 Okay, traders that's 6pm UK time GMT. Good evening if you're joining us from that time zone or good afternoon or even good morning. My name is Patrick Manley and I joined this evening by legendary Dan Gramser and we are going to talk you through or Dan is going to certainly talk you through. His views on institutional training in terms of the foreign exchange markets. We'll just give it another 30 seconds here to let the traders come through during the presentation just as a matter of housekeeping here. If you have any questions, if you would like to type them into the chat box and I will keep monitoring the chat box and opportunity moments I'll briefly interrupt Dan and pose those questions to him, and he will give his response. At the end of the session, we'll also open up a brief Q&A for anyone who would like to to explore any of the topics or issues discussed in a little bit more detail. Firstly, my name is Patrick Manley and for those who are meeting me for the first time I have been active in the markets for the past 15 years. I'm a money manager managing a large managed account service. I have also mentored hundreds of private traders from former CME floor traders to completely new inexperienced traders through the process of really becoming professional and consistent market operators. And also coaching them in the mental mind games that really need to be mastered to make it as a market operator over the long term. So thank you for your introduction to my background but now let me introduce you to the market veteran and legend Dan Gramza. Dan is president of Gramza Capital Management and DMG Advisors. He's a trader consultant to domestic and international clients advisor to hedge funds and is a developer of ETF securities. His work has been published globally. He's written extensively on markets and again on the mental mind games that are so important in terms of creating longevity in the markets and approaching the markets as a career opportunity. So Dan is a former member of the Chicago Rice and Cockpit Exchange. He's established and run proprietary stock trading operations on the floor of the Chicago Stock Exchange and off-floor proprietary futures trading group and has given expert witness texts to many in federal court. As we were just discussing before everyone else joined us, Dan is a martial arts enthusiast as to my and we were just discussing before we came online here how that really helps as a grounding in terms of operating in the markets and operating in the ambiguous environment and having that sense of grounding and helping to maintain presence of mind during what can be fairly erratic price action as we've seen this week. Dan. Well great to be with you Patrick. Hello everyone. I'm really excited about exploring this topic with you and Patrick you're right. I think the idea of the martial arts, you know people think of it as self-defense but it's really a pathway so we can learn something about ourselves. And you know what and I'm sure you've observed this too with your background. When you see when I would see people on the floor, for example, get super upset. Two things would occur to me. One, if you have risk parameters in place, then you have a loss. Okay, I have a loss. If I don't have risk parameters and I have something way beyond expected, well I suppose that could be stressful. But when they're reacting that way what we both know is they're missing other opportunities potentially. So their best trade could have been right after the one that they got so upset on. So I agree with you. We all have emotions. It's not that we don't have emotions but it's how we react to the situation we're faced with, which is probably how you would view it too with your background. Absolutely, especially in the type of market environment we witnessed this week as we were discussing, it's really being able to maintain the presence of mind and most importantly maintain the discipline to execute your plan. Oftentimes in what can be fairly fast moving and ambiguous scenarios. So that's what we're looking forward to hearing and see them down is about your perspective on institutional trading. And a lot of traders, especially when they're starting out, find it somewhat a bit wildering to think of these major players and how they're moving money around and how that's impacting the market dynamics. And so I think it's going to be really interesting to hear your perspective on that. Well, thank you. Let's, let's get started then I'm going to pull up some that it make sure I've got the right new what I want I think is this. Let's move it up a little bit. There we go. Alrighty, well, you know, we do have FX traders institutional FX traders but you know, I thought we could expand beyond that. It's institutional traders corporate traders prop firms. You know, what is it that they think about when they put a trade on or how do they approach different situations. You know, we're with tick mill CME group and myself when we're separate unaffiliated companies, they're not endorsing anything I'm going to share with you today. These are just my opinions and points of view. And I hope you'll be able to leave this with something you don't know right now. That's my objective that you find helpful. My background, you know Patrick's already mentioned that I come to the markets from a floor perspective. And so it's influenced how I think about the markets it's also influenced how I use certain techniques and I'm going to show you an example of that a bit later. I caught behavioral Japanese candles. And then I thought at the end to if we got some time. We'd like us to look at some live markets, see what's going on, we have some things happening today that may have an impact. So how is the market setting itself up for some of those announcements. So I thought we could take a look at that. You know, as Patrick mentioned, I've had a chance to share ideas with traders around the globe by, except for the last two years I usually would circle the globe, a couple times of the year time a year and it all started with the CME group and a couple of traders from RBC who shared their ideas or shared that, you know, if you're interested in technical approaches called Dan, they told somebody in London who told somebody in Helsinki and so my opportunity to see these institutions, it's through a word of mouth, which truly amazes me. And I thoroughly enjoy it. But it also gives me a chance to see where the similarities are. If you look at institutions around the globe. You know, if you go from Scandinavia to South Africa and Canada down to South America or China down to Australia what is similar what is different. I would just say quickly on that topic. One of the areas that I do see it's different is the attitude towards risk. In developing countries. They have a tendency to be a little more aggressive in very developed markets they have a tendency. And I'm talking institutionally to be more conservative they want to protect what they have. In the developing economy they want to get a piece of the pie. And then there's certain cultures that are very comfortable with the concept of risk, like if you look at our friends in China, Chinese traders or in Taiwan or in Singapore. They have a tendency to be very aggressive, but they're comfortable with the concept of risk. They have an idea of chance. It's in their culture in terms of their belief system so when it comes to trading the market, it can serve them well in that regard. But if you look at countries like the US, Europe, Australia, they're more on the defensive side, because they're trying to protect what they have and again this is that very broad institutional point of view that I think that I notice as I visit these institutions. So with that let's get started. So how do institutional traders think and trade one they want to maximize the use of capital. They are very sensitive to that. And they do it with leverage, the things that you and I can whoops, the things that you and I can do. We can use stocks that in the United States, that gives us 50%. We put up half the money, the broker puts up the other half. We can trade futures. And most of the institutions I deal with do touch the futures market as one of their tools. And there we can put up five to 10% of the value of an instrument as margin so it's a deposit. The idea is not so much that we're controlling this big contract. But the idea is that we're looking for price action, we're looking for price movement. And that margin is a deposit per contract that allows us to buy yourself that particular product. So leverage is something that I see institutions really paying a lot of attention to, how do they maximize the use of their capital. Also, how do they minimize risk. Right, that'd be the other side of the coin. For us too. But they look at it by market. They may look at it by trade. They may look at it by trading desk. They may do look at it by region globally. These all have certain risk parameters involved with it. In many institutions, they have a risk manager. Now that risk manager can see what every individual possibly there's some banks I know that they can see every trader's book at that moment, see their actions see their trades. They may, depending on what they're trying to accomplish. They may have that trader exit those positions. They may have control to exit those positions. They may hedge those positions. So they've tried to protect the bank from adverse movement for that trader. They could look at it not only by the trade, by market, but by trading desk. So they may have you at a typical institutional floor, you have a, let's say a bank, you have a variety of different desk. Some of them may be looking at equity. Some of them may be focused on futures or on metals or commodities. You have corporate sales desk that handle the corporates that are calling looking for a hedge or a position in the market swaps and interest rates or futures, short term interest rates. So depending on the