The Wiley Fox......
I really like Captain Jack's concept of the fox, for me I think it will be helpful and it fits me and my style of how I want to trade. Very hard though to figure which way the fox is going. And I wonder if its not the case that sometimes the "fox" doesn't know himself quite just yet which way it is going next. I know that is completely counter to our paradigm but hear me out.
What I am thinking is that the 'fox' that we are trying to draw a picture of, to get information on, is not actually a single fox but rather a kind of loose confederation of a very finite number of foxes with very easy access to the chicken yard and we are the chickens, yikes.
So why should these foxes overtly break the law and explicitly collude when they can just learn to operate in a way where they don't have to fight against one another. So yes there is a bigger program that they all have to stick to to an extent, i.e. the fundamentals dictate and the recent price activity dictates where the current liquidity is sitting on the chart. So that's where they have to go to make bank.
But it seems to me that it must be that they each (various super large banking entities) operate in this same chicken yard and they know they don't want to fight each other, rather they want to get along with each other so that they can all enjoy the buffet. And I am thinking they each have commercial clients that gives them a certain amount of money to put into play that is not their speculation money.
And yes they need to get a decent price for their clients, they can't be just giving them the shaft by every time they make a transaction, the price suddenly goes the other way. But they probably accomplish this same thing but with a kind of time delay.
As during the process of accumulation/distribution they are using client money to pair up against their own speculative trade. And from what I understand the differences in price that we are viewing as large on the chart because we are using leverage are actually pretty small to a client with commercial purposes (i.e. companies who need to hedge against possible currency fluctuations or need to have operating capital in another currency)
So from that companies' point of view their purpose was served, they got X amount of dough exchanged at a reasonable rate - but the fox has used this dough as a source of liquidity
So I am thinking when you see the low volume test just before the move, that is the fox looking both ways to make sure there is not another fox present with a dog in the fight that would impede the move. So as I said above why fight against each other and get all exhausted -- but rather learn the system so that they can tell generally which way it is going and not lose on the big move
But I think there must be some room in there for sport and jockeying among themselves, so they probably pick their battles and try to find some spots to get a little something extra over on the others and they probably take turns doing that.
But of course the bigger picture is why explicitly collude and risk getting busted when we can just work together generally and all make easy money to a certain extent. Kind of like a sales fleet where there is a finite amount of business out there, they have to have some guidelines to keep from eating each other up but it is still ultra competitive within the group.
I am thinking this is how it must be for the foxes -- so yes it behooves us to conceptualize a single fox, because our concern is just where is price going NEXT -- we might know where it is going eventually but if we don't mind our business it can really hurt us by adding another stop to the itinerary prior to the one we have correctly predicted.
but part of the reason that the fox is so hard to track is that in reality it is not a single fox but rather a band of foxes that are very skilled at operating together without getting in each other's way. So we are sitting here shivering in our little chicken coop and a fox shows up at the door and burns us - well to us all the foxes look the same, but it could have been just a specific fox doing a transaction and his short term transaction might even be counter to what the next big move is gonna be, but he knows he has time to pull this off before the price train leaves the station so he does and he makes some bank
all we know is that it was THE fox, they all look the same from our side of the screen -- and this is why it is not possible to put together a set of rules that always works for telling what THE fox is going to do next because he is actually a confederation of individual foxes who have the ability to do short term things to make money -- so only the big picture has rhyme or reason but when it comes to what exactly is going to happen next with price then that is much more variable.
so it might be that every time we enter a new trading range where the accumulation/distribution is going to take place, not every fox knows for sure if it is going to be accumulation or distribution but that is rather kind of worked out over time sometimes as they watch each other operate, and of course they have lots of data at their disposal that we don't have so for example they probably know which way the other foxes commercial clients have money flow that needs to go, and they also know where the liquidity such as stops and pending orders are sitting on the chart much more than we do
So for them it is probably more a matter of keeping their arms in the vehicle and trying to make sure they are on the right side as they participate, more or less playing the same game we are visualizing but with a lot more contacts and info at their disposal.
Anyway, I don't pretend to know this is true I am just speculating that maybe this is how it works, any thoughts? |
