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Forex changed forever!

  • #81
  • Jan 16, 2015 5:33pm Jan 16, 2015 5:33pm
Quoting ForexOracle
{quote} brokers that are ok are the Market Makers. A MM offsets trades internally. They only go to LP in rare cases when the majority of their clients pile on the right side of the market. When you are margin called the MM wins the account you lost. They made a killing yesterday!! FXCMs risk management failed. Thats a fact. But who could foresee a 4000 plus pip drop in less than 5 min?
In this case FXCM played by the rules and are making their clients whole. I will say again: the MAX an honest electronic broker can recover is the entire equity of a client account on a move of this magnitude. Exposed large positions on the books therefore lost all to ZERO. Their model does not allow debit trading in FX, except in certain (non-pool book) accounts. The amount they can recover on unhedged positions that match the exposure of their customers is subject to the market at large and I doubt any bank or non bank LP counterparty that they deal against was giving money away -- so NO DOUBT FXCM covered exposures at far worse levels than their customers. Is this a failure in their risk management model? Of course. Is this in any way shady, absolutely not. FXCM will find a benefactor, I am predicting, who will cover their missing market cap requirements (and heads will roll but this will be normal consolidation, and likely not due to malfeasance on a scale that will affect clients) and life will go on with the big dog.
  • #82
  • Jan 16, 2015 8:33pm Jan 16, 2015 8:33pm
Quoting behman8850
I lost $904 in this bloody SNB thing yesterday! fxcm will pay me back? I doubt it! I was sleeping in USA when this thing happened in Europe. My current A/C balance now is $452!!! What to do?
I am on my 4th beer of the evening, so my math skills may be somewhat impaired, but the implication of your post is that you risked 2/3 of your account on one trade. If that is right, the answer to your question is: learn risk management.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #83
  • Jan 16, 2015 9:15pm Jan 16, 2015 9:15pm
for all of those who yelling will be more regulation.. You wont see it in a republican based congress and in 5 months it will all be LONG LONG forgotten like it never even happened it will be far back in your charts and no one will even talk about it. Right now its a hot topic in a small group - excitement is flowing like hormones in a teenager. Next week its all about ECB and Then Greek and then who knows what else and CHF.. what CHF did something happen to them 2 weeks ago. I think they cut something I don't remember who cares moving on... A lot of people acting like a meteor hit and aliens were on-board. This is Forex.. If it wasn't this then its something else but one things for sure it has an awesome way of filtering out the weak hearted! be it brokers/traders/speculators or even spectators! One things for sure one year from now.. 5 years from now.. 10 years from now Retail forex is still going to be around something else will happen teenage hormones will bubble up and 2 weeks later everyone forgets it again. Pop the zits and lets talk Grexit because were getting so lazy that we cant even type 2 words and combining them into one word that I don't know if I'm evening pronouncing properly.
There are those who know, and there are those who don't know.
  • #84
  • Jan 16, 2015 9:57pm Jan 16, 2015 9:57pm
Quoting palabara
for all of those who yelling
Everything changes, Heraclitus. You can bring down a castle brick by brick...nobody notice until the last brick & it all comes crashing down. They've cut the clients' leverage, they've upped the brokers' capital requirements,...Congress? They don't give a shit about retail forex, have bigger fish to fry, need to vote to repeal ObamaCare for the 100th time. After every little calamity there are fewer U.S. brokers. If they can't rob their clients without posing systemic risk then maybe ,,, dare I say it? Anyway the handwriting's been on the wall for years, so I don't have to...

they started flying the homescreen Forex Factory name upside down...that can't be a good omen....
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #85
  • Jan 16, 2015 10:13pm Jan 16, 2015 10:13pm
Quoting The Fool
{quote} Everything changes, Heraclitus. You can bring down a castle brick by brick...nobody notice until the last brick & it all comes crashing down. They've cut the clients' leverage, they've upped the brokers' capital requirements,...Congress? They don't give a shit about retail forex, have bigger fish to fry, need to vote to repeal ObamaCare for the 100th time. After every little calamity there are fewer U.S. brokers. If they can't rob their clients without posing systemic risk then maybe ,,, dare I say it? Anyway the handwriting's been on the...
yes even I noticed that...I am not sure if this is some kind of prank or aa genuinly forex world turn down.
Don't speculate trade with surety.
  • #86
  • Jan 16, 2015 10:15pm Jan 16, 2015 10:15pm
Quoting behman8850
I lost $904 in this bloody SNB thing yesterday! fxcm will pay me back? I doubt it! I was sleeping in USA when this thing happened in Europe. My current A/C balance now is $452!!! What to do?
forget and move on
Don't speculate trade with surety.
  • #87
  • Jan 16, 2015 10:15pm Jan 16, 2015 10:15pm
Quoting EnoFX
As Buffett once said "it's only when the tide goes out that you get to see who's been swimming naked".
Don't speculate trade with surety.
  • #88
  • Jan 16, 2015 10:26pm Jan 16, 2015 10:26pm
Quoting The Fool
{quote} Everything changes, Heraclitus. You can bring down a castle brick by brick...nobody notice until the last brick & it all comes crashing down. They've cut the clients' leverage, they've upped the brokers' capital requirements,...Congress? They don't give a shit about retail forex, have bigger fish to fry, need to vote to repeal ObamaCare for the 100th time. After every little calamity there are fewer U.S. brokers. If they can't rob their clients without posing systemic risk then maybe ,,, dare I say it? Anyway the handwriting's been on the...