institution, you can have 400 traders in a room that are focused on different areas. And you also have someone that's looking at the big picture. So it can be that trading desk to a region, a part of the country, and or part of the world, and then that global outline, what is their exposure risk wise at any one point in time. So if everything was exited at that point in time, what does that mean. And that's one of the things that that risk manager would be looking at. What does my global picture look like terms of profitability at this moment and risk at this moment. You know, when it comes to systems, there's a three different systems that you look at from a institutional point of view, you have the front end or the front office, and that is the trader on the desk. You have the mid office, which is where this risk manager can sit that watches everything going on. And then you have the back office, and that's where they clear the trade make sure all the accounting is working properly. So they have systems at one time this was a big deal getting them all to work but right now, they pretty much march to the same Peter Peter the drum. And then courses at some institutions where they want the mid office people to come in to the courses for the traders or the back office. So they understand what the trader goes through and some of their decision process, and why they do some of the things that they do. It's, it's a fascinating side in terms of how these pieces fit together, how they're monitored, and the different choices institutions have technology wise to react to it. And boy, it's gotten better and better and better as time goes on. We had that balance sheet, and that is such a big deal. And you do remember like in 2007 2008, we had a bit of a correction in the market. And as we were collapsing you know in the United States we had subprime mortgages, which were people that when they got their loan, they could just pay it. If the rates went up, they would no longer be able to pay it. And so they would go into default. And at the same time there was a security called CFDs, and that that allowed, or credit default swaps that allowed the institution to hedge that exposure. So they would say, if you buy this portfolio of real estate and if it goes down, we will cover that. It's like an insurance policy on this exposure. But let's go back to balance sheet. This seemed like manner from heaven because it's real estate. And people thought, well, geez, real estate's always going to go up, isn't it? It's not going to increase in value. But when we saw that change, people didn't really realize how much exposure was out there. So institutions did what you and I wouldn't do. If you have $100, are you going to trade, take a trade on for $200? No. And plus your broker wouldn't let you do that anyways. But some of these institutions could do that. So as they increased their exposure, they really weren't looking at their balance sheet. And that part of it, that aspect of it, I have to tell you, has gone through an evolution since that point in time. Because when you're not just that trader on one desk, you're a part of a large organism that is global, that has an impact in terms of what you do, that collective action. So balance sheet exposure is very important. They also want the ability to increase or decrease market exposure with cash or derivatives. And that goes back to what we were talking about in terms of, let's say, using futures. For example, well, I shouldn't say who. There's a pension fund that, well, here's what they do. Let's say there's 15 minutes before the stock market closes. And this pension fund just got 300 million allocation. So they had this capital come into the pension fund. So they got 15 minutes to go. If they put 300 million, if they tried to squeeze that into their portfolio, it could be disruptive. It could be disruptive to some of their holdings that may not go the way you'd want it to go. But yet, they want exposure. What they do is they don't do that. They go over to the futures market. They can get whatever index are using usually it's the S&P 500. They would go there and take on that exposure. So now they buy 300 million dollars worth of S&P 500 exposure. They got what they wanted. And they keep that position, actually. So because they're using it now in terms of what we're going to talk about increasing or decreasing market exposure. Let's say the market's going down. And this institution says I want to decrease my market exposure. They don't go to their portfolio. They leave it alone, but they do go to their futures position. They can easily and quickly reduce that exposure. So the futures in this case gives them that ability to adjust their exposure very quickly and easily. So that's just something to keep in mind. And it's something that is typical for many of the groups, especially on the fund management side. You know, so mutual funds or pension funds, they do have a tendency to do that. Now, when we think about trading. What is their objective? What are they trying to do? Well, it could be they're just going to hedge. So as they get positions and we're going to talk about how they get positions, but they could hedge it. So that means if I'm long the market, if I bought it, what am I concerned about prices going higher? No, I'm concerned about prices going lower. So they would sell futures. So the market does go down. They lose money on their position, but they also make money in the short futures position. So they've hedged that exposure. Very common. There's a firm here in the States, a large agricultural firm that they have programs where they're constantly hedging every day. And what's interesting about their program is the way they do it. They don't go to be 100% hedged. They're 80 to 100% hedged. A lot of banks do that on the currency side. You know that the flows in and out of a bank on a daily basis of currencies coming in and out. That's a very liquid situation. So their objective is not to be 100% hedged. Their objective is to be 60% hedge, 70% hedge, and they're willing to take the risk for the other side of it. You know, and maybe for you and I, that's something to consider that we want to be hedged a certain amount as opposed to 100%. It goes back to what's comfortable for someone, but hedging could be an objective, a spread. It could be an intermarket spread or intramarket spread. I want to show you examples of that later on, but that's another issue. They get positions, if the client calls and they're now making a market, they inherit a position. If they can spread it, they can speculate direction. If they hold on to that position, they're now speculating in the market. And maybe they want to do that. Maybe they do have an opinion about market direction, or they've seen another time zone setting up their trade, which we're going to talk about. Maybe they're scalping. But isn't something for you and I, it is something for a market maker. If you're on the floor of an exchange, it's something that floor traders on an exchange does. In fact, what I'd like to do is talk about that process, because I think it's important for you and I to understand how this fits in. Here's the deal. Anytime you see a two-sided market. In other words, market makers often inherit positions. What does a market maker do? You want to buy, they'll sell. You want to sell, they'll buy. That's the other side of your trade. And typically it's a market maker that takes the other side of the trade. So that's what I mean by you inherit. If you're on a desk at a bank, for example, when you pick the phone up, if you say four or five, if you're still doing voice, you say four or five, the person on the other side says $100 yours. So you just bought 100 million at four. So it's, it's an, now if I have that position, what do I do? Do I hedge it? Do I spread it? Do I speculate? That's what's going through their mind. You may, you and I may not be thinking that way because we don't deal with those issues possibly. But let's look at this idea of market making. I think it's important for us in terms of just interpreting markets. So they give us two prices. Here's an asking price at $1435. And here's the bid price at $1434. So anytime you see two prices in a market, there is a market maker. Let me grab my little, there we go. So we have a price they're willing to sell, and we have a price they're willing to buy. That's what they're saying to us. I'll buy it from you at $34 and I'll sell it to you at $35. Okay, so if I want to buy, let's imagine this. I want to buy, and I say to this market maker, I put an order in to buy. I'm going to buy one at the market. The market says, I'll sell you one at $1435. When we say done, it's done. So I'm now long one at $1435, right? The market maker just sold a position at $35. And they immediately, as fast as possible, try to buy it at $34. So if they sold $35, bought $34, that means they're going to make one tick. Whoops, let me get that here. Get back up there. They're going to make one tick, that difference, right? So they make that one tick. And if this, that's like a euro price. So if they did that in the euro futures, they would make $12.50. Here's the deal. That happens theoretically 85% of the time. If you are a market maker, theoretically, the market rotates back and forth for 54545. When they look at these numbers, they're not looking at 1.1435. They're looking at just the last two digits. It's a four or five market. And on the floor it'd be bid your hands towards you. You put your hand up like this. I'm bidding four, five offered. So if you put your hand away, it's an offered price. Your hand towards you, it's a bit. So you'd see someone going like this. You don't see that anymore, but that would be the concept. Well, 85% of the time you get to make a tick. And if you could do that a few thousand times a day, then by the end of the week that could add up. And that's why someone would spend millions of dollars possibly to become a member of an exchange, because