Essence of the wrong belief – traders do not work at the irregular Forex market (according to manuals of Bill Williams, Alexander Elder, Eric Naiman etc.), but at the well organized and controlled market on currency exchange all over the world, which is carried out by the Syndicate of the biggest world markets.

Who then move currency up and down, forms trend, corrections to them or floats?

Ultimately, who reverses trend at a point and a time, when most of the traders are naive in their belief (as shown on figure 1) that they have finally caught their chance and take advantage of it? Now, they are going to raise a great profit. It is important to stay cool and make sure that the deal is not closed; you should not to be content with a bit (this nonsense will be considered closely in the next chapter). Therefore, the deal for "buy" is not closed; earnings at the trader’s account are getting less and less. Soon, “negative”, or loss starts to grow rapidly. Is the situation like this familiar to you?

Especially when you look at the picture.

Who then has reversed the currency?

So, who on earth moves it?

This is controlled from a sole center/compare quotation of several dealing centers or banks on-line and you will see how they coincide, sometimes second by second. Is it possible that traders of each bank can simultaneously, without seeing each other to bid similar orders to the extent when even their quotations coincide? Of course NOT.

However, before we answer, let us listen to Bill Williams, the classic of technical analysis ("Trading chaos", chapter 6): "...let us have a look how do trends form. In the early times "a market" and "a place for conducting market trades" were occupying the same physical area. Most of big merchants on corn market were concentrated on  "the floor". Their orders were of significant volumes, so that could move the market and they possessed much more control over it as comparing with present times. For the last 20 years, the markets have spread all over the world. At present, not only Purina Ralston, Kellogg and other big commercial associations try to hedge their trading deals with cash assets, but millions of little speculators and farmers all over the world compete with them waiting for the future movements of the corn prices. This opens tremendous opportunities for traders. At present times, trends are not made “on the floor". "The floor", basically maintains liquidity, responding to "external" orders.

The fact that today trends are made rather "outside the floor", than "on the floor", as it was before, gives us a chance to define what the market is going to do next. Scope – that is the key to this issue. The only information we possess in real time is tick scope, time and price. Tick scope – is a quantity of price changes during a certain period. This is not a number of trading contracts. Many researches indicate that there is no significant difference between the actual and tick scopes. We use the tick scope and we may assume that it represents the actual scope. It is a scope, information about which arrives in real scale of time, and it is our best key to what is going on in the “trade pits”.

There are two main elements at the trading areas (pits): brokers "on the floor" and traders on sites. Brokers (local) on the floor – they are people who deal with execution of orders at the market. They are paid their salaries or commission charges, or both, for execution of deals. In general, they do not have their own money in their disposal. They are simply executors of orders. Their financial future is not affected by the price impact, received by them for execution of the orders.

Traders on sites trade with their own money. If they do not get a good price, then they have to pay from their own pockets right there on sites. Traders on sites must be much better than brokers on the floor. Traders must make their own decisions independently; brokers only follow someone’s order. Traders on sites must maintain market, by occupying the opposite side of the market. Normally, they are not interested in any long-term positions. Many traders on sites, participated our private training programs, and we have to mention that for some of them a 10-minute trading operation could seem to be a long-term position. Remember, that trends are made of orders, entering "the floor" from outside, but not from the fact that traders on sites take the long-term positions. As far as the main job of those traders is that they must occupy the opposite side of orders, entering from outside, then they do not have any prospect from trading between each other only. They follow your money. Again, we would like to highlight that our key to understanding activity in the "pit" is tick scope. Traders on sites, they do not bring in any significant scope into trading, which could be a result of deals with such traders on the floor. Trends originate from the outside orders. This is why we must know, when and in what quantity the external order enters "the floor". This is advised in the variation of tick scope."