Don't forget immigration! and Social Security and groom their next pets for the white house run so they can say things like Global warming does not exist its a myth! The bottom line.. There will be a market in the U.S more then likely a crappier gateway compared to the rest of the world. With this incident those who survived.. Gain and Oanada learned their lessons and will scoop up those who abandoning ship in FXCM and powers will shift but further then that no one really cares. I mean I'm sorry to those who lost money but its the name of the game.. We play with Risk - We know the Risk and Stop Loss is not a fail safe switch - Margin Call is not the end of the road. Those who survived will live to fight another day and those who perished will say booboo forex sucks and this and that.. In the bigger scheme of things.. Retail Forex might be stripped thanks to NFA in The U.S but in other places its doing good without margins or capital requirements being nuts, and for those who feel that they have the "guarantee" of regulators when money goes bye bye unless you get a nice bail out package! You will be like Alpari! They played by the rules and still no rescue party for them.. they got pushed out of the U.S not being able to meet the capital requirements went into U.K where they were okay and didn't survive the hit.. but the wheel keeps spinning. Best protection is proper and full diversification. enough pillars in place to protect the trading structure.

That's my dribble.. one final note like a lot of people have said were seeing about all the "losses" yet some made a lot of money! equivalent to all that has been lost. When "liquidity" was popping up it was Profits being taken.. Which I'm sure most profit was taken at the biggest unloading zone. So not all is bad considering some players are probably having hooker Fenenza right now.
There are those who know, and there are those who don't know.
  • #89
  • Jan 16, 2015 11:55pm Jan 16, 2015 11:55pm
This happens ever so often, last time it happened was with the Yen if I remember correctly.
  • #90
  • Jan 17, 2015 12:26am Jan 17, 2015 12:26am
Quoting The Fool
{quote} Everything changes, Heraclitus. You can bring down a castle brick by brick...nobody notice until the last brick & it all comes crashing down. They've cut the clients' leverage, they've upped the brokers' capital requirements,...Congress? They don't give a shit about retail forex, have bigger fish to fry, need to vote to repeal ObamaCare for the 100th time. After every little calamity there are fewer U.S. brokers. If they can't rob their clients without posing systemic risk then maybe ,,, dare I say it? Anyway the handwriting's been on the...
Second this ...
  • #91
  • Jan 17, 2015 1:11am Jan 17, 2015 1:11am
Quoting The Fool
{quote} I am on my 4th beer of the evening, so my math skills may be somewhat impaired, but the implication of your post is that you risked 2/3 of your account on one trade. If that is right, the answer to your question is: learn risk management.
You obviously donīt get it Fool, if you were in a CHF trade last thursday you risked your account and more NO MATTER where you placed your stops.

In this case there is no risk management other than not trading any CB manipulated pairs at all. Problem is ALL currencies are currently manipulated by QE, peg or by other means. If the CB of Japan on Monday suddenly decides to stop QE straight away you might see something similar because everyone is in the same trade scrambling for the same currency which results instantly in a temporary shortage of Yen.
  • #92
  • Jan 17, 2015 1:17am Jan 17, 2015 1:17am
Quoting barkie
If the CB of Japan on Monday suddenly decides to stop QE straight away you will see something similar because of a shortage of Yen.
No, you wouldn't.
  • #93
  • Jan 17, 2015 1:30am Jan 17, 2015 1:30am
Quoting Tingus
{quote} No, you wouldn't.
Of course it is.

If you do not understand this you shouldnt trade.

Everybody wanted Swissie at the same time (speculators, stoploss orders).

I have experienced this several times the last 10 years that stop losses were honoured 50 pips or so later like when usdjpy went from 80 to 75 some years ago.

This is the same problem (liquidity)but this week was exceptional.