a part of what you're getting is the franchise is the business model of being a market maker. So institutions that are market makers are also following this. Again, stock specialists, option market makers, futures market makers, swap specialists, cash currency desk, they're all doing this model. So you see two prices. This is what's going on. So if I'm a non market maker, and I want to buy the market, I buy where they said they'll sell it to me. And if I want to sell, they will buy it for me at this lower price. All right, and they make a tick, theoretically doing that. Here's how I think this is important that you and I talk about it. That process, that market maker, I believe, does not cause a long term trend. Because what are they doing? Are they in there for three days? No, they're in and out in the flash, literally a flash. As fast as they get in, they want to be out. They want to make a ticker scratch. Now, I said 85% of the time, the market rotates back and forth. Well, that means 15% of the time, we're going to lose money as a market maker. Here's where they lose money in a strong directional move, they would lose money, because you don't get the rotation. So let's say it's four or five, four or five, they sell fives, and then the market goes six, oops, the market goes six, seven. We want to buy more. So we buy more, they sell it to us at seven, it goes eight, nine. Now it's really moving quickly, and we want to buy more, they sell it to us at nine, it goes 10, 11. So at those points, they're getting out, they're losing a tick or maybe scratching, or, you know, if they sold it at 35, they'd buy it back at 35. That's an excellent trade for a market maker. Here's the point. Let's go back to then, if they don't cause a trend, who does? You know what I think? I think it's the order flow. I think it's that person who put the order in to buy at the market that is now long at 1435. It's the accumulated action of that order flow. In my daily videos, I talk about the order flow, and this is what I'm referring to. You know, that person who put the ordering to buy it at 35, what are they doing? They're expressing an opinion by making that transaction. And they may be holding on to that position. So I believe when you and I look at the markets, we're tracking order flow. And I think there's some tools that you and I can look at to help us decide is that buying or selling. On the floor, you would see the broker's hands, and you would see the size of transactions. So are they buying? Are they buying 100 or are they buying one? What always gets me, though, is when somebody says, well, did you hear that Merrill, you don't know who it is, but just say this broker Merrill bought 100,000 beans. Well, maybe Merrill's client is short 600,000 beans. So is that client now long because they bought 100,000? No, they just trimmed off their short position. So I think it's important for you and I to keep that in mind. If you hear about an institution doing something, and they did it with size, you want to keep in mind that could not be what you think it is just because they're buying, it doesn't mean they're long. Well, let's go back to that. They can speculate on direction. They can scalp. And again, scalping is a market makers domain. You're going against computers if you want to try to do that. Maintain a book position. A book is usually a position size. And that position size. So let's say the trade manager says, I want you to maintain $200 of Euro in the book. So that means, if you and I are on that desk, we have $200 million already in that account. We can move it to 250, we can move it down to 150, whatever we're doing throughout the trading session. At the end, and since I'm in Chicago, at the end, we pass that book to Asia. And then Asia trades it. And then they pass it to Europe. But they're maintaining this position. So it could be by trading desk. It could be by region again. And it could be a global position that's being managed around the clock. So if you hear somebody talking about passing the book. And even though we're in an electronic age, that concept is still being used because banks oftentimes want certain positions to be maintained, because they want certain amount of exposure for a variety of reasons. They're part of that trading objective that that trader may have to deal with. So I got a position. Do I hedge it, spread it, speculate on direction? Do I scalp it? Or I'm going to be in and out. Do I maintain it? Do I keep it in my book? So mispricing when it comes to opportunity, what are some of the firms looking at? Well, we'll see this in banks. We'll see it in prop firms, entities that are oftentimes speculating with their money and utilizing technology to do that. But mispricing could be futures to futures. If the price is off a little bit, it could be futures to cash. So there's a theoretical value for a stock index. And if you look at that, and it's trading above where the cash market is, it's rich. It's expensive. And we would expect it to come back towards cash. Or if the cash market is trading here in the futures theoretical values trading lower, well then it's cheap to cash. And maybe we decide to buy that. So before we could look at the futures, in this case, futures to futures, like I mentioned above to determine that. So the theoretical value of futures to the futures contract. So they're constantly looking at this. And it could be futures to options. We can look at the theoretical values. We can look at where it's trading and does it measure up? Does it make sense? And these two options would be another thing that we could look at. You know, I got to tell you, there's, well, a lot of institutions do this, but there's a company here in Chicago. These last two ideas, that's their business model. That's what they do. And you know, thank God they do it. Because for you and me, these kind of people, what are they doing? They're saying if the market gets out of a little bit of a misalignment, they're going to push it back into where it should be. So these issues that I'm talking about here, this isn't something that lasts for days or weeks. This is something that could be milliseconds that we wouldn't see. But they respond to it. Institutional desk could be set up to respond to that mispricing. So they're making a teeny bit, but by doing that, they're moving that market back into alignment, which is good for you and I, which means when we want to buy or sell a market, having market makers and having people focus on this mispricing adds liquidity. Makes it easier for you and I to get in and out. They could also be trading market direction. And oftentimes when I say it this way, I'm thinking about things longer term. There's a lot of institutions they deal with a lot of corporates actually where they're actually know a lot of corporates. There's a firm in South America that their time horizon isn't today. It's six months for now. It's how again go looking at their balance sheet. They can use futures to help allocate how they're going to be spending their money and what their costs can be by using hedging for example. So they're not looking at today. They need that supply in six months or they're going to be selling this thing in six months. They want to hedge that I know a printing company, or a company here in the United States that sells printing presses from Heidelberg in Germany, their exposure is the euro. And by them just hedging, but they've had, you know, millions of dollars change in their balance sheet by using that. And so they're looking at that longer term market direction time zone impact. I'll show you an example of that in just a bit, but some firms do an excellent job. And I think you and I get to see how they're positioning themselves before the next time zone. Sometimes we see that sometimes if something big is going to be happening and announcements coming out, they go neutral. I think it's reflected in the price action. I'll show you an example here in a bit. Identification of volatility, a trading opportunity, you know, let's take a moment and look at volatility. Personally, I think this is critical. And I believe that you and I should know these answers. I think we're moving towards by month. Pick a, pick a market you trade right now. Do you know what month that has a tendency to be most volatile. What week out of the month is that the second week that we see the biggest volatility in this market. And it could be because fundamentals are driving this by day. Wednesdays have a tendency to be the biggest day because Tuesday night certain reports come out that used to be the crude oil market. When API numbers came out at night, Wednesday and Friday had a tendency to be big days. If you and I are trading for volatility. Those may be days we want to focus on. And by time zone. You know, we're especially if you and I are looking at futures. We have a marketplace that trades almost 24 hours a day. And we're going to see that impact here in just a minute. By time of day. Here's what would, and you probably have heard this too. You're talking to somebody is a how's it going. And I go, Oh my gosh, you know, I was long this market. And I'm waiting, I'm waiting, I'm waiting, I'm waiting. Nothing's happening. I get out and then boom, it goes in my direction. Well, here's the thing. They may have been asking something from the market, the market can't give them. That's the issue. So there maybe they bought it at 12 o'clock and at 12 to one the market has a tendency to go quiet for that market. So they're asking, come on, give me volatility. Well, it doesn't trade that way. One o'clock 130 maybe volatility kicks in. They exited beforehand because they didn't realize they needed to hold it longer. It's not that it was a bad trade, it's they didn't understand what they were trying to they are asking something from the market, the market can't give. So think about that think about your market. Do you know those answers. It may be worth taking some time do a little