By the end, does it turn out that traders move the price, i.e. we do? Ànd brokers "on the floor", do they simply locate and execute orders that come from us? So, all of them (i.e. us) on 1.04.2005, did we decide, all of a sudden, and being on top of the rising trend by pound/dollar, to reverse the trend and to speculate for fall against all the rules, news and common sense? I wonder if the classic is not ashamed about that. I have heard only one argument in defense of Bill Williams; with respect to that quotation (can you now see why I presented it here in such details?). This, you know, is related to the futures markets, and for the currency market, we never read anything like that and we never apply it accordingly. It is strange that those are arguments of Williams’s defenders and never of Williams himself. His book was written both for the futures market and for the currency market too (Forex), this is why there are different pictures and examples in the book for BOTH markets, and the author never mentions a difference in technical analysis between them. This should mean that he himself either DOES NOT SEE them or DOES NOT WANT to tell us about those differences, differential peculiarity and nuances of each market. In addition, neither Williams nor his publishers have EVER mentioned in a foreword, or in any note that whatever is presented in the "Trading chaos" was not applicable to currency market, meaning that it should not be used by trader in his job at Forex. This peculiarity of Williams (to correctly calculate a method for a particular case and apply it to wider coordinates), I have been meeting for many times, and that made me to write this book. The thing is that Williams presents the absolutely correct techniques and advices for trader of ONE section of Forex, as the all-purpose techniques of ENTIRE Forex, without showing and indicating boundaries, where his techniques works, and where it does not. The same do opponents and followers of Williams, each of them presenting only that part of Forex, where his techniques either work or not. For a trader, as opposed to Williams’s analysts and bibliographers, a different thing is important: he wants to understand a distinct limit until where he can work "by Williams" and where he can not. Hence, logically we have a question here: WHAT can be added to Williams’s indicators, so that they are to work there, where they do not now (this is described in more details in chapter about "Alligator" Williams). Now we are back to the question, who gives a trader quotations at Forex? Remember, according to Williams, they are we and only we (traders) who move currency. I need to mention that millions of traders learned and still learn "Trading chaos", and there is a lot of information that is deserved to be learned. It is one of the most interesting and useful books about Forex. No matter how many times you read it – every time you discover something new and useful for yourself. However, what an approach, it smells as if something specifically ordered to be written. Do you really think that Williams has no idea about the fact that there is no exchange at Forex in its popular sense, and that there is no trading spot there? In addition, subdivision into the Asian, European, American and Pacific sessions is conventional. Have you ever noticed that in the USA on days off, banks are closed, but currency keeps moving – is it not fixed? I noticed that too. Therefore, who in the USA decides to work "on the floor" on a day off? Who on earth provides us with the price? Who forms trends and reverses them at those points, where there were neither good reasons, nor conditions for reversing the currency and to move it a different direction?

And now the answer, given for traders by magazine "Currency profiteer" volume 11, 2002 to the question, article "Electronic brokers’ systems at the currency market", which reads the following: "... a widespread electronic brokers’ system at the inter-bank off-exchange currency market is the automated brokers’ system intended for the currency dealing, Electronic Broking Service (EBS). It was developed by a syndicate of big banks-participants of the currency bargaining together with Quotron, expert in information technique, and it was commissioned in 1993. Today, EBS unites 13 big world banks – market-makers, such as: ABN AMRO Bank, Bank of America, Barclays Capital, Citibank, Commerzbank, Credit Suisse First Boston, HSBC Bank PLC, J.P. Morgan Chase and Co.Lehman Brothers, Royal Bank of Scotland, S-E Banken, UBS AG – and Japanese corporation Minex, established by syndicate of Japanese banks together with the Japanese telecommunication company KDD and Dow Jones Telerate.

EBS provides completely integrated range of dealing services for the professional inter-bank market. The EBS Spot Dealing System is one of the leading electronic anonymous dealing systems for the inter-bank currency trading. Today, more than 2500 dealers in 850 banks of the world use this system; the average volume of trades constitutes approximately USD $80 billion per day.

The same article reads: "In June 2001 three biggest dealers of the FOREX market – Citibank, J.P. Morgan Chase and Deutsche Bank together with Reuters Group PLC have commissioned Atriax system, which, however could not survive the competition and ceased operations in spring 2002."

Can you imagine that SOCKDOLAGER, which made three biggest world banks Citibank, J.P. Morgan Chase and Deutsche Bank to refuse from THEIR business projects? Or on another hand to reverse a currency Euro/dollar pair from level 1.3660 to level 1.1865, which satisfied orders of all traders in the world in a moment, who keep bidding for sell? Accordingly, only from April through July 2005, they were buying Euro from traders at the rates of dollars 1.36, then 1.29, 1.20, 1.19 etc.

Can you imagine losses? They have bought Euro at the rate of 1.36 and after that, they were simply watching declining the rate by 1700 points. Probably there were no losses?

All main theses were actually confirmed in full in 2 years in 2004 by the authoritative newspaper "The Financial Times" (UK) in the article by Jennifer Hughes "Computer occupies the trading spot", where she indicated that turnovers of the Syndicate have increased for another USD $20 billion per day during the previous 2 years and reached USD $100 billion, at the same time, average scopes of operations at the biggest platforms, established on the basis of the internet resources, constitute from USD $15 to 20 billion.

