Wow nice there! Congrats to you master
Are they giving the gift specifically to clients that traded quite big volume?
Are they giving the gift specifically to clients that traded quite big volume?
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DislikedWow nice there! Congrats to you master Are they giving the gift specifically to clients that traded quite big volume?Ignored
"This may be a time bomb waiting to explode" - I wrote, one month before the crash.
I go into more detail in the article above, but the background was that the swiss national bank was trying to devalue it's currency to 0.833 Francs to 1 Euro or less (EURCHF 1.2 floor), because too much capital was flowing into the country and the swiss franc was appreciating more than they deemed necessary.
The ECB then made things difficult
However, the ECB soon launched its version of devaluation. They needed to make the Euro cheaper to prop up Europe's Ailing economy and combat low inflation. So the two central banks were directly competing against each other to print more money. One would have to give way.
When it did, it gave way in a very violent manner that left a lot of traders caught on the wrong side with negative balances, because their stops were not filled. Some brokers went bankrupt too, but the signs of turmoil were there a two months prior, when I wrote, "Many brokers have already reduced their leverage on this currency pair to a max of 50:1 because of their expectations of massive volatility"
I think this also highlights the importance of choosing brokers with segregated accounts because in the event of insolvency, your money is safe. - As is the case for Alpari UK
What is negative balance protection?
In short, B book means the your broker does not send your trades to the real market. He takes the other side of it. For example, if you buy EURUSD at 1.1, the broker will sell it to you at 1.1. Since 90% of Forex traders lose money, it is profitable for the broker to take the other side of the trade. The fundamental problem is that there is a conflict of interest.
So at the end of the day, the choice is yours. Personally, I would prefer a conflict of interest free trading environment. But I have traded with both types of brokers before, and as long as they don't mess with your trades (i.e. give you slippage, or delay execution of your trades), I am satisfied.
How to check positioning?
Putting it all together. What drives each individual currency?