research on these guys. If you're using volatility type strategies that could be critical. So volatility directional trades, this is something like swing trade that lasts one day to maybe three months. What I do in those daily videos, the free daily videos are in that their swing trades that type of trade. And we'll look at that non directional trades. Well, these are trades we don't care if it goes up or down. That's where volatility really becomes critical. And we could do that with options we can do it with futures. But that's another class of trades that they may be looking at our institutional desk. And they're probably using a combination of what I'm showing you. So, before we get into an example, I want to talk about these Japanese candle charts from the way I look at it. This is something that I saw in Tokyo, actually, Bank of America. I was teaching a course on market profile a different technique. And it was for customers of the bank and a part of it was to go into the dealing room and try to find trades on 30 or treasury bonds. These were yield curve traders. I'm walking out and I'm there with Kunos on the gentleman I'm with and I said, I see these fellow drawing by hand, these candle charts. And I said, you know, what are these Niko's all these are Japanese candle charts. Now they were kind enough to talk to me about that but what I want to share with you is what went through my mind. And if you know and I'm sure you're probably familiar with Japanese candle charts. There's about 80 candle patterns that we can look at what I find when you teach it that way who remembers number one by time you get to number 80. The other aspect is if you're not familiar with these candle charts I want you to know what I'm going to say now is not the typical way to approach this. The typical way is to talk about relationships between the candles to identify patterns. Nothing wrong with that. But this is what I feel it represents. So my focus is on the behavior goes back to what you and I talked about in terms of order flow. Many of you knows they when the closing prices above the opening price they have a box they draw a box between the open and close and that's called the body of the candle I think it represents buyers coming into the market. And just the opposite I mean what causes a market to move higher. Why would it open at that price and close at a higher price from my point of view. Because more people wanted to buy it than sell it if you and I were on the floor where you could see those brokers hands and we'd say geez look they're buying with both hands and they're showing size. So that competition if you that's an auction is what we're seeing. Right. If you and I go to an auction that changes the price for all bidding for something at 10. What happens we compete and I say well I'll give you 15 and you say I'll give you 20 I'll give you 30. Our competition between us the buying order flow drives those prices higher and they do the same thing in the marketplace. Or if the closing price is below the low. I think it represents sellers coming into the market. Now the high price and the low price I have it matching the body of the candle and as many of you know it doesn't always happen. Here with the high prices above the body of the candle that vertical line, the difference between the high and the body of the candles called the shadow. I think it represents sellers at higher prices and at lower prices that shadow, I think represents buyers. Now I just want to mention to you quickly. Here's where it open at some time during its life it traded at the low price right at some point. And it did when it was trading below the open that would have been a red candle. And my feeling is as buyers came in and started pushing it higher, more than sellers are willing to sell as they were looking for sellers to come in. Once it went beyond beyond beyond that order flow behind it, we see a shadow be informed. And when it gets beyond the open now we got a green body and when it traded at the high that green body was at the high. Something at that level, maybe it's buyers wanting to sell to take profits or it got high enough to find sellers, we see it getting pushed back down in a closed here. So that concept are what I want us to think about when we look at some of the live markets here in just a bit. But before we do that, I want to go back to a point in time that I'm sure you're familiar with back in 2016 June 23 remember the Brexit. Well, this is the Brexit in an ETF. By the way, this is SPY this is an ETF that was the first ETF in the United States. It's very liquid it's got a lot of volume. And but what we're seeing here, right here, that's the Brexit, and you see big gaps, a lot of potential exposure because it doesn't trade 24 hours a day. Here's what the futures look like same period of time. You don't see those gaps. So from an institutional point of view, you want to be able to maintain the ability to manage a position. There's a lot of exposure here, not it's nothing wrong with that market. It just, it's not good or bad it's just different than what you and I could gain by looking at that futures market. I want to show you this. All right, this is the, this is a 30 minute chart looking down here in the right lower corner. It's 30 minutes. Okay, this covers the Brexit vote. Where do you think just looking at this chart, the Brexit boat occurred. Got an idea. Well, when I look at this, I think of time zones. As I mentioned, I live in Chicago, when we finish trading Asia starts the market is closed for about an hour as they check all the systems. We stop at four at five o'clock Chicago time morning in Asia, it starts to trade again, about two o'clock in the morning Chicago time Europe starts to trade. So let's add the time zones on here. This is the way I would look at this. You see the difference. Now what you and I get to see here is, well, here's when the vote occurred. And remember at the end of the day, they didn't know the answer yet but they didn't get all the votes in yet. And then the US open to you see those larger green candles notice how we stayed inside the range of that candle. I call that a benchmark candle you see the same thing here. It means the bias would move to the upside. I have to tell you if you, you can on those daily videos you can go back a few years. You see what was happening here. What was I do. I'm on the long side. I really didn't think that the Brexit vote would go through, but we have to be prepared if you have that kind of an announcement that if it does happen, how will the market respond. So this is one of those rare things I think we're maybe a stop and reverse could be appropriate but anyways, here's Asia so us finishes, we still don't know. We're going into the Asia session, and now we're getting feedback, they're able to collect the votes. And we just slow down here a little bit to go into a balanced type candle, shadows on both sides, both buyers and sellers. We're here buyers were dominant, not so much. And now they're waiting for the results, they get the results boom, the market starts going down what did they do when they first moved down. They say this can't be real they buy it again you look at that shadow. Remember, that was a red candle down here they bought it, they bought it to through the next session, the half hour and then it broke right back down they tried to buy it again. It breaks lower holy Toledo. Now we got to buy it. They buy it again and it continues the next period and boom it comes right back down. Oh my gosh what the sky is falling. If I haven't managed my position. I'm in a hope trade at this point. Right, or maybe down here I'm in the prayer phase. Please God give me 20 ticks I'll never ever do this again. Hopefully not but anyways as we start moving down now we're going into the next time zone. Things slow down a bit. Here's the beginning of Europe. It did rally. Here's your benchmark candle loanless how you see the same behavior here that you saw right up here. The bias would be for a move to the upside. And we see that right here. That's really very positive the US market is now trading. And here we made new highs and they said no, it looks like they're going to leave. There's so much uncertainty. What does that mean. And that's what we're seeing here. My point behind taking you through that. This is how an institutional desk would look at it. How time zones can have an impact. How are people positioning themselves. As I mentioned, I can think of a few banks in Germany that they do a terrific job, getting ready for the next time zone. And if you and I were in Sydney, four o'clock in the afternoon Europe opens. And you'll see institutions doing the same thing. They're getting their book ready for the European open. And so you may see it get very quiet. As they're waiting for maybe an announcement or that next time zone to open. I want to think about, I think when it comes to markets think about them on a 24 basis, 24 hour basis. That's what institutions do and I think it could be helpful for you and I, let's think about us. Okay. One thing it allows me to do is to initiate a position outside of my time zone. So let's say I bought during the day. Excuse me, right here. This is my time zone. I buy it. And I put a stop right there. Well, during the night about maybe two. Well, no, during the evening for me, I would have gotten stopped out. It allowed me to manage that position. Or maybe I would say, you know, if we trade below these lows, this thing could go further down. So maybe I have an order in there to sell. If it gets below that. So I'm now managing my risk. And I'm managing trade entry outside the market. If I'm interested in tech stocks and they're reporting like right now, maybe they're reporting after the market closes. Do I want to wait until the next day when the stock market opens to do something, you and I can look at the NASDAQ. That's an index that 48% of it's our tech stocks. So 24 hour markets allow us