Several people, including friends, and friends of friends have asked me “What I thought” about the Iraqi Dinar. ¬†They knew I traded currencies and wanted to know my view about whether it was a good investment or a good trade. ¬†I found it very amusing since I am an order flow trader and have mastery of the concepts of order flow, liquidity and volatility.
Within a few moments of thinking, I knew that it was a bad investment and bad trade. ¬†I knew that it was a scam. ¬†I didn’t even have to think for very long. ¬†Perhaps within half a breath I knew it was bullshit.
Also notice that in such situations, the person asking the question is almost NEVER thinking about going short. ¬†They always think about going long, aka buying that particular stock, currency, commodity that they are asking you about. ¬†The people asking me about the¬†Iraqi¬†dinar were not thinking about shorting it, they were thinking about going long. ¬†Because that is how many scams usually are. ¬†They want you to invest in something that will appreciate in value, or buy this stock so it will go up. ¬†Or go buy this penny stock that will explode, etc. ¬†They are never flexible enough to consider the short side. ¬†Human beings, especially people who like to peddle scams or ask about them usually only think about buying, about going long.
But that was not the primary reason I thought the Iraqi Dinar was a scam. ¬†Since I am an order flow trader, I know how to think about the markets to discover opportunities, scams, bullshit, etc. ¬†It is very simple really.
The moment they asked me what I thought about the Iraqi dinar, I immediately wondered who would provide the liquidity to place the trade? ¬†Who is going to be on the other side of your trade? ¬†Who is going to be your counterparty? ¬†I don’t know of many forex brokers that allow you to trade¬†Iraqi¬†dinar. ¬†In fact I don’t know of one. ¬†So that was a massive red flag.
Another problem is how much liquidity there is? ¬†It is possible that you may get the transaction done, but after that will there be liquidity to get out of your position? ¬†Usually in currencies such as those the spread is extremely large. ¬†Also where would you even get the deal done? ¬†Are you going to buy physical Iraqi dinars? And if so where are you going to get them from? ¬†So many red flags in the Iraqi Dinar Scam. ¬†If you just look at a chart of the Iraqi Dinar, you should quickly realize that you should not be investing in it, and you should not be trading it.
Does anyone else talk about the Iraqi Dinar? ¬†I don’t see Wall Street talking about it. ¬†I don’t see top hedge fund managers talking about the Iraqi Dinar. ¬†Because they all know it is bullshit. ¬†The only people talking about it are the people who are trying to get rich quick and falling for those pie in the sky riches. ¬†That is the only reason.
Therefore if you learn about order flow trading, about liquidity, about volatility, and think about who is going to take the other side of your transaction, it is easy to figure out these scams so you don’t fall for them.
For god sakes, it’s way too big of a headache thinking about such scams. ¬†The EUR/USD just made a 150 pip move today. ¬†Plenty of liquidity, plenty of order flow, great volatility, tight spreads, electronic trading. ¬†What more can you ask for? ¬†Focus on the liquid financial instruments, that have volatility and you know they are not scams.
I don’t lose any sleep at night having missed the “Iraqi Dinar” Scam.
Because I know that you can make a lot more money, untold riches trading the EUR/USD instead of the Iraqi Dinar.
I know to spend my time figuring out when the EUR/USD is going to make the next 200 pip move, because that is where the money is. ¬†That I feel completely confident about.
Why am I still writing this article now? ¬†I gotta go find the next big move…