooded guy on the Iraqi border. They go as fast as they can wiping out all the stops along the way and clearing the table. Then its back to the drawing board.

    Now, don't get me wrong, all this requires a ton of preparation. Sure you look at the graphs checking out Fibonacci, Ichimoku and other exciting, colorful names from the last millennia , but do they actually trade on it, unlikely. Its funny how oil really did not go up that much after the ISIS business, but it went up quite a lot in the weeks before. There were no secrets, all the info about the impending madness was a Google search away. The eagle eyed algo or the able trader pieced it all together. Everyone else was saying oil was overbought 2 weeks ago. The 90%. That is the new paradigm of politics and of trading. By all means, follow the noise, it is louder than ever, but enjoy the quiet, while you wait.

Back To Phase Shift Trader's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers

StockTalks

More »
Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.