flexibility. It's not that I'm going to be up at two in the morning to make a trade, but it allows me to sleep. It allows me to manage my risk. It allows me to open a position. So think about it that way. Institutions do our writing. So what we're looking at there is that opportunity that I may have missed if I focus just strictly on my time zone. So we have multi directional trades. What we're talking about here is most of us think about markets that move up and down. An institutional trader thinks about a market that moves up a little bit sought down a bit or maybe sideways. Option traders think that way if we're selling option premium not suggesting that you do that. But if I sold call premium. It means that if you're not familiar with that, it means that a call means I want it to go up. And if I sell it, I want to go down. So if it goes up a little bit, if it goes sideways, if it goes down a little bit, if it goes straight down, I can capture that premium that I've gotten. So you want to think about trades I think in a multi directional point of view, you know, what are the possible outcomes for the trade that you have on, if it goes up a lot, a little sideways. What does that mean to your risk. What does that mean to how you're going to manage your position. And how you could enter relationships. You know, Patrick, I got a question for you. They've been chatting away here. And how are we doing on time. Do we need to be done at nine minutes. I don't want to cause a problem. I don't think not necessarily we also do have that FOMC announcement coming out. Right. But I think, I think this is fascinating stuff. And I'm guessing at the moment we haven't really had any questions. So while you're doing an excellent job of explaining the concepts. And to I think people are really engrossed in in what you're talking about. So if you refer to the attendees and see does anyone have any questions at the moment, are we happy to to proceed if you just have a why in the chat box that will that will be good for us just to know that we're we're all engaged and learning more. I know Dan wants to take a look at some some live markets. Shortly, especially with this FOMC announcement coming out, I think, I think that's going to be very interesting. Yeah, everyone's, everyone seems to be on board and interested in learning more. Okay, I just don't want to cause a problem for anyone. And all right, well thank you. I appreciate the opportunity for us to explore these ideas. So last one down here market inter relationships. So that means within a complex. That's the type of action that we're looking at. And what I'm showing you here is are the bean complex soy beans from, you know, what do we have here we've got the Jan to the set beans. And you're seeing their relationship here and also up here, I on the upper right hand corner see where it says percent change. So that's how I'm doing this display with these different contracts. But here's what I want to show you what an institutional trader would look at is their opinion about. About the spread. That's what we're looking at. We're looking at intermarket. So it's all within soybeans. And let's say we look at it right here. All right, now, if we buy that spread. That means we want that red bar to get bigger, just like anything else you and I do if we buy it for 10 we want it to go to 20. We're looking here for the spread. If we buy it. If we sell it. And right by the way the term they would use they want the spread to widen. If we sell that, then we want it to get smaller. We want it to get narrow. But let's say you and I buy this and here's what happened right here. You see that it got bigger. Okay, this was a one unit move and this now went to four. If you look at the spread there. So that means you're up three. If you did that spread, that's an inner market spread institutions do this a lot. And the reason and people like you and me private traders do it as well. What we're looking for now is not market direction. I don't care, which contract moves. I just wanted to move. That's the big deal. So let's take a look here at a second. The center market spread. So when you hear that term that's what they're referring to. That's a concept of buying or sign spread, very common on the institutional site. Now let's talk about an intra relationship, intra means between. Right so here, we're looking at between markets. And you know I picked the S&P and the euro. The S&P is the black line, and the euro is the green line. So, if we think about this what is it representing to as well. We have a stronger stock market here except towards the end we can see it's been a bit weaker. But what we see is a stronger stock market a general trend and what we see in the bottom is a weaker euro. Now, as you know, we're looking at euro US dollar. All currencies are spreads. And so we can think of it, since it's a spread we have two variables, you can think about it in terms of the first variable, the euro. So that means the euro this line goes down it means the euro got weaker. It's the price of the euro in US dollars, it's a euro dollar. That means if I was paying $1.35 up here, I may be paying $1.20 down here. The euro got cheaper. The dollar got stronger, because I can buy more euros with less dollars. So that's what's going on there. So it tells us, we can look at it either way with the stronger stock market. It looks like the US dollar the general trend, it was getting stronger. It's getting stronger, because the stock market's getting stronger, and it becomes attractive to Europe, let's say, I'm a German money manager, and I'm looking for places to put money. And I see this stock market in the United States seems fairly strong. I take my euros I convert them to dollars. So that means I sell euros and I buy dollars. And as I'm buying dollars and everybody else does it, it increases the strength of the dollars, but it would weaken the euro because everybody's selling. That could be a possible influence that we're looking at here. Now the other thing we could look at new and I could spend a couple hours on that one is, what do we look for here are the peaks in the valleys occurring at the same time. I mean, if you look at here, the euro firmed up a bit, and so did the stock market actually. So are the peaks and valleys matching, does one market lead the other. If I see a bottom being put in in the stock market does that mean I'm going to see a top in the euro. Or if it's happening before that, how much does it lead by. Right, so those are all clues that you and I could look for when it comes to looking at these spread relationships. A lot of information so just think about it that way when you're looking at these ask yourself, some of those questions, do they match up. When are they marching to the same beat of the drum when are they different. The institutional trader knows before before they initiate a trade, what you and I wanted to. What is considered positive and negative market activity, how when and where will the trade be entered added to reduced exited with the profit, or with the loss. If I have an idea of profit expectations I have an idea of maximum risk on a trade, I have an idea how long this trade could last. I have an idea if its strength is in up trend down trend or sideways market. If I know these answers. Now it's mechanical, right. You and I just have to implement it. Without those. No, I'm not sure what to do and you know the thing about it is both of us know the worst time to think about a loss is when we have a loss. As a human being we can think of every reason in the world to keep it, give it just a little more time that can be so expensive. It'll come back it always comes back. So, I'm stepping away from my strategy started out with a strategy. Now I'm shifting to hope. Unless my strategy says if you're down 4% start hoping it goes up. If it doesn't say that then I'm not fine strategy. And what I find oftentimes is that people blame the strategy or the market, as opposed to what Patrick said at the beginning. I am the weakest link in my trading process but let's let's take a look at this idea of risk institutional traders understand risk. Here's something that you and I can think about. First, we want to think about what amount of risk is required by their trading strategy in the market. For me that is the guiding light. Let's say that we're looking at a market and the risk on a mini e mini S&P 500 futures contract for the swing trade is 30 points. And that's $1500. The second part, what risk is acceptable to you. Where is your comfort and where is your discomfort. You know trading to me should be the amount of capital that's appropriate and the amount of risk that's appropriate, so that if you have a profit, fine you have a profit. If you have a loss, fine, you have a loss. Are we going to have losses, sure. It's you and I are making business decisions based upon the information we have at this point in time. We need to collect enough information so that we can make an informed decision. And there will be an outcome, a profit or a loss. The third thing is to think what is acceptable to your account. What can your account really sustain. It's very important to have all these working together. The top one critical. I was just thinking about, well, let me finish this. I was thinking about a felt was in a Chicago border trade ag pit, but Well, Yeah, let me tell you about him. His name's Bob. And he was in soybeans. And what happened to him. And it's, it involves risk. It involves what it means when you and I have a losing trade and Bob. I was setting up the class at the border trade it was for the floor community. It was really a border trade program. Anyways, I'm setting up my computer and Bob comes in we're just chatting. And I said I was a going by because I'll terrible. He says, I have a serious problem. I said, really? Now, he's a broker in the bean pit. Excellent broker. So remember he's a market or in this case he's passing client orders to the pit. And