Let us make some conclusions

1. Forex market is absolutely NOT the same as it was before, specifically 11 years ago.

2. It is for fact that there already exists "relative uniformity in price variation" (or practically similar currency quotations with all the brokers and traders in the world).

3. They have honestly mentioned the reason for that "uniformity" from the TECHNICAL point of view – "development of electronic exchange technologies".

4. Nothing was mentioned about different reasons, causing similar quotations at the absolutely different forex trading platforms in the world. Namely: what connects those platforms and currency exchange rate at them from the point of view of the following reasons – financial, organizational, negotiated etc?

5. Here, in "The Financial Times", there is one interesting comment to all those changes that took place at Forex for the last years, by anonymous former (?!) dealer, who compared Forex market of those 11 years: "It was curst noisy and curst great". That was reminiscence of former dealer, from whose point of view, once the high technologies have arrived, the market deprived of a portion of its character." Interesting phrase: "It WAS... curst great". Moreover, I would like to add – “It was curst anxious”, when currency pair was going through 400-500 points. Now this is not any more.

6. Why have "The Financial Times" ( UK ) interviewed ONLY representatives of the EBS Syndicate Jack Jeffrey and head of the UBS currency operations department Fabian Shey? Why haven’t they interviewed the Reuters (UK) representatives? Why did they reveal such “disrespect” to their countrymen? Was it so difficult to find them in London, where both headquarters of "The Financial Times" and Reuters are situated? Moreover, after saying, "At present, both those sites (EBS Syndicate and Reuters) have strong positions and they dominate at the inter-bank market". Or probably "The Financial Times" has enough information about their countrymen from Reuters, allowing them to make their own conclusion that interview of both EBS Syndicate representatives would be sufficient without Reuters?

7. Please pay your attention to the next phrase by "The Financial Times": "Besides, there other opinions. Under the rough estimates by Justyn Trenner from Client Knowledge, the total scope of the on-line trade as of today equals to USD $100 billion per day and at this explosion is observed in this sector." It turns that "The Financial Times" completely acknowledge their incapability not only to trace (and tell to their readers) the financial flow at the Forex market between different trading platforms, but EVEN SCOPES of trades at those platforms.

Hence, by the way, here lies the principal difference between stock market and Forex. Those who write about SIMILAR techniques of fundamental and for both markets simultaneously (B. Williams, Ò. Demark, A. Elder, E. Naiman etc.) or do not understand that principal difference between the markets, either deliberately direct millions of traders into their trap of fraud.

"The Financial Times" mentioned that there exist other different electronic dealing systems (Electronic Broking Service, Reuters Dealing 2000-2 etc.) apart from the abovementioned Syndicate, but she has omitted a question about mutual relations between them. However, there arise lots and lots of questions: how and why between those Forex systems appears coincidence of trends, corrections of historical maximum and minimum of currency pairs on the same day etc.

How can a thesis on parallel existence of EBS and Reuters Dealing systems be correlated with their statement that "Citibank, J.P. Morgan Chase and Deutsche Bank together with Reuters Group PLC could not survive the competition? Can this be considered as the fact that the Syndicate has actually bought the Reuters Forex system and at the same time, they preserved their formal independence so that Forex would remain “free” and “independent” market in the view of all traders all over the world? If this is true, then it is clear why the Syndicate of banks was not afraid to buy Euro when it was coming down versus dollar from 1.36 to 1.1860 (what should they be afraid of, if they know upfront an approximate bottom level where they themselves can bring Euro to and again, they will bring Euro back to the necessary level in several months. And what is more important – nobody can really do anything about this in your business).

Now, I believe, it is clear who reverses trends at Forex. This is done by the Syndicate of the biggest world banks, which can afford to reverse currency wherever and whenever they want it, against all the fundamental laws, published news, trends and common sense, as we could see that on schedule as of 1.04.2005. And those are not traders, as Williams assures us.

This is why the Williams’s MARKET FACILITATION INDEX (MFI) indicator does not work. It is based on variation of scope of deals, time and minimum variations of price. To be precise, he sometimes tells truth and sometimes arrogantly lies. Due to the reasons, explained above: the banks syndicate move currency the direction, which is good for them, but not where traders open their deals, and this is how they form a scope, shown on the screen. This is why traders loose when they follow the Bill Williams’s MFI indicator.