Thursday, March 12, 2009

MarketGuru is Manipulated (sad but apparently true)

First, let me preface - I'm a trader. Not a journalist, not an investigative reporter, not a fantasy guru rockstar.

Long story short, since early February I've been emulating my trades as CentrifugalD at MarketGuru (MG). Monday last week I was up about 8% late in the session and I reduced a bunch of positions, taking some profits off the table. Even though my smallest gain on the day was up 6%, my MG gain for the day dropped to below 5% after the adjustments.

Then yesterday a good trader I am following was long FAZ all day (his only position) and several times during the day he was adding more FAZ. In the end his account was up, not down, about 5% (FAZ was significantly negative on the day). I began to realize that averaging-down appeared to cover-up previous losses.

So today I was nailed to the wall a bit, down 3% after a couple of hours as my longs comprised only about 40% and I had SDS and DXD and a small amount SKF for the rest (Translation: I was short in an up-market). I added to SKF and by the last hour I had as much SKF as I had DXD and SDS (this was legitimate/intended). I am down 5% at this point.

Part of me doesn't want the 5% loss (natural enough). Another part of me suspects that all I need to do now is make a well-timed jam with a lot more SKF and I am able to erase some or all of the 5% loss. And the largest part of me wants to know if this is possible, because if so, then wtf am I wasting my time for competing in a flawed system?

I jammed SKF. I went from 1,200 shares to 40,000 (a tad too early) and then to 80,000 shares. Low and behold, I finished the day negative 0.76% only.

Well, this totally sucks. Unless I am missing something (please comment and explain), then I can unload my SKF tomorrow and go back to the portfolio I was trading, sans yesterday's belly shot. And if SKF gaps down, I guess all a good MG trader needs to do is add a million shares and the previous loss becomes inconsequential once he can sell it up a point; ad infinitum.

Please, tell me I'm wrong. Otherwise I don't see myself wasting energy there. If we all started with the same size account, wouldn't that remove the ability to manipulate one's account? Isn't there enough scheming bullshit in the finance world already - now we have to phony the fantasy game as well?

Let me know if there is another platform to compete fairly. I hate fantasy baseball (obviously rigged). These MG traders are kicking Bernie Madoff's ass lately. Oh wait...

Sorry for the vent - I took belly shots today!

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