he's very good. But he's also trying to day trade. Eddie, his clerk bring in a chart. He looks at the chart and he tells Eddie go out and execute whatever that trade maybe doesn't do it in Dean. He does it in other markets. He said, you know, I had a series of losing trades. And I just wanted a winning trade. And so I get that. So I said, I got a little bit of profit. I immediately take the profit. And he said, you know, I can't stop doing that. Now we both know. That is, that's lethal. Because if he's making a little bit of profit, but he's risking this much. It takes a lot of profitable trades to pay for one loss, have a series of losses. Now you really dug a very deep hole. So here's what I asked him to do. He was trying to go back and find trades that he would say an ideal trade for his trading approach and for that market. Doesn't matter the technique and it doesn't matter what market, whatever it is, that he would say that that was a good trade. Look at those parameters. Think about how much risk you have to sit through to take that trade. Look at the profit objective. Now, have Eddie, when he's bringing in those charts, find one, when you see one that is lining up and saying, please buy me. Put your order in, put your profit objective in, put your risk management, stop in and tell Eddie, oh, sorry, I forgot a part. What I asked him to do. I asked him to look at how long the ideal trade last. When you put it, this clean trade on, how long let it last? He called me back in about three weeks. And he said 45 minutes. So I said, okay, wait, when do you see a clean trade? Tell Eddie your order, risk and profit. And don't look at it for 45 minutes. Tell him not to come into the pit. But really does he need to see it? If he has his risk already laid out and he has his profit objective. At the end of 45 minutes, he will have a profit or a loss. You know, there'll be an end to his business decision, probably. And he doesn't need to see it. My bottom line is this. He did fantastic. In the market, it wasn't his strategy. It was him. He just wasn't giving it enough time. Because he, he became unsure, he became unconfident, not confident in what was going to happen. Because of that previous experience. It's important for you and I to keep that in mind. So what risk is acceptable? Let's go back to that one where I said it's $1,500 of risk. Now imagine the trader right here who says, oh, I don't want to risk 1,500. Now his strategy is saying you should risk 1,500. He said, now I don't want to, I can risk 500. Now we both know what's going to happen. His strategy said it should be 1,500. He risked 500. The market goes through, knocks him out of the trade and goes right back up. He said, oh my God, I bought this thing, they knocked me out with my stop, and then it went in my direction. I can't believe it always happens to me. Well, wait a minute, pal. You didn't follow your strategy. The strategy said 1,500. And if you weren't comfortable with 1,500, you don't do the trade. Now, that same person. There's another product that the CME has they have these micro contracts. And I know Patrick you're going to be familiar with those, but they're one-tenth the size. So that means that $1,500 risk in a mini is $150 of risk in a micro. So at $150 that person who is comfortable at 500 is going to be very comfortable, which means they're not taking away their focus from the size of risk to do the strategy. So that $150 of risk, they may still lose money on that trade. It doesn't mean they're going to have a profitable trade, but it allows them to feel comfortable with it. So now they maintain their focus, not on the money, but on the trade. And if that works for them, their confidence goes up. And that's the same process, believe it or not, that happens in institutions too. They just do bigger numbers. If somebody's doing 10 or 20,000 contracts on a trade, that it's really irrelevant. It doesn't make it a better trade to trade it bigger. They just have a lot of zeros in their account. That's all. So whether you and I are doing one contract or 20,000 contracts, it's irrelevant. Now, last thing I want to talk about is the site I caught the trader decision process. This is what traders do at banks and at institutions. And I think it's also what you and I do. Identify the trade. Is it a clean trade? Evaluate it. Execute the trade. Manage the trade, manage ourselves, manage profit and loss. Those are the steps we go through. Now, here's what I want to ask you. And just, I'd like you to just take the first thing that comes to your mind. Where are you the strongest? Got it? So out of those things, what do you think you do really well? And then, where are you the weakest? I love these things because it helps me get better. It may, you know, people have a tendency to do things that are easy for them and kind of avoid the things that are harder. But this helps me maybe identify something that I'm struggling with. And maybe my execution, let's say I can identify the trade to get everything set up, but it's hard for me to execute because I don't have the confidence. If I haven't done my homework, how much risk, how much profit, how long the trade lasts, all those questions that you and I talked about. So those concerns, they don't just go away. So what are we doing about those concerns? If you just identified the weakest area, what is it that you want to look at? It may even be your relationship to money. It may have nothing to do with the market. Just you work hard for your money and the idea of exposing it here may not feel comfortable. Then that's something to look into. And you got to make sure you're taking the appropriate amount of risk, or you really shouldn't trade it all until you feel comfortable with it. Have you done your homework? And what I mean by homework, have you created a trading strategy? Not a technique. I showed you a technique today, candles. That's not a strategy. A strategy is how much profit, how much loss, how long I hold it. You know, all those kind of things that we talked about. Are you in good physical and mental condition? And there's a fellow in Sweden. Well, I shouldn't say his name, but he's at a bank in Sweden. And he called me up one day. He's a chief dealer on a Euro desk. And he called to have a chit chat. And I said, why are you calling me? I'm looking at my screen, the Euro's bouncing all over. You know, what's your system down? Is there a problem? What's going on? I said, you know, Dan, I'm not trading today. I said, really? How come? He said, I'm totally distracted. And I'm not going to get into it, but he had a lot of good things going on in his life. Bought a new house, new car, wife had a baby, got promoted. Those are all good things happened in a week. So he fell overwhelmed. That's smart. I mean, would you do that? If you came in thinking, I'm so distracted today, I'm not going to trade. Or would you come in thinking, well, I don't want to miss something. He didn't trade that day. He made more money for that bank in the next six months than I did in the previous years. So, you know, that's something for us to evaluate. How are you feeling mentally as well as physically. Is your trading platform and environment support your business or is that a distraction? You know, for those of you who are tech mill clients, you already know that you have easy access to the markets. So you have a platform that works for you. And if you're looking for a platform, you know, the tech mill platform, maybe something you might want to take a look at to evaluate it to see if it fits your needs in terms of your trading strategy. Last question, would you give yourself money to manage with your trading strategy? So here's what I think it's a worthwhile exercise. Imagine you're going to interview a money manager. And the money manager is going to trade your money exactly the way you're trading it. What questions would you ask them? Would you feel confident to give them your money? So I think it's an important filter that maybe not what an institutional trader would think, but I think it's important for you and me. The other thing I just want to mention, I have a website Dan grams a dot com. There's a free video here I do it every day. There's also a course in advanced studies, but here's what I'd like to talk to you about it. You click on start here. That's the board of trade trading floor behind me actually that was interest rates. These are options over here. And I just explained what you're going to see in the video. Then you click on free market studies, learn more, get started. And right there it says free registration, you put a little basic information in there. It stays there. I don't do anything with it. Just so you know, you can also sign up for a free daily email that just tells you the videos available. So every day I write, I look a little summary of 22 markets. Let's take a quick look then. Since we're coming into a period of time. That may be me close that. There we go. Let's go over here. And you should see a bunch of charts. You see that Patrick has it come up. Yeah. Okay. Let's just, I want to show you quickly what's going on here. I like to look at this because it tells me something about the movement of capital. And these are the markets I look at. Let's start in the upper left hand corner. You got the S&P Nasdaq, Dow, Russell. And then you had the Euro, Swiss, Japanese, and in the middle bottom row, Aussie dollar, British pound, Canadian dollar, dollar index, 10 year notes, 10 year yield, a new product. And over here, you have gold, right there gold, the bottom row, silver, copper, crude oil, Nat gas, soybeans, corn, and that's Bitcoin on the lower left. So what we're seeing here, I think is a shift in capital. What are we looking at right now in the stock indices? They're firming up, aren't they? They're getting stronger. So that means capital is flowing into those markets. Well, we see some red candles also. That means capital was coming out of those markets. That's that