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Can an Algorithm ‘bracket’ the price of Gold and Silver within a Price Range?

August 16, 2012

Can a trading DESK in a major Bank or Hedge Fund manipulate the ‘price’ of gold and silver in realtime?

Let’s give some thought to the new technology which now governs most trading on our planet. We now live in a VIRTUAL world where high-speed computers can manipulate and create the ‘prices’ of assets (some 70% of all trading volume is now via high-speed computers…most using algorithms for execution). The new trend is to use mathematical Algorithms to execute trades on the markets. Why have our markets changed from prior time periods? Why is finance and Capitalism now a virtual experience with wired machines doing the work? Who understands this new market of Algorithms?

These Algorithms use the ‘If, Then’ logic of math. If the price of a commodity (say gold) increases to a given number (say $1650), Then let’s have our Algorithm execute a ‘short sale’ for this commodity to bring the ‘price’ down. The idea is to ‘bracket’ the PRICE of a commodity (say gold) within a range (say $1500-$1650).  Can an Algorithm accomplish this result in realtime? Is it possible to manipulate the ‘price’ of a commodity like gold or silver within a ‘range’? Let’s listen to some experts as they discuss Algorithmic trading.

1.  http://youtu.be/V4cRYI2x60Q  (Joe claims markets are manipulated by computer algorithms)

 
 What we now experience in our Capitalistic markets are wired machines running our economy. High speed computers and programmed Algorithms now create our markets, determine PRICES, and manipulate the VOLUME within the markets. Trading is now done in ‘micro’ seconds via these high-speed computers. Trade executions are now done at near the speed of light. We now have Global Markets where the influence of ‘invisible’ executions dominate all trading. Most of our Stock Exchanges are now virtual, digital, and electronic. Watch these two videos for more understanding.
 
1. http://youtu.be/4LzuRRv3jUM (this trader talks about why he uses algorithms)
 
2. http://youtu.be/4dEzNMx94s0 (video showing the machines which dominate Wall Street)
 
The above two videos reveal that our markets are now VIRTUAL and MATHEMATICAL. We need to think of our markets as ‘wired markets’. Computer machines now create ‘volume’ within the markets. Trading is now done in ‘micro’ seconds. Trading does not look at VALUE today…only PRICE. This means that ‘prices’ can be manipulated and bracketed by those with the right ALGORITHMS and software. This is all done at the speed of light and with NO human interference.

 
 We can now go golfing or fishing and leave our trading to an Algorithm. Human beings are becoming obsolete as market makers or floor traders. Practically all our stock exchanges have now been converted to electronic exchanges. Bats and Direct Edge are two of the larger exchanges which now execute trades electronically. Virtual reality has replaced Spacetime reality. The digital dollar has replaced the paper dollar. Few seem to be aware of what is happening in front of our eyes. I leave for Las Vegas next month for another Forex Conference. This Conference is all about developing virtual trading strategies for todays wired markets.
 
 
 
 What is now happening on a major scale is the manipulation of ‘prices’ in the markets with no consideration of supply/demand or the VALUE of the asset being manipulated. A commodity like gold or silver may experience major increases in DEMAND with no increase in its PRICE…or vice versa. Supply and Demand…the fundamentals within market economics…is no longer a concern of traders. The goal of traders is to earn digital $’s via software and trading platforms which are programmed with mathematical Algorithms to execute the trade.
 

 

 
 I don’t personally KNOW if gold or silver is being manipulated or bracketed within a price range. However, this is a possibility given todays wired and algorithmic markets. The GOAL of trading today is instant profits while the markets are open. Trading is now a realtime experience where PRICE is the focus and goal. Short selling or going long are only two strategies to manipulate PRICES. Algorithms and insiders (including our Central Bank trading Desks) could be involved in ‘price’ manipulation. The markets are now mostly fraudulent when viewed from a historical perspective. Where is all this leading going forward?
 
 
 
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