Conclusion is that you can never control your risk 100 percent (or you should buy options) and anybody who thinks he is save because he has a stoploss order is fooling themself like you tingus
  • #94
  • Jan 17, 2015 1:33am Jan 17, 2015 1:33am
Quoting barkie
{quote} You obviously donīt get it Fool, if you were in a CHF trade last thursday you risked your account and more NO MATTER where you placed your stops. In this case there is no risk management other than not trading any CB manipulated pairs at all. Problem is ALL currencies are currently manipulated by QE, peg or by other means. If the CB of Japan on Monday suddenly decides to stop QE straight away you might see something similar because everyone is in the same trade scrambling for the same currency which results instantly in a temporary shortage...
True but this was extreme I have never seen this in 10 yrs and I chatted with a veteran he also never saw this before.

But we are now in a bubbly environmnet with all this intervention.

So yes this could happen again because there is no solution for this if you dont want to trade options
  • #95
  • Jan 17, 2015 2:23am Jan 17, 2015 2:23am
Quoting Molby
{quote} Of course it is.
You say we would see the same type (EUR/CHF) flash crash on EUR/JPY or USD/JPY, if BOJ were to halt their QE, let's say in a year's time?

Somewhat I'm not buying it (no pun intended )

P.s. I've traded USD/JPY live during ''Sunday's Special 7 CBs intervention''. It was a very straight-forward trading, too bad didn't dare to use larger leverage
  • #96
  • Jan 17, 2015 2:53am Jan 17, 2015 2:53am
Quoting ForexOracle
Global Brokers NZ Ltd was the first causality reported by Bloomberg yesterday night. ALPARI UK according to CNBC is insolvent. FXCM shares dropped from 17$ to little over 1 dollar this morning. Their shares are currently not trading and it seems they need 230 million to keep going. Checking around forums I can see people withdrawing ( or trying to) money. Which looks like a "run on the broker" in process. It will be very interesting to see what kind of new regulations will emerge and how traders and brokers will adapt to it.
I think the opposite will happen. I have been predicting for years that as capitalism globalises post the Cold War, volatility would increase as well as it became even moire ruthless.

Incidentally I trade with pure accuracy and nothing has changed other than that the market is more subtle in its configurations.
The road to pipland is arduous and fraught with challenge.
  • #97
  • Jan 17, 2015 6:06am Jan 17, 2015 6:06am
Hi everyone
i'm new in forex and as much as i know that you can only loose your money then your account will reach to margin
so can someone explain to me please how broker bankrupt?
  • #98
  • Jan 17, 2015 6:12am Jan 17, 2015 6:12am
Quoting Molby
{quote} True but this was extreme I have never seen this in 10 yrs and I chatted with a veteran he also never saw this before. But we are now in a bubbly environmnet with all this intervention. So yes this could happen again because there is no solution for this if you dont want to trade options
next it will be china, stopping its peg moooohahahaha
Learn, a forex trader must, unlearn and relearn he will.
  • #99
  • Jan 17, 2015 6:53am Jan 17, 2015 6:53am
Quoting Tingus
{quote} You say we would see the same type (EUR/CHF) flash crash on EUR/JPY or USD/JPY, if BOJ were to halt their QE, let's say in a year's time? Somewhat I'm not buying it (no pun intended ) P.s. I've traded USD/JPY live during ''Sunday's Special 7 CBs intervention''. It was a very straight-forward trading, too bad didn't dare to use larger leverage
If the whole world is positioned against JPY because of Abenomics and BOJ policies like qe and Kuroda announce out of the blue "nah bad idea lets reverse it" without telling anyone upfront what would happen ?

Everybody wants to buy JPY in blink of an eye, where is all this JPY coming from in these few seconds ?

Your 7 CB intervention implies that these 7 CBs knew what what going to happen so they could take care of liquidity this was not the case here and can happen again.

CBs are always keen on communication, forward guidance to prevent shocks but Swissies are another species.

If there is a bubble and the bubble is burst deliberately when nobody sees it coming then this can happen again and then risk management is a ilusion.
  • #100
  • Jan 17, 2015 7:16am Jan 17, 2015 7:16am
stop loss matters as a regular contract. otherwise there will be no risk management possible and everything will loose sense. who will guarantee you tomorrow that you are protected at any time and at any position?stop loss must matters same as a trading order. regulators need to make all operators to respect and obey their clients stop loss orders or it will be a huge neglect on clients account. only with stop loss risk-management is possible by anyone. so at the end of the line if there is not a market maker that takes a stop-loss order operators down the lane may inform their counterparties that they are not able to accept SL orders and it is best advised that certain position is advised to be closed since it will not be protected against a huge loss.
3 days ago i've had a SL order at 1,1950 placed with FXCM almost 4 months ago. i expected they have placed a similar SL order at the other hand and protected me and themselves. if they did and the other counterparty does not respect their SL order someone is to be blamed. if they didnt FXCM is to be blamed and regulators who did not check this? but retail clients once and for all have no blame and their SL should be respected as placed. so retail clients are not to be blamed for this CB/Broker misshandle and negliegence.
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