risk off trade. Where does it go? Well, one of the places is interest rates. Look in the middle row, right down here, you got the 10 year notes. And look how those prices, these are prices here. The prices for the 10 year notes were moving up when the stock market was moving down. Because capital, I believe, capital comes out of the stock market, and they're buying notes. I'm buying them, you're buying them, Patrick's buying them. They're competing. And that drives up the prices. Today, it looks a little soft. Yesterday they sold them, but we're seeing it off today. So people are selling these 10 year notes. Is that what's helping fuel that capital shifting over here to the stock market? If you want to think about these, let's look at them individually. This is what you would see. By the way, the red and green lines are my references. I'm not making buy and sell recommendations. The green line is a buy level. The red line is a sell level. So this was a sell level here just a few days ago. And depending on how someone wanted to manage that position, it did move favorable but very bouncy. Maybe before yesterday, yesterday bouncy on the clothes. And today we're seeing some movement to the upside. Forty here is the buy level and that hasn't been reached yet, it looks like. Over here is the NASDAQ market. That's also firming up. Down here is the Dow. It's trading above 34,500. That's the buy level there. That's how that develops. And over here in the Russell, small caps. That's also firmed up. You know, those small cap stocks are one to watch. If you don't look at the Russell, put that on your watch list, I think. And the reason I say it is that it represents small to mid cap companies. Oftentimes they have a tendency to react faster than the large cap companies. So this index, it hasn't lately, by the way, but it can lead these other indices. So something just to keep in mind. Let's look at currencies. Let's see what they're doing. The euro's a bit weaker. That's backed off yesterday was bouncy. That's softer. Swiss is softer. Depending on where we finish that green line, what will happen today, I'll move that lower to try to capture a little bit of profit there over here. Japanese yen. Also backing off as softer. But here's what's interesting in these currencies. Check this out. All right, those three currencies are weaker, right? And here, lower left Aussie dollar. You see a green candle, British pound Canadian dollar. Now the Aussie dollar in the Canadian dollar, those are commodity currencies, resource based economies, right there. A big part of their GDP is to sell resources. So our friends here in Australia, they sell more iron ore than any other country would pop over at coal, big producer and coal wheat. Number four, I think, but big exporter China, Japan, South Korea, United States, India, our big customers of Australia. They're our friends in Canada. We buy more crude oil from Canada than in the other country in the United States. So as we go to buy their crude oil, we got to change our dollars and the Canadian dollars. And that can put upper pressure on Canadian dollar or contribute to it. And look at the British pound. Go figure. The way we would say that is they're buying the break. The break is a down market, a rally is an up market. So here they sold the rally. Here they're buying the break. And can they get follow. So that's the question now. And we got a few more hours before the day is done. So here is, I should probably tell you the Canadian dollar traded above its bullish level. So that just to give you a reference, this doesn't really mean anything. The dollar value just so you get a feel for that is $400 a contract. So if we sold it here and bought it here, that's $400. I mean, you would get that not making that as a recommendation, but I want you to understand if you're not familiar with futures with the dollar value would be there. That would be $40 if you're trading a micro over here in Bitcoin. Oh, that traded above its bullish level. And again, the last couple of days you see those shadows on the bottoms are buying the break, waiting for the announcement with how balanced that was. Whatever's happened, they seem to like it and bitcoins moving up a bit. This was a previous sell level. And this was another sell level. This difference between this red line to the green line for the Bitcoin futures contract is $10,000 a contract. The dollar value here between that sell line and that green line is $15,625 a contract. Now that's the regular Bitcoin contract. There's also a micro Bitcoin contract as well to those numbers don't mean anything other than that's just the dollar value of that change. Now interest rates, as we saw they were weaker. Just a few days ago, a couple weeks ago that was a bearish level there that was a sell level. And a couple days ago, four days ago, we had a buying coming into the market above that buy level that dollar value if not familiar with that market is 500. No, it's not. I gotta think about that that's 28 that's 31 that's three. It's a little over $3,000 a contract over here in the bond market very similar type thing. It's traded above its bullish level right there. And that was it's $1,000 for every point this just do it that way. I didn't write it down here so it's to go from 56 to 57. That's $1,000 to give you an idea of what that dollar value is. And today it traded below its bearish level. So that dollar value there's $500 a contract. Let's let's take a look at metals. So what are they, before we do that. So what is happening if the Fed comes out and has said maybe they haven't gotten the whole announcement out yet, but change them. Pardon. They're unchanged unchanged. Oh thank you Patrick to be expected right. Yeah, so they they did they're staying the course that's good. And so you know they're conditioning the market for an interest rate increase, slowing their bond purchasing programs finishing that. You know the Fed, you know here in the Bank of England and all these other central banks, it's a very tough job. It's not easy. I mean the Fed here has three different mandates. Low inflation, keep that in control high, a low unemployment and price stability. And the tools they have they're changing right now, by them eliminating the bond purchase program that they have. It means they're not putting money into the economy. But here's what you want to think about. They deal with 22 dealers. That's how they do this. And they have sold securities to those dealers. Now, they've been buying them back. So they get the security and they give the dealer money. It takes six, six months to 18 months depending on what they're doing for our economy to feel it. You and I see the market react in an instant. But it's not absorbed into the economy in an instant. And I think something we want to keep in mind in March, if they increase at 25 basis points, which is their typical increment. Although if you look at the last 30 years they've done things larger back in the late 90s, early 2000, but anyways we're looking for a quarter 25 basis points. We're not going to change our economy. No. But there is a psychological element, and that's also what we see the market reacting to. So that's what's going on in the interest rate markets. How about metals. Well, we have inflation. I mean, gold and silver to me are what I call excuse markets. Gold is moving up. It needs, it's not a supply demand situation. Typically, it's high inflation, weaker dollar. That can fuel gold because the ideas and time of uncertainty capital flows towards these precious metals, because it can hold a store of value. Gold, if you go back in the videos for the last few months anyways, what I've been talking about is the difficulty gold has with follow through. So even though yesterday's candle was a green candle, it's the way it moved up there that's not a sign of strength. It's I was looking for an inside day that's what I said for today. And actually gotten weaker. Look at silver though silver didn't fall out of bed, like you're seeing with gold. And look at the way silver got up here, a lot faster, sooner than what we saw with gold. The bias is still for a move to the upside. The issue is follow through. This market yesterday traded below its various level that the dollar from this value from that buy to that sell I should have that here is $5,400 a contract to give you an idea. If you don't look at that market over here in copper, I'm bullish on this market. Fundamentally is our economies turn on. I really think this has some upside potential, but we need to see confirmation here. So it's a little positive right now. It's not a super strong move here either we'll see how it finishes up today and will make adjustments accordingly. How about energy crude oil. What the heck is crude oil doing up here. I just befuddled me because I my feeling on crude oil. I mean the buyers are here so would you and I want to be a buyer 85 yes fine will be a buyer because price to me dictates what we do. Although fundamentally I am not bullish on crude oil, not super bearish. I just think we should be about $80 a barrel. If you look at the global supply and demand. You see demand increasing in Asia and in Europe. But our supply capabilities are not weak. We still, if you look at our production in the United States, the expectation is we could be back to 13 million barrels a day that that's record levels. We now have production, just a few years ago. We didn't we had production in the Permian Basin which is in Texas and Eastern Mexico, New Mexico, a lot of production but you got to be able to get it out of there. Now we have pipelines, we have Nat gas lines that we can before we were flaring it. When you go by a production well if you ever see that and you see a big tower at the little flame on top. You're burning off usually Nat gas, because they don't have the ability to capture and send it someplace well now we do. And if you look at the Nat gas prices. I've been very bullish on this. It's now trading above its bullish level. But can we get follow through, you know, if we're looking at 5453 to 55, you know by the close of this week that would be an excellent move for that market. But think about what our friends in Europe are paying right now for Nat gas. It's five times that number. You know you're 25 to $24 for Nat gas, Asia's Japan's 28. And in the past we didn't have the ability to send it to you. Now we do. Germany has import facilities. We are building and have built. gas export facilities to go from natural gas to LNG and all liquid natural gases is is we take these gas molecules that are bouncing around. And we cool them off so they slow down and we squeeze the heck out of under pressure. So it takes very special trips. Ships to move this product in a liquid natural gas state, but anyways, and if we think about what's going on with Russia and Germany Nord Stream two line has not been approved. And we got the Ukraine situation are they going to play the political game. One of the things that's changed for Russia and gas prom, they're not gas supplier is the fact that we can now send that gas to Germany. We can be an alternative Norway supplies about 20% of Nat gas demand. Norway is interesting because they don't use it for production of electricity. In the United States we use a third of it to heat our homes and cook our food. We use a third in industrial applications steel chemical industries, and we use a third to generate electricity. It burns 60% cleaner than coal, and we produce more electricity with that gas than we do with coal in the United States. But Norway 92% of their electricity is produced by hydroelectric. So it's one of the reasons why they can send some of that down south. So it's an interesting marketplace when we think about what's going on there. These are the grains. Here's soybeans soybeans yesterday traded below its various level, and the dollar value in that market was $1,500 a contract and today, it's traded above its buy level Very I'm bullish on this market. This is what I call a non symmetrical pullback it has a bullish bias and right now I really like what I see here look for smaller range a day tomorrow. I wouldn't expect to get much above 1450 corn also today it traded below its various level that dollar value in that market. From 2017 to that's $500 a contract and over here and our friend Mr wheat, we traded below its various level that's 10 cents, and that's $500 a contract as well. And we, you know, Ukraine situation Ukraine's a big producer of wheat. So it's Russia. So, you know, what's that dynamic going to be, hopefully, not much. It's hard for me to imagine that Russia wants to really do something. Plus, it's very expensive, keeping all that equipment people there, and to feed them there. Right now in the winter, do they want to do something when China is having the winter Olympics. And if they wait till spring and it's soft and mushy. Do you really want to plan attack then. So hopefully, those are just wishful thoughts that you know they're not going to do anything you can get a peaceful resolution there. Well, those are a few things to think about I hope you have a couple ideas to ponder when it comes to what institutions look like, how these current markets look like we're not seeing anything shuttering regarding the Fed so far. So in Patrick like you said it's unchanged that's good. There are some headlines coming out of being interpreted a little bit bearish at the moment we're seeing a bit of a pullback but as with all as with any of these major headline events as you know down and it's normally a trap situation they try and both sides of the market tend to get caught before we get a directional move so to watch at the moment I think, but what I'd like to say Dan is that that presentation is fantastic. I shared with the attendees. So the question that's that's come here. And most of them I would have thought I would know how to answer but I don't know the answer to this and hopefully you can shed some light on this. So one of the attendees wants to know with respect to market making, let's say in the forex roughly what is the least amount you have to have in terms of buying or selling power to influence market direction. A gigantic number. We're talking billions. If you're talking about FX, you know, trillions and trillions of dollars are traded every day. The inner bank market which is a very exclusive club. You know, to do a yard is a billion dollars. Now they're not doing yards all day long, but the smallest unit depends on some banks it could be a million dollars. Forex dealers could go down to 100,000 is the smallest transaction, but to have influence. So that's a beautiful question. Thank you for asking it whoever did here. Here's the deal that we want to think about. Let me give an example. Okay. In 2009. Maybe it was around 2000 2001. When the US dollar yet was when US dollar was very strong. The euro had, you know, was floated a few years before that. The euro was down at 80 cents. It was just getting beat up by the dollar and people are saying the dollar is way too strong. It's way too strong. And we had central bank intervention. In fact, it was, I remember it because I was in Amsterdam. And in my class, which was primarily banks, there was a central bank. I'm not going to say who but I don't even know if they knew what was happening that day but we saw in the class, the drama, the amount of volatility going back to observing volatility. It was violent. And that implies central bank action. But here's my point. The central banks that come together and say, Okay, we're going to support this we're going to try to weaken the dollar. The euro goes up. Do they have influence. Yes. And then the market went right back down. Then it went back up again. And then went right back down. The third time it stuck. That is different. 25 years ago 30 years ago when central banks would intervene, they could move a market. They would stay there. Now, central banks are another trader. They don't bleed at the same level everybody else does and they have a lot of money. So they can pump that in. But to change your market direction. That's very tricky. So could they have short term influence. Yes, could they have long term influence depending on how they work their program possibly. I hope that helps. The idea of having influence in the effects. I just don't see it. Yeah, I mean, a recent example down. Remember back. January 2015, the SMB. Okay. Look at that one that boom everything fell out right out of bed. Now did that one stick. Yes, because they said that was a change in tactic. Yeah, we're not going to use the year we're not going to try to march to the same beat of the drum. That was a game changer, as opposed to intervention. Yeah, in a way, I mean they were because of that influence. But that's a policy change. That's an excellent example Patrick. That's a good one. A lot of guys were leading against that head. When, when they pulled the rug. Yeah. Yeah. It did. It really did. And it goes back to always wanting a safety net. Yeah. You know, and the idea that if we're going to take market exposure, the idea of working in order overnight while we're sleeping, which is why I like that idea. The 23 hour, you know, futures market. It gives that certain comfort because you don't know, it just takes, not that every day is crazy because it's not. I mean the idea behind those videos that I do it's, if you've never traded futures, a place you want to start is just watch them. You know, and Tick Mill has a tremendous amount of source resources for you. Patrick being one of them that, you know, can help give you some decisions and ideas or tools that you can use. And so watch them know watch them for a while. And you shouldn't trade them until you're comfortable to have all the pieces in place. So, or if somebody only trade stock indices. You know, all those different markets because they are connected in some way. And me, me may find that crude oil or gold or something else is of interest to you. So it's a way to kind of get a feel for what's happening in other markets, but yeah Patrick you're right I like. I like the way you think maybe we think alike and that could be why. So are there any other questions that anyone would like me to pose to Dan role, what we have in here. I would say that Dan and I are going to do a follow up or a supplementary webinar to this session today. We're thinking probably mid to late March, where we're going to expand on some of these ideas, probably a bit more of a two way conversation between us, where you guys will get the opportunity to clean from our, our experiences obviously Dan folk, I consider myself experienced but when I speak to someone like Dan I realize that I still got a bit of wood to chop myself. Well a long time doesn't make it better. Definitely going to to engage on the next session and expand upon some of the ideas that Dan's touched on today, specifically around the behavioral candlesticks which is a fascinating area and interested to learn more about that. I can't see any other questions coming through at the moment Dan. So, what we'll do is we will wrap this session up here on behalf of everyone I'd like to thank you for your time and for the insights you've shared this evening. Excellent, excellent opportunity to to learn from a from a seasoned pro. So, with that said Dan, I'll, I'll wrap the session up here, and we'll reconvene in March and we'll send out notification to all attendees, and also there'll be a recording of tonight's session for those who weren't able to stay right till the end. Dan, thank you very much indeed. My pleasure. Thank you. Thank you everyone for sharing part of your time with me and I hope you got a few ideas that you find helpful and I just want to say thank you tick mill in the CME group. You guys made it possible for us for Patrick and I to be together to share these ideas. So, thank you very much. Great stuff. Thanks. Thanks very much Dan take